Magazine article Public Finance

Home Grants System 'Could Push Up Costs'

Magazine article Public Finance

Home Grants System 'Could Push Up Costs'

Article excerpt

A new system of paying development grants to leading housing associations could reduce efficiency gains, landlords have warned.

Instead of making a first grant payment to registered social landlords as soon as they acquire land, the Housing Corporation is waiting until associations start to build homes before giving them 50%. The remaining half is paid on completion.

Under the old system, RSLs received 40% at acquisition, 40% when they started to build and the remaining 20% on completion.

Neil Griffiths, research leader at the National Housing Federation, said associations were waiting six to nine months before receiving any grant. 'If you are in an area where the planning system works well, your time delay is less,' he said.

The corporation, which is under pressure from ministers to build social housing more quickly, is encouraging RSLs to buy land in advance. …

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