Housing Minister John Healey and Rural Minister Dan Norris backed councils with cash and support to kickstart plans to build homes people can afford where they want to live, and develop rural areas to meet the needs of local people.

Councils with the best proposals for rural towns and villages will be given specialist advice to develop masterplans for new neighbourhoods of high quality housing that will include green spaces, commercial and business premises, shops and services. The new neighbourhoods will make the most of existing buildings, help provide homes for local people and help rural businesses who often find it difficult to recruit and keep staff priced out of rural communities.

A £1 million fund jointly provided by Communities and Local Government and Defra will provide expert assistance and training on design, and help councils work closely with local communities to develop masterplans, identifying best practice that will provide a model for rural authorities across the country.

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Mr Healey also announced a consultation on proposals to encourage rural landowners to release more land that will be used to build affordable housing for local people. Proposals include allowing local landowners to retain the freehold on the land, with housing associations paying an upfront or annual payment for the lease.

These announcements are the latest stage in the government's plans to help rural communities thrive by providing more affordable housing and greater freedom to develop strong local economies.

Mr Healey said: "A lack of affordable housing in the countryside can be a real problem for rural communities. That’s why we are determined to help young families find homes they can afford where they want to live, and help rural businesses recruit and retain local staff who will not be priced out of the countryside.

"Local authorities should use the powers they have to plan for new homes and in rural towns and villages. These proposals will give councils the flexibility and expertise they need to help provide affordable homes for local people that are built to a high standard."

(CD/KMcA)