Wednesday, 23 April 2014 03:34

Extra borrowing for affordable homes

Written by  Ruralcity Media
Extra borrowing for affordable homes

Councils can bid for a share of £300m in extra borrowing to build up to 10,000 affordable homes, says the government.

Local authorities can bid for a share of the money which is being made available through an increase in their housing revenue account borrowing cap.

The money must be invested in new affordable housing over two years from 2015.

Ministers also confirmed a change in rules about council land sales, so more surplus and redundant land and property can be released to build homes for local communities.

Councils applying for extra borrowing powers will need to demonstrate maximum value for money, by including funds from disposal of surplus assets, particularly high-value vacant stock.

They must also bring forward their own land for new affordable housing.

In return for taking more responsibility for housing in their area, the government said councils could now keep their rents and receipts from house or land sales.

Communities secretary Eric Pickles said the move would allow councils to ensure local people had the affordable homes they needed.

Councils would need to work closely with their Local Enterprise Partnership when preparing bids for extra borrowing powers, which would form part of the government's Local Growth Fund.

Mr Pickles said: "We have untied the hands of councils so they can take more responsibility for housing in their area.

"Councils have built more homes in the last three years than under the whole of the last government - 170,000 affordable homes have been delivered since 2010, and housebuilding is now at its highest level since 2007."

"But there is still more to do. Today we are offering extra borrowing powers so councils can build more homes."

Councils could now sell their vacant land at below market value to a broad range of organisations if it was then used to build affordable housing.

Local authorities should consider what land they can release for the benefit of their local community, said Mr Pickles.

The deadline for funding bids is 16 June 2014. A prospectus on how to bid can be downloaded here.

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