Details of £420m housing scheme published

Developers will have until 30 January to bid for a share of the £420m of loans available under the government’s Get Britain Building fund unveiled at chancellor George Osborne’s autumn statement.

A prospectus published today says that as expected the scheme will see the Homes and Communities Agency either lend money or take equity stakes in schemes which are currently stalled because of a lack of availability of development funding.

Funding may be up to a value of 15% of the cost of the scheme, but will only be available to those projects that are ready to start or re-start

The scheme, which will is not targeted at those listed builders that have been able to re-finance through raising money on the stock market, is instead aimed at helping smaller and medium-sized builders to get schemes off the ground. However, only developments of more than 25 homes will be eligible.

Funding may be up to a value of 15% of the cost of the scheme, but will only be available to those projects that are ready to start or re-start and where this could create wider local benefits such as tackling environmental blight, or addressing specific housing or regeneration needs.

Starts on site under the scheme will be expected by June with approvals given in May. All homes funded under the scheme are expected to have completed by the end of 2014.

The prospectus, published by the HCA, comes as the government opened up a consultation on reforming the Right-to-Buy initiative. These reforms are designed to see more council homes sold to their residents in order to fund the construction of new “Affordable Rent” homes which cost more for residents to rent.

Housing minister Grant Shapps said the government will raise the level of subsidy for Right-to-Buy sales to £50,000. There will be range of options allowing councils to keep the sales receipts in order to invest in new homes directly, or see the sales receipts passed to the HCA to fund the wider affordable housing programme.

Shapps said: “When this government came to power our inheritance was a paralysed housing market and a devastating collapse in construction. The builders had stopped building, and millions of hard-working, aspiring home owners were blocked from taking their first step on the property ladder.

“That’s why I am today publishing proposals that will dramatically increase the discounts under Right-to-Buy, ensuring it once again becomes a meaningful tool to support social tenants who want to buy the home they live in.

HCA chief executive Pat Ritchie said Get Britain Building was an exciting new programme, which will boost the house building industry. “I’m sure this opportunity will be of interest to all developers, but we have made the process is as simple as possible to make it easy for smaller developers to bid.

“I am looking forward to receiving the expressions of interest from the industry and the HCA will be taking a robust commercial approach working with local authorities to invest in the right schemes that deliver the greatest benefits for local communities and the industry.”