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Private sector must embrace social homes

Housing Corporation chief executive Steve Douglas has told residential contractors to view social housing as a way of making money, rather than an obligation, if they want to remain successful during the current market downturn.

Speaking to Construction News at last week’s Chartered Institute of Housing annual conference in Harrogate, Mr Douglas said that firms currently feel they are being forced to build social homes as part of Section 106 planning agreements on private developments.

He said: “Contractors have seen that Section 106 is an obligation but they should now see it as helping with their productivity. There are opportunities there for them to get business.

“The private sector needs to be working with housing associations and local authorities in a different way.”

But he added that a boom in social house building would require the public sector to improve its ability to secure sites.

Mr Douglas said: “At the moment it is not winning back the land we need.”

In a bid to help the sector, the National Housing Federation has asked the Government to free up £1 billion to buy properties that are part built or empty and intended for private buyers.

The proposal – called Protecting Households, Delivering Homes – is being considered by the housing minister Caroline Flint, the Treasury and the Department for Communities and Local Government.

The money has already been agreed as part of an £8.4 billion three-year funding package to deliver 155,000 new homes but it still needs to be allocated for spending.

Federation chief executive David Orr said: “A weakening housing market will increase the number of unsold or difficult to sell properties and sites available for purchase at prices lower than in recent years.

“This will create opportunities for housing associations and the affordable housing programme to continue to provide and, possibly, increase the supply of affordable homes. But only if the situation is managed effectively.”

Mr Orr said the property would be bought at below market rate but added that housing associations would then have to spend money on many of the properties in order to bring them up to the more exacting structural and environmental standards required for social housing.

He said: “We suggest associations should negotiate purchase prices which recognise the falling market and the additional costs they will have to bear in bringing properties up to standard.”

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