A new Government plan has been launched that will give councils extra cash for each new property built in their area as an incentive to encourage the construction of more homes. It’s being called the New Homes Bonus scheme and will mean that local authorities will receive a lump sum per property equivalent to the council tax raised on each new house for six years.

The scheme has been introduced because of the lack of quick house sale opportunities and due to the low new-build numbers currently being seen. Even at this early stage it does have critics, one such being John Healey, shadow housing minister, who said: “This policy could mean cuts in services in other areas of the country, we could quite literally see government robbing Peterborough to pay Poole.”

In reply the Housig Minister, Grant Shapps said: “Communities that go for growth would reap financial rewards” and the rewards are likely to be substantial, possibly several hundred million pounds.

After the PM’s controversial suggestions on council house reform at his Q&A session in Brighton and Hove, Lincoln City Council has come out and warned it could have an impact on local council services. Under the possible reform, new council tenants would sign 5 to 10 year contracts instead of having the property for life, after the contract period they would be forced to move from their homes.

John Bibby, director of housing at the City of Lincoln Council, said:”We understand this suggestion was put forward by the Prime Minister in response to a question from a member of the public, with the intention of opening up a debate on the priorities for affordable housing.”

“At this stage, it’s just a debate. Until we get a detailed consultation paper, it’s difficult to assess the implications.”

The reasoning behind the idea is that over 5 to 10 years a tenant’s situation can change and they may want to look for someone who’s trying to sell a house on the open market and move into their own property. Plus, by putting contracts in place more needy people can get a roof over their head while those that have settled in a council property are more able to but/rent in the private sector.