15 June 2010
A near-halt in affordable house building this year could have social ramifications lasting for decades, Public Finance has been told.
The National Housing Federation this week warned that anticipated government funding cuts and changes to the planning system could reduce the number of social homes built this year by 65%, to just 20,390. This would take the annual number of new affordable homes to its lowest level since 1990, at a time when the sector faces record demand.
NHF chief executive David Orr said: ‘Given the scale of housing need across the country, we cannot afford for the building of affordable homes to effectively grind to a halt.’
The concern was echoed by the Chartered Institute of Housing. Abigail Davies, CIH head of policy, told Public Finance that cuts on this scale could have ‘knock-on’ social problems lasting for 20 to 30 years. These included people ‘living in less than ideal conditions’, such as overcrowding and ‘grown up children’ still living with their parents while having their own families. Others would be ‘crippled by debt’ as they took on mortgages far greater than they could afford, while pressure would also mount on local authority statutory services. Meanwhile, in the short term, building firms and developers would be hit, leading to higher unemployment, she warned.
‘There’s always a lot of argument around how many homes need to be built but we all know it is more than is going to be built,’ Davies added.
Last week, housing minister Grant Shapps said around 150 social housing projects were under threat because of a £610m ‘black hole’ in the public finances. The government previously announced that £100m would be cut from the National Affordable Housing Programme.
The NHF also called on the new government to reconsider plans to scrap regional house building targets and enforce stricter controls on ‘garden grabbing’, which it said would make it harder to build new affordable homes.
But Shapps defended the new policies. ‘Houses cannot be built by targets that don’t work with money that doesn’t exist. We have the lowest peacetime rate of house building since 1924 and a system of top-down control that alienates the public and undermines support for new housing.’
He added that the government had ring-fenced £170m for 4,000 otherwise unfunded social rented homes this year, safeguarding around 3,500 jobs.
