Commercial housebuilders threatened with loss of public funding unless they construct more mixed communities

Housebuilders have been threatened with the loss of of public funding for social housing unless they build better mixed tenure communities.

Writing in Building this week, Jon Rouse, chief executive of the Housing Corporation, which administers an annual £1.67bn budget for social housing, said that schemes were being built that created a “them and us mentality”.

He cited a scheme in St Albans, Hertfordshire, as an example of what was going wrong. Rouse said the separation of market housing, low-cost home ownership properties and social rented housing in this development was worrying.

He said: “This degree of separation is not something we will accept in future in terms of providing grant aid. While we will not insist in every case on full pepperpotting, we will at least want to see different blocks mixed up.”

Rouse, who is responsible for funding a programme of 67,000 homes every two years, added that he wanted the tenure of properties to be indistinguishable from the outside. He pointed to the starkly varying quality in public space and landscaping as obvious areas where “we will need to get tougher in terms of our grant conditions”.

The degree of separation is not something we will accept in future in terms of grant aid

Jon Rouse, Housing Corporation

Terry Fuller, chair of the affordable housing group at the Home Builders Federation, said that dotting blocks of flats of different tenures around schemes would push up costs. He said: “A problem will arise around build costs if firms have to do this as it will increase preliminary costs.”

Preliminary costs include site facilities for construction workers, such as kitchens, toilets and secure storage areas. Fuller said that it was standard practice to subcontract affordable housing and, when this occurs, the subcontractor requires its own separate facilities, adding to the overall cost. If the blocks of affordable housing were scattered around a site these preliminary costs would increase further.

The warning from the Housing Corporation may also be seen as foreshadowing the government’s decision to allow non-housing associations to bid for £3.3bn in public funds for social housing from next April. Rouse said that its tougher stance would take effect from the introduction of the corporation’s new development programme, which is scheduled to be launched next week.