Social housing: Welsh government's annual £4m for 30 years

The Welsh government has revealed plans to inject a further £4m a year into new social housing for the next three decades.

The government says it is part of a £400m package to build new homes.

Finance Minister Jane Hutt said the extra cash will help build 1,100 social housing homes in the next few years.

It comes soon after the Welsh government surprised some in the house building industry when it dropped a scheme to help homebuyers.

The government wants to build 7,500 homes by 2016.

"As a Welsh government, we are determined to use the tools currently at our disposal to support the housing sector in Wales by boosting the supply of affordable housing in tough times," said Ms Hutt.

"We are pulling the stops out to get the money into the system."

She said plans were being finalised for "a new innovative mechanism for financing social housing," making £140m available.

It has been working with Community Housing Cymru (CHC) on what has been termed a Welsh housing bond, which will allow cash to be raised to build the new 1,100 properties.

"I must stress how tough it is to meet these targets with the cuts we are getting from the UK government," said Mrs Hutt.

She said that even though the Welsh government had seen its capital spending budgets cut by 30% for next year, it still needed to build 1,000 or so new social housing properties a year.

'Imagination, commitment, innovation'

She added: "Year on year we are going to have to reach up to those kinds of targets and expectations - through imagination, through commitment, through innovation."

Last month the Welsh government announced it was dropping its NewBuy scheme which was designed to help people get high loan-to-value mortgages and would have supported the creation of 3,000 homes.

Ministers said the industry withdrew its support after similar plans were announced by the UK government.

But the decision surprised the managing director of Redrow South Wales, the largest house building company in Wales, and prompted criticism from political opponents.

The new investment plans announced by Ms Hutt on Friday were welcomed by CHC, which represents housing associations and social housing groups in Wales.

CHC chief executive Nick Bennett said: "We are delighted that the government has taken on the challenge of how do we deal with the fact that there are going to be cuts, particularly to capital.

"This is an innovative scheme that takes revenue and turns it into capital - water into wine, if you like - so it is a really important initiative."

He said that it was a boost for the economy as well as for housing need.

Mr Bennett said the target of building 7,500 affordable was "realistic".

"We've produced 4,000 (affordable homes) over the past two years so I'm confident (but) we need to be more ambitious for the future to meet need.

"We're very worried about the effect of welfare reform and the impact on housing benefit could have on the sustainability of housing associations and the amount we can do to meet that need"

Mr Bennett added: "I'm glad we're looking at as many innovative ways as possible, that's the challenge we've been set.

"Jane Hutt expects us to turn over every stone of innovation to meet housing need and I'm proud to say the housing associations in Wales are doing that work."