Housebuilders to be hit by affordable housing slump

Housebuilders could be hit by massive fall in the number of affordable homes according to a new report.

According to a study by the National Housing Federation affordable housebuilding is in danger of grinding to a halt this year as money already pledged for new projects is threatened with withdrawal, budgets are cut, and sweeping changes to the planning system make it increasingly difficult to get homes built, a campaign group warned today.

The National Housing Federation, which represents England’s housing associations, said radical changes to the planning system combined with threatened funding cuts could see the number of social homes built this year slump by 65%, to just 20,390.

This would be the lowest annual total of affordable homes built since 1990/91.

The Federation has written to the Housing Minister Grant Shapps to urge the government to honour its spending commitments on new housing schemes during this financial year and to halt further changes to the planning system, which could make it almost impossible to get new homes built.
Shapps has already warned that around 150 social housing projects were under threat because of a £610m ’black hole’ in the Government’s finances. The government has already announced £100m will be cut from the National Affordable Housing Programme, which was meant to deliver 59,0000 new social homes this year 2010/11. The withdrawal of this funding will see plans to build another 1,453 social homes axed. 
Federation chief executive David Orr said – “The brutal impact of funding cuts combined with the introduction of ill conceived changes to the planning system could lead to a 65% slump in the number of new affordable homes built this year. Worse still, unless the government takes steps to modify some of the policies recently announced we fear that the overall number of affordable homes built in subsequent years could fall to an even lower number”.