Councils to get extra cash for allowing house building

Councils that allow new houses to be built will receive extra cash from government under a new scheme introduced to ease shortage of houses.

Under the new scheme, New Homes Bonus, the Government will match the amount raised in council tax on each new dwelling, for a period of six years. The money thus received by the councils could be used to slash council tax bills.

The money could also be used to build new amenities such as playgrounds, or to boost services such as rubbish collection. Under the scheme, if a council approves 100 average Band D homes, it will get £863,400.

Speaking on the initiative, Housing Minister Grant Shapps said, "We will not tell communities how or where to build. But the New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs.”

Grant Shapps added action is required encourage house building because previous government’s policies dragged house building to its lowest level since 1924.