LOW COST HOUSING IN RURAL AREAS (Hansard, 7 February 1989)

The Minister of State, Department of the Environment (The Earl of Caithness)

We are announcing today new targets for low cost housing in rural areas and our proposals for enabling shared ownership dwellings in villages to be retained to meet low cost housing needs.

Last July the Government announced the rural housing initiative which set specific targets for low cost housing in smaller villages. The Housing Corporation established a special rural programme aimed at expanding the role of housing associations in villages with a population of under 1,000. The corporation agreed to earmark sufficient funds to permit some 300 approvals for rented housing in 1988–89 with a target of 450 approvals in 1989–90 and 600 in 1990–91. In December 1988 the Housing Corporation announced that the target of 600 approvals had been brought forward to 1989–90. We are pleased to announce today that the new targets for 1990–91 will be 900 approvals and for 1991–92 1.100 approvals. These targets effectively mean that the number of approvals given under the special rural 1550WA programme will have nearly quadrupled over a four year period.

There is concern that subsidised shared ownership houses in villages should be kept as low cost homes and not lost through people becoming lull owners and selling in the open market. In those rural areas where replacement of a shared ownership dwelling may be difficult, or where a private landowner has contributed a site on condition that it be retained for low cost housing, we have in mind giving housing associations a pre-emptive right to buy back the dwelling at full market value when an occupier moves on. We will of course need to establish a funding arrangement which ensures that the association has the funds to exercise their right to repurchase. The arrangement proposed will maintain the right of the tenant to become the full owner of his home, but will provide a means of retaining the dwelling for low cost housing when the occupier moves. It will provide a means therefore of sustaining the supply of low cost housing in the villages and will reassure those landowners who contribute sites for that purpose. The details of the scheme are being discussed with the Housing Corporation.

Taken together with the proposals announced last Friday by the Secretary of State to improve the supply of sites for low cost housing in rural areas, these measures will make a further significant contribution to augmenting the supply of low cost housing in villages.