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New Build: Opportunities    

 

 

 

Government initiatives aimed at increasing the number of affordable homes across the country continue to provide opportunities for companies operating in the new build sector, despite the present downturn.

Affordable Homes Programme Delivering 80,000 new Affordable Homes

The Affordable Homes Programme (AHP) forms an integral part of the Government’s intention to deliver over 150,000 new affordable homes during the 2011-2015 period.

  • £1.8 Billion AHP Allocations will fund at least 80,000 new affordable homes, while £2.29 Billion will fund outstanding projects under the predecessor to the AHP, the 2008/09-2010/11 National Affordable Housing Programme.

  • A total of 146 organisations make up the successful bidders announced in July 2011.  These bidders consist of Housing Associations, Local Authorities (LAs)/ALMOs and Private Sector Partners.

  • Approximately 27% of the total new homes will be built in the London area.

  • Contracts between the HCA and successful bidders began to be signed in September 2011.

For further information on how Focal Research can help your organisation to target opportunities presented by the AHP, please contact us.

 

Potential for Increase in New Homes Under the LA Self-Financing System

 

The new LA Self-Financing System takes effect from 1st April 2012 and will see councils managing and maintaining housing stock with funds generated through rents.  Under the system, stock owning Local Authorities will take on a share of the Government's overall £25 billion housing debt, although no council will be allocated a share that is unsustainable in the long term.

  • Under the Self Financing System, LAs are able to use surplus rental income to support borrowing for housing spend.  A borrowing limit is set for each LA, at the level of debt they are allocated when the system begins.

  • Certain LAs will have less actual debt than has been allowed for them, giving borrowing headroom and allowing them to increase borrowing without reaching the Government's limit.

  • Those LAs that decide to utilise their borrowing headroom are likely to spend money on reaching the Decent Homes Standard first (if they still have stock failing to meet the Standard) then on building new homes.  The latest model used to calculate borrowing limits indicates that total borrowing headroom will be £2.65 billion shared between 136 LAs.