Social homes plan will help builders

Jan 10 2009 by William Green, The Journal

HOUSING chiefs in Newcastle are confident of finalising deals with developers to buy dozens of yet-to-be-built properties to cope with “unprecedented” demand for affordable social homes.

Up to 50 units could be purchased from struggling house builders within weeks to increase the number of available homes and ensure developments are completed in the wake of falling private sales. The news comes after the scheme to buy up unsold new homes has been held up by red tape and negotiations with developers, although concerns remain that over-stringent Whitehall regulations are hampering efforts to address demand with hundreds of people inquiring each time a property becomes available.

Bill Shepherd, Newcastle council’s executive member for regeneration and housing, said: “The initial deal we did we weren’t able to get a big enough discount to reflect the falling market. The company we were talking to were thinking we were going to buy at full market price.”

He said it was disappointing, adding: “We have asked them to go away and sharpen their pencils and we are prepared to do a deal with them on that basis, if they can give us a discount that provides real value for money for the taxpayer.”

But the Liberal Democrat confirmed discussions with three developers across the city were underway, which would allow affordable homes to be built, with the council working with Your Homes Newcastle – the authority’s housing arm – to drive the programme “forward in the very near future”.

YHN chief executive John Lee said it was also working with the city council on building 200 to 300 new homes over the next two to three years, while 33 bungalows for private sale and rent should go on the market next month.

But he added demand was “unprecedented” and YHN was looking at buying and leasing immediate properties to deal with it.

And Mr Lee expressed confidence that deals to buy up unsold new homes could be reached soon, saying: “Of three developers, we are still in detailed negotiation with two and I am broadly optimistic that they will bear fruit.

“I think two of the three will come to fruition but the third, I don’t think will because of the valuation of the accommodation,” said Mr Lee.

A deal could be reached with one of the developers within six to eight weeks and agreement with the other company within three months.

Mr Lee added YHN could request changes to the unbuilt houses to meet the higher quality and environmental standards required by the Government’s Homes and Community Agency (HCA), which provides grants.

But stringent regulations risked hampering efforts to deal with demand for social housing, warned Mr Lee, with up to 363 expressions of interest made when a three-bedroom house became available.

For previous stories on the issue, click the links below
Newcastle housing plan is held up by red tape
Council's homes deal to boost market