Developers call for low-cost private homes subsidy

Developers have urged the government to use the proposed merger of the Housing Corporation and English Partnerships to widen its subsidy for affordable homes to include low-cost private housing.

The British Property Federation made the suggestion in its draft response to the government's review of its agencies, which is expected to lead to the merger of the corporation and EP.

The BPF called on the merged body to fund affordable housing for sale as well as social housing. Traditionally, the corporation has just funded rented social housing and shared ownership properties.

The BPF suggests making the bidding process for the social housing grant more developer-friendly. It criticises the recently announced corporation programme in which the private sector secured just 1.6% of funding.

The document says: "One possible option would be to link grant to the numbers of social or affordable properties delivered and make grant tenure-neutral."

It also calls for a level playing field between developers and registered social landlords because the latter are increasingly competing on commercial schemes.

The BPF says: "It is not within the culture of the Housing Corporation to deliver a mechanism that recognises private sector innovation and responds to its needs. We need a structure that can."

It is not in the corporation’s culture to recognise the private sector

British Property Federation

Oliver Morgans, BPF policy officer, said that although the integration of housing and regeneration in a single agency made sense, there were dangers that the organisation would have a less clear focus than EP.

David Orr, National Housing Federation director, hit back by saying that RSLs should remain the key agencies for delivering affordable accommodation.

Orr said: "We acknowledge that the agency will not just work with associations, but associations are key to its success as we have the track record of neighbourhood investment over the long term."

The review, despite fears it would be kicked into the long grass after this month's ministerial reshuffle, is expected to report this July.

Last week Ruth Kelly, communities and local government minister, said a revamp of the Decent Homes programme would be announced soon. She said there would also be a review the housing renewal pathfinder programme.