DCLG Announcement - £13 million to buy unsold homes for affordable housing

A £13 million deal to buy unsold homes off the market to use as affordable housing is being announced today, as part of the Government's programme of action to tackle current difficulties in the housing market.

The deal is the first to go through the Government's new National Clearing House, which enables house builders to put forward offers to sell their unsold stock for use as affordable housing, and receive early feedback on whether their properties are suitable for purchase.

The funding will mean that 335 affordable homes will be available, mainly for social rent, on sites across the country for families who would otherwise be on waiting lists following the agreement, between the Housing Corporation, Bloor Homes and housing provider Sanctuary Group.

Funding to purchase the homes comes from the Government's initial £200 million tranche to buy unsold stock off the open market, providing it is of good quality and offers value for money. More than 2,000 unsold homes have now been bought by the Government for use as affordable housing, with many more deals in the pipeline.

Housing Minister Margaret Beckett said:

"This deal will help deliver much needed affordable homes whilst also supporting house builders facing difficult times. It is part of a range of actions we are taking to help overcome the current challenges in the housing market, and we will continue to look at what more we can do."

Housing Corporation Director of Investment Richard Hill said:

"The Housing Corporation is very pleased with the successful outcome of this early National Clearing House bid, and the constructive working relationship which has been forged with both Bloor Homes and Sanctuary Group. It is exactly what we were looking for when we launched this process."

Sanctuary Group Chief Executive David Bennett said:

"In this climate of economic change, housing associations need to find creative ways to increase the provision of much-needed affordable housing.

"The innovative deal has allowed Sanctuary to provide more affordable rented housing and will benefit all the parties involved including, most importantly, those in need of new homes. We believe this type of arrangement will provide a balanced solution to the supply and demand for new housing."

Bloor Homes Group Head of Affordable Housing Ken Allen said:

"Bloor Homes is delighted with the relationship it has forged with the Housing Corporation and Sanctuary Group in progressing phase one. We have been most impressed with the speed of decision making and the approval process of all parties.

"This excellent working relationship and the ability of all involved to remain flexible in their approach, has been a key factor throughout. Facilitating the delivery of 335 affordable homes across 19 sites, located throughout the country, was certainly aided by the use of the National Clearing System, which gave us a central focal point to co-ordinate our discussions."

Notes

1. The National Clearing House process was launched by the Corporation as part of a set of initiatives to respond to the current market and to bring homes into the affordable housing sector. Since July, the Corporation has spent over £70 million to bring more than 2,000 homes into affordable housing.

2. The Housing Corporation is responsible for regulating housing associations, which provide some two million homes across England.

3. The Housing Corporation is the Government's national affordable homes agency, responsible for investing in new affordable homes and regulating nearly 2,000 housing associations across England. The Corporation's £8.4 billion investment programme for 2008-11 is its biggest ever. Its previous investment programme of £3.9 billion for 2006-08 funded 92,752 homes - 52,929 of these for affordable rent and 39,823 for affordable sale through the Government's HomeBuy initiatives, helping people to get a foot on the property ladder.

4. The Housing Corporation is working with English Partnerships and Communities and Local Government to establish two new bodies, the Homes and Communities Agency (HCA) and Tenant Services Authority (TSA) which are due to launch this December.

5. Established in 1969, Sanctuary Group is a successful leading-edge housing provider, managing over 70,000 homes throughout England and Scotland including general rented, sheltered and supported accommodation, student and key worker accommodation.

As a not-for-profit organisation, all income goes into maintaining high standards and updating and developing services.

Sanctuary is an Industrial and Provident Society, an exempt charity under the Charities Act 1993 and is regulated by the Housing Corporation.

6. The Bloor Group began building houses over 40 years ago and today is one of the largest privately owned house-building groups in the UK. Building nationally in excess of 2000 homes each year, the house building operation is managed through eight regional companies.