The Homes and Communities Agency (HCA) has launched a consultation around options for the recovery and recycling of grant funding that would make it an investor in affordable housing, sharing risk with providers but also benefitting when property values rise.

Such a move – allowable under new powers contained within the Housing and Regeneration Act and due to come into force from April next year – could see part of the Agency's National Affordable Housing Programme allocated to housing associations as an investment rather than grant, resulting in a future return direct to the Agency which would be re-invested in affordable housing where it is needed most. It would also align the rules governing housing associations with those applied to private developers and ALMOs.

-- Advertisement --

Sir Bob Kerslake, Chief Executive of the HCA, said: "We have been clear that in the future we will need to make our funding work harder, to do more with less, and this is one of the ways in which this could be achieved. Taking a return on our investment linked to an uplift in property values would maintain the value of taxpayers’ money in real terms and allow us to re-invest it in more affordable homes.

"We have absorbed upward pressure on grant rates to help meet our Partners’ needs during the downturn, and the current market conditions mean that the time is right for us to look again at the issue of recovery."

(CD/BMcC)