In a letter to council leaders outlining the coalition’s housing reforms over the next four years, housing minister Grant Shapps gave details of the new scheme as part of a £6.5 billion investment in housing by the Department for Communities and Local Government.
Of this, a total of £4.5 billion would fund new affordable homes, the letter says.
David Ireland, Chief Executive of charity Empty Homes, welcomed the move but said the reforms would present challenges. “Getting empty homes back is not easy but this is a unique opportunity for councils, housing associations and community groups to bring their skills together to create new homes out of empty property,” he said.
An extra £2 billion will be allocated to the Decent Homes programme, which aimed to bring all homes up to a decent standard by 2010.
A report published by the National Audit Office in January this year estimated that the targets would not be met until 2018.
The new capital funding would be “enough to more than halve the backlog over the spending review period and reform the Housing Revenue Account,” according to the housing minister.
Details of a New Homes Bonus Initiative that will see £900 million of funding provided to match council tax on all new homes over the next six years were also included in the letter. The scheme, designed to incentivise local authorities to support the development of new homes, is expected to start in 2011. A consultation will be launched in November this year.
Plans to enable local authorities to bid for money from the Regional Growth Fund for capital projects that could support housing growth and housing market renewal were also included in the letter, although no other details were given.
The housing minister also confirmed a new Affordable Rent scheme allowing housing associations to offer rental options on a case-by-case basis giving households support for fixed time-periods. More details on the scheme would be released shortly, he said.