Ministers plot multibillion-pound social housing initiative

The government is looking at a multibillion-pound plan that would boost the number of affordable homes built by luring investors into taking an equity share in social housing projects.

The Guardian reported that ministers hope to create a huge cash pool that would see up to £6 of private capital invested by institutions like insurance and pension funds for every £1 of government cash.

A decision on the idea is likely to come next month but if the plan went ahead, it would be likely to be administered by the Homes and Communities Agency.

The plan comes as several housing associations suffer serious financial problems, brought on by their inability to borrow cash from the banks.

Meanwhile the private housebuilding sector has also suffered a dramatic decline. Ministers fear that the number of homes built this year could fall to just 80,000 - the lowest peacetime figure since 1924 - if something is not done to boost the construction of new homes.