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Bedroom tax builds: HAs must develop smaller homes to win grant share

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Bedroom tax builds: HAs must develop smaller homes to win grant share

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Published by Max Salsbury for 24dash.com in Central Government and also in Development, Finance, Housing

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Housing associations are being advised to deliver one and two-bed homes if they want to win a share of the latest affordable housing grant.

The government has said that HAs "will have to focus on delivering new homes that are in short supply in their local area" so that "smaller households can move to more suitably-sized accommodation".

The advent of the controversial bedroom tax has seen a stampede of social housing tenants deemed to be under-occupying their homes looking to downsize to smaller properties. However, many areas have no smaller homes for those hit by the tax to move to.

And social landlords are also being told to consider whether properties they own in the most expensive parts of towns and cities should be re-let or sold off when tenancies come to an end.

From today, HAs, councils, and housebuilders will be invited to bid for funding that, the government claims, will deliver a £23 billion programme between 2015 and 2018 when combined with private investment.

Announcing the fund, Housing Minister Kris Hopkins said: "Housebuilding is an essential part of this government’s long-term economic plan. That’s why we have designed an ambitious new scheme to build affordable homes at the fastest rate for 20 years.

"Our programme will support 165,000 jobs in construction, sustain thousands of small businesses and provide homes where future generations can live and raise families of their own."

The government says that the following cost contributions should be fully utilised, where available, to contribute to the delivery of new supply, and to reduce the call on capital grant funding:

• Borrowing capacity generated by the net rental income stream of the new properties developed.
• The additional borrowing capacity that can be generated from the conversion of social rent properties to affordable rent or other tenures at re-let.
• Cash generated through the sale of existing stock.
• Other sources of cross subsidy, including surpluses from existing stock and activities, recycled capital grant funding and disposal proceeds funding and income from developing new properties for outright sale.
• Other sources of funding or means of reducing the costs such as free or discounted public land, including local authority land, and local authority contributions such as from the New Homes Bonus.

Bidders will be required to set out the contributions they can make to support their proposals to deliver new supply.

The contribution that a provider is able to make from its own resources and from the borrowing supported from new properties, conversions and existing social rent homes will be greater for those providers that operate efficiently, across both their management and maintenance operations.

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