NW to get £135m government housing support

THE government has announced that 270 stalled development projects across the country – including 54 across the North West – have been shortlisted for a share of £925m to get building work on 22,400 homes back on track.

The cash injection, which is expected to create around 20,000 construction jobs, is part of the Housing Pledge announced by Gordon Brown last month.

The funding will be used to make projects that have been mothballed viable and is only being provided where developers cannot get support from other sources.

In the North West, 54 projects have been shortlisted by the Homes and Communities Agency to receive a total government investment of £135m, to create around 3,750 homes.

One scheme – an 82-home development in Macclesfield – has been shortlisted because of its mix of sale and low-cost home-ownership homes, and the scheme plans to achieve Code for Sustainable Homes level six.

However, the support comes on tough terms. The government expects almost half the money to be repaid within five years, more than one third of which will go to housing associations to manage affordable housing , with just 18%  going directly to developers in support grants.

All the projects will now go through a final assessment to determine which get the green light – a key factor will be whether construction on the development will be able to start this year.

Housing minister John Healey said: “This is not a handout to developers. There are tough terms to this deal including repayment of loans within five years. And only builders who accept a realistic current market price for their land are eligible.

“I want to see builders back on these sites within weeks. So I will be calling on successful developers to pull out all the stops so construction can restart as quickly as possible.”

Sir Bob Kerslake, chief executive of the Homes and Communities Agency, said: “The response to our bidding process shows the level of appetite and capacity for development which is out there in the house building sector.  Despite the economic downturn, demand for new homes remains and with some help, quality schemes can be unlocked, adding to new supply very quickly.”

But Ian Thomlinson, director of residential and development at Jones Lang LaSalle Manchester’s office, said the initiative alone will not be enought to fully stimulate the industry in the North West.

He said: “The government needs to work with the banking sector to deliver further products to the mortgage market for those with lower levels of equity or minimal deposits to ensure a more sustainable recovery.”