The Government will announce new plans to boost the house-building sector next month which will relax rules that require private housebuilders to include social housing in large projects.
According to the Financial Times, the measures have been put together by prime minister David Cameron’s head of policy Oliver Letwin, housing minister Grant Shapps and chief secretary to the Treasury Danny Alexander.
The FT says the measures are likely to see local authorities relax rules that typically force builders to ensure that 20 to 45 per cent of their homes qualify as affordable properties.
The Government will also underwrite bonds issued by housing associations to reduce the cost of borrowing and allow them to fill any gaps left by private companies.
The FT says the Government has rejected proposals put forward by many in the industry to bring back the mortgage interest relief at source scheme, which allowed borrowers to claim tax relief on interest payments on their mortgage. Former chancellor Gordon Brown abolished Miras in April 2000.