Tensions over paying social housing grant to developers have heightened after housebuilders claimed to be able to undercut registered social landlords by "at least 15%".
Terry Fuller, chair of the House Builders Federation affordable housing group, told the London Housing Federation development conference on Tuesday that, compared with RSLs, developers would be able to save up to 15% through economies of scale.

But a leading RSL hit back at the claims, saying the only way this could be done would be to produce worse-quality homes.

Mike Kirk, London development director at Hyde Housing Association, said: "I would seriously question whether or not we would be comparing like with like. Associations have to produce higher-quality homes in terms of eco and space standards."

Previously the corporation only gave development grant to housing associations. But now it intends to start funding mainstream housebuilders to develop social housing and four construction firms have so far expressed an interest: Taylor Woodrow, St George, Bellway and David Wilson Homes.

I would seriously question if we are comparing like with like. Associations have to produce higher-quality homes

Mike Kirk, Hyde Housing

Bovis Homes is also understood to be considering bidding for any money offered to developers in the Housing Corporation's 2005/6 bidding round – the earliest point available after the proposal's inclusion in the Housing Bill, included in Wednesday's Queen's Speech.

Kirk said the best response to the issue would be for RSLs to press the government to make it easier for them to build homes for sale. At present, if an RSL wants to do this it must set up a non-charitable subsidiary, adding significantly to its overheads.

Source

Housing Today