Government ministers are actively considering a radical shake-up of the island’s social housing policy.

The Council of Ministers is looking at creating a housing association, which it believes will providing a better deal for tenants, first-time buyers and the public purse.

Owned by government but operating at arm’s length on a more commercial basis, the housing association would have the freedom to invest in quality low-cost housing.

The not-for-profit organisation would re-invest the income it makes into keeping its housing stock well-maintained.

The new model for social housing would also reduce the need for public subsidy.

Borrowing against its assets would allow the association to invest in the construction of new homes for rent and for purchase by first-time buyers, helping them get on the property ladder.

Infrastructure Minister Chris Thomas has been tasked with drawing up a policy options document to be presented to CoMin by autumn.

While in Jersey to attend the British-Irish Council summit, Chief Minister Alfred Cannan MHK met with representatives from one the Channel island’s housing associations, Andium Homes, to learn more about their operations and business model.

Mr Cannan said the model adopted by Jersey is potentially a way forward.

He said: ‘The creation of a housing association, were it to happen, would potentially allow for a complete change in approach for the management of social housing but also allow greater flexibility for investment into other types of housing.

‘In the UK housing associations are now commonplace and although they run as commercial organisations, they re-invest their profits back into housing provision.’

There are some 6,500 public sector homes in the island, mostly managed by local authorities.

But some 1,200 are government-managed, in areas where there are no housing authorities.

These include the Janet’s Corner estate in Castletown, the Bretney at Jurby and Strang Close and Cronk Grianagh in Braddan.

These 1,200 homes would be transferred to the new housing association were it to happen.

But the proposals are likely to come under fire from the local authorities which could see it as a wider threat to the traditional model of social housing provision.

The housing deficit, which is the shortfall between expenditure on social housing and the income from rent, currently runs to about £6.5million which is covered from public funds.

Mr Cannan said that a housing association model could remove the deficit and even become a net contributor to public funds.