Monday, 27 July 2009

Healey kickstarts work on 22,400 homes

Housing Minister John Healey today announced that 270 stalled development projects across the country have been shortlisted for a share of £925m which could help get building work on 22,400 homes back on track and create 20,000 jobs.

Every region has shortlisted projects and will benefit from this major cash injection, part of the Prime Minister’s Housing Pledge announced last month, that will help build the homes the country needs, help the country through the recession and help people into jobs. The projects have been identified by the Homes and Communities Agency through the Kickstart programme.

Mr Healey made clear that this support comes on tough terms. The Government expects almost half the money to be repaid within five years, over one third will go to housing associations and others to help them manage the affordable housing and less than one fifth (18%) consists of direct grant to support developers. Only developers who have accepted a realistic current market price for their land are eligible for Government investment.

All the projects will now go through a rigorous final assessment to determine which get the green light. Key to this will be their ability to start construction this year. But Mr Healey said he wanted to see the first builders back on site in a matter of weeks and will call on successful developers to pull out all the stops so construction can restart as quickly as possible.

Over 8,600 of these homes would be for affordable rent or sale, with two thirds built to a standard well above that required by building regulations helping to cut CO2 emissions and reduce energy bills for the families that live in them.

The Kickstart programme is a key part of the Government’s investment to help combat the recession. It is designed to unlock housebuilding sites currently unable to proceed and support construction of high quality mixed tenure housing developments. Kickstart was announced in this year’s Budget and then expanded last month as part of the Prime Minister’s Housing Pledge as a centrepiece of Building Britain’s Future.

This funding will be used to make projects that have been mothballed in the current economic climate viable and is only being provided where developers cannot get support from other sources. It will boost development funding available, reduce levels of risk associated with projects and help support demand from homebuyers through measures such as Homebuy Direct.

John Healey said:

"We’ve pledged to use the power of Government investment to help Britain through the recession. This billion pound Kickstart programme will get stalled building work back on track, create jobs and help build the quality homes we need.

"Today I’m announcing that 270 housing projects across the country are shortlisted line for a share of £925m. This could kickstart work on up to 22,400 homes and create 20,000 jobs on housebuilding sites that have been mothballed in the recession. Around 8,600 of these homes would be for low cost rent or low cost ownership and two thirds will be built to some of the toughest ever standards helping to reduce CO2 emissions.

"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."

Shortlisted projects include:

  • Stanion, an urban extension to Corby, which in the long term is planned to deliver 1,200 homes. Infrastructure is in place but housing development has stalled. There are three shortlisted bids from developers seeking to start development in this area – two of which are at Code Level 3 and two Building for Life Silver.
  • An 82-home scheme in the Growth Point in Macclesfield, a high priority under the regional spatial strategy, has bid for funding to deliver a mixture of sale and low cost home ownership homes. The scheme is seeking to achieve Code for Sustainable homes Level 6.
  • Crayford Town Hall in Bexley, a site which is no longer required by the local authority and is suitable for housing development. This could deliver up to 145 homes, in a mixture of sale, affordable rent and low cost home ownership. This is expected to achieve Code for Sustainable Homes Level 3 and Building for Life Silver.
  • Alnwick in Northumberland, where the town centre scheme could bring forward up to 93 homes, a mixture of sale, social and intermediate rent – at Code Level 3 – that will also help to deliver town centre regeneration.
  • A scheme in north Bristol (in the Growth Point) which could deliver up to 149 homes (a mixture of sale, social rent and low cost home ownership). It will provide considerable benefits to neighbouring communities in Patchway through investment in local community facilities, which includes a new district centre and primary school. The scheme is expected to be Building for Life Silver and Ecohomes Very Good.

All of these will be subject to due diligence to further test their deliverability, risk and financial position.


Number of Projects

Amount of Investment


Number of homes (gross)

East of England



Up to 1,675

East Midlands



Up to 2,880




Up to 2,981

North East



Up to 1,721

North West



Up to 3,764

South East



Up to 2,326

South West



Up to 2,121

West Midlands



Up to 2,842

Yorkshire / Humber



Up to 2,088




Up to 22,398

Mr Healey today also signalled a second wave of Kickstart funding, with a bidding round to start in September, and said that he is ready to back other projects to build thousands of further homes that otherwise would not be completed. Successful second wave projects will be announced later this year.


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