Details revealed of agency’s social home building grant splurge
How the HCA spent £2.8bn in four months
The Homes and Communities Agency dished out £2.8 billion of grant in its first four months, in a bid to revive social home building.
Figures released exclusively to Inside Housing show Catalyst Housing Group was the biggest winner in the spending splurge, netting a whopping £154.5 million.
Private developers were awarded £75.6 million, of which £31.9 million went to Berkeley Homes to deliver 233 social homes.
The £2.8 billion was allocated between the HCA’s launch on 1 December 2008 and 31 March this year. It is expected to fund 28,736 social homes and 12,210 low-cost ownership homes.
London housing associations were the major winners in the spending spree.
Of the 10 largest grant allocations made by the quango in its first four months, nine were to associations based in the capital.
Between them, the top 10 winners secured £1 billion from the new agency, to fund 11,578 affordable homes.
Catalyst netted the highest payout, of £154.5 million, and L&Q Group bagged £153.3 million. They were followed by Metropolitan, Genesis subsidiary PCHA, and Family Mosaic.
The £2.8 billion will be used both to fund new developments and to recapitalise housing associations suffering in the housing market crash.
When the HCA launched on 1 December 2008, it instituted a programme of ‘tailored conversations’ with associations, to keep them building through the recession.
It offered higher grant rates, and extra funding to convert thousands of unsold shared ownership homes to rental properties, in exchange for commitments to new developments.
HCA chief executive Sir Bob Kerslake said: ‘My personal view is that [this strategy] has been a very strong success. For us in terms of keeping activity going, but also for the housing associations in helping them recapitalise, in what has been a very difficult period, and to reduce their exposure to sales.’
The agency is unable to say how much of the cash will be used to bail out schemes stalled by the market crash, or to convert or subsidise unsold shared ownership homes.
But in an Inside Housing survey of the top 25 developing associations, 14 landlords reported securing an approximate total of £183.1 million to convert unsold units or schemes in the pipeline, or reduce the rent charged on shared ownership units.
Dale Meredith, development director at Southern Housing Group, said its allocations from the agency were split ‘roughly 50-50’ between funding for tenure conversions and new schemes. ‘We think the HCA has been very helpful, and realistic,’ he said. ‘It has helped significantly to enable people to overcome some of these difficulties, but also to do what they wanted to do: commit to additional schemes.’
HCA figures released exclusively to Inside Housing this week also show the benefit reaped by private developers from the social housing spending drive. Twelve private firms have received new grants from the agency, with major house builders Berkeley and Persimmon taking in the biggest allocations.
The 2012 Olympic Games will also benefit from HCA cash. Triathlon Homes, a joint-venture between East Thames, Southern Housing Group and First Base, received £49.7 million to deliver 345 rental homes and 251 low cost home ownership homes.
See the full list of allocations
Fifteen biggest HCA allocations
| HOUSING ASSOCIATION | TOTAL GRANT | RENT UNITS | LOW COST OWNERSHIP UNITS |
|---|---|---|---|
| Catalyst | £154.5m | 995 | 726 |
| London & Quadrant | £153.3m | 960 | 457 |
| Metropolitan | £125.7m | 839 | 420 |
| Paddington Churches | £122.7m | 763 | 679 |
| Family Mosaic | £100.7m | 676 | 208 |
| Circle Anglia | £97.3m | 883 | 546 |
| Sentinel | £85.9m | 915 | 370 |
| One Housing | £77.5m | 492 | 286 |
| Islington & Shoreditch | £75m | 565 | 102 |
| Affinity Sutton | £68.6m | 611 | 85 |
| Bedfordshire Pilgrims | £65.9m | 781 | 716 |
| Notting Hill | £64.9m | 342 | 288 |
| Bromford Carinthia | £61.2m | 676 | 250 |
| Spectrum | £59.8m | 762 | 166 |
| TOTAL | £1.3bn | 10,260 | 5,299 |
HCA allocations to private developers
| ORGANISATION | TOTAL GRANT | RENT UNITS | LOW COST OWNERSHIP UNITS |
|---|---|---|---|
| Berkeley Homes | £31.9m | 233 | 0 |
| Persimmon Homes | £8.5m | 164 | 43 |
| Telford Homes | £8m | 54 | 0 |
| Countryside Properties (Northern) | £5m | 90 | 0 |
| Urban Splash | £3.8m | 0 | 108 |
| Bloor Holding | £3.7m | 51 | 0 |
| Galliford Try | £3.6m | 59 | 17 |
| Bellway | £2.7m | 30 | 35 |
| Larkfleet Homes | £2.7m | 41 | 4 |
| Barratt Developments | £2.4m | 38 | 13 |
| Bovis Homes | £2.4m | 36 | 0 |
| Westleigh Developments | £1m | 12 | 0 |
| TOTAL | £75.7m | 808 | 220 |
The big winners
The Olympics
£49.7m
Amount allocated to Triathlon Homes for 345 rented and 251 low cost home ownership homes
The private developer
£31.9m
Amount allocated to Berkeley Homes get for 233 rented homes
London
9/10
Nine of the top 10 recipients of the largest allocations are based in the capital
Plus Dane Group
£29m
The largest allocation to a group operating solely in northern England
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Readers' comments (4)
Midlands RSL | 22/05/2009 3:41 pm
I was astonished that the HCA spent £2.8bn in 4 months and even more aghast that they are unable to say how much of that was for bailing out the sector. Without the facts it is hard to escape the conclusion that much of it was used for sector rescue purposes.
Many developing Associations faced problems but did not go cap in hand to the HCA to be bailed out. We sorted out the issue ourselves and many developing Associations are not in the list published by Inside Housing.
It is a travesty that we, and others, now have schemes with the HCA which they cannot fund because the money has run out. As with the bail out of the Banks, the sums spent necessarily to avoid market collapse means that public money is now scarce to meet real needs and stimulate the economy.
Whilst the HCA probably had to do what they did the impact for all of us and especially for those who need homes, is pretty grim.
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Plain Speak | 27/05/2009 8:34 am
Is this a bail out of LCHO units? If so, it is a disgrace that HA's were allowed to run up such high numbers. It is high time that accountability returned to the fore and competencies be reviewed. The "free" bail out of banks and their executives at the tax payers expense has not helped in this regard; we must endeavour to stop the disease spreading.
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MJGreen | 29/05/2009 4:50 pm
The funding allocations seem to be a self perpetuating advertisement for this quango , that is The home and communities agency. Now that developers such as Berkeley homes have been bailed out, they would only help themselves and their own croony architects. What about the rest of us who would have liked to be party to this give away, and are desolate with no immediate future. On the one hand the government has printed money to give away for building of social housing and then in my constituency the local goverment Camden is selling off their social housing stock. How could such contradictory governmental acts work?
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Lulu | 06/11/2009 2:56 pm
Moving on from that story of all too familiar excessive spending, it is a travesty that RSL's who have developed schemes which require grant to make them financially viable are now being told that they won't get it. I and my colleagues have consulted extensively with our bid partner and HCA colleagues to secure grant at agreed rates which has subsequently been denied once the scheme is near completion - one of the reasons given is that other schemes represent 'better value for money'. Our organisation's financial parameters have tightened in the current climate making it hard to afford any new schemes at all. The loss of expected HCA grant is all the more devastating given that much of the housing we build is supported living accomodation which typically entails higher build costs.
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