Ministers should consider setting up a pathfinder project to encourage live-work schemes, according to a report commissioned by the Housing Corporation.
The government should also look at tax breaks, dedicated planning guidance and opportunities in growth areas for live-work properties, consultant Tim Dwelly said.

His report praised live-work units for cutting down on fuel use and encouraging diverse communities.

It said housing associations were ideally placed to lead the initiative because, unlike developers, they maintained involvement with an area and could encourage or guarantee, through tenancy or lease agreements, that the units were used for work.

But it warned: "[Associations] will only be able to protect and enhance their reputation as live-work providers if the funding and regulatory framework governing their activities recognises and supports them to do so."

Adrian Moran, policy manager at the Housing Corporation, said: "This is an opportunity for housing associations to become lead players in the new live-work sector."