Councils keep tight grip on potential build plots

Local authorities are holding back land for housing development in the hope they will be able to start building on it themselves.

The trend has emerged in the runup to the national affordable housing competition where, for the first time, councils will be able to bid for government funds to build new homes.

Dale Meredith, development director at Southern Housing Group, said there were indications that sites that would have been offered to housing associations were being held back for councils' own housing projects.

'There are sites which would normally have gone to housing associations to bid through the current round that aren't now,' he said. If local authorities or their arm'slength management organisations were not ready to build again the sites would effectively be held back, he added.

Paul Hackett, director of development at Moat, said local authorities were also reviewing how much land housing associations would receive as part of stock transfer deals.

'If you are a local authority and there are other ways [to build homes] than through a housing association, they may well choose to look at their options. They see there are more things on the table and they just want to make sure they have considered all of the options.'

Gwyneth Taylor, policy officer at the National Federation of ALMOs, said it made 'an awful lot of sense' for ALMOs and local authorities to use their own land for house building projects, as owning the homes allowed them to control who lived in them. Currently they have to negotiate nomination agreements with housing associations, she added. 'If you have got a lot of homelessness and if the housing association is building, the local authority has to negotiate nominations with the registered social landlord.'

A big role would remain for housing associations because of their ability to access cash on the private market, Ms Taylor said. This option is not available to local authorities or ALMOs.

The government expects councils to increase their house building rates from just 300 between them to several thousand a year, according to papers released alongside the Housing and Regeneration Bill.

The impact assessment paper states that freeing councils from the shackles of the complex housing revenue account financing regime could also increase investment in housing by billions of pounds.

Six local authorities and ALMOs which have examined the implications of coming out of the HRA system would raise £1 billion of extra housing cash alone over 30 years.