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Homes and Communities - announces shortlist for Round 2 Kickstart

The Homes and Communities Agency (HCA) has shortlisted 265 bids totalling nearly £550 million in Round 2 of its Kickstart housing delivery programme. Shortlisted bidders include a mix of Registered Social Landlords (RSLs) along with national and local developers, aiming to unlock up to 22,000 homes across the country.

Bidding opened on 14 September 2009 with the criteria that eligible schemes should be housing-led with a minimum of 50 homes (fewer in rural areas of if the scheme delivers to Code for Sustainable Homes Level 5 or 6) and that sites should have detailed planning consent in place or the ability to achieve this by the end of March 2010.

In contrast to Round 1 shortlisted bids, the profile of spend for Round 2 shows a shift towards HomeBuy Direct (HBD) which, according to the HCA, reflects an improved liquidity position for the major house builders but a continuing need to support first time buyers who face constraints on accessing mortgages. A number of key regeneration sites have also been shortlisted where a more intensive intervention of HCA equity / gap / loan and support for affordable housing is needed.

Sir Bob Kerslake, Chief executive of the HCA, said: “Kickstart continues to be a crucial component in maintaining momentum in the house building industry. In this round we have seen a marked increase in requests for HBD funding and this indicates how the appetite for HBD has accelerated as an attractive option for first time buyers, which in turn is fuelling demand for homes. This shift in the bidding profile has enabled us to increase the target for HBD by a further 3,000 units next year, as set out in the PBR last week.”

A due diligence process will now follow, which will look in detail at value for money, design, financial viability and risk, as well as an assessment of quick delivery. To assist Round 2 bidders in the due diligence process, the HCA has published new guidance on its website.

In addition a short report on the findings from Round 1, acting as a further signpost to bidders on how the process will vary in Round 2, has been published on the HCA website.

Bob Kerslake added: “Kickstart was a brand new programme for both the HCA and the industry, with a steep learning curve. So we are sharing the lessons from Round 1 and this should ensure that Round 2 will be a more streamlined process. The findings report will provide a useful steer to new and existing bidders on what we are looking for and how they can make their schemes successful.”

The Round 2 shortlist of schemes does contain a degree of ‘over programming’ to take into account that some schemes may not comply with the due diligence process and others may ‘drop out’ or withdraw, for example through market improvement. A reserve list has also been created by the HCA.

For further information: Anne Kerin, HCA press office on 020 7881 1653 or email anne.kerin@hca.gsx.gov.uk.

Notes to editors:

Kickstart Programme: The £1.06bn Kickstart programme received £400 million in the April 2009 Budget and a further £660 million through the Prime Minister’s Building Britian’s Future announcement at the end of June. The Programme is targeted to unlock 22,000 homes: a mix of social rent, low cost home ownership and market sale.

Round 1: On 26 November the HCA confirmed that £359.9 million had been awarded to 136 schemes nationally in Round 1 of the programme, unlocking a total of 10,281 new homes.

Regional breakdown of Round 2 bidders

Region

Number of Projects

Amount of Investment (£'000s)

Number of homes (gross)

East of England

42 

£72,982

3487

East Midlands

36

£61,261

1988

London

21

£93,794

3433

North East

14

£27,642

839

North West

51

£72,117

3232

South East

28

£83,269

3637

South West

21

£62,606

2427

West Midlands

29

£45,743

1951

Yorkshire and the Humber

23

£30,160

1488

Total

265

£549,574.00

22482

Round 2: shortlist breakdown of bids by tenure

Market sale/rent 10,839
HomeBuy Direct 5,707
Social rent 4,322
LCHO 1,614

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