Minister decries mixed-tenure housing model

The traditional model for building mixed-tenure communities has failed and will not work in the present climate, a government housing minister has admitted.

Iain Wright MP, junior housing minister, said that developers and housing associations should not think that they would be able to carry on delivering affordable homes in mixed estates by cross-subsidy from private-sale homes.

Speaking to a fringe event at the Labour Party conference, he said: “The current business model has failed: it is not suitable to the current circumstances. We are entering a new era, and I believe that different forms of shared ownership will come to the fore.

“Section 106 contributions have dried up. The current social housing model for mixed communities funds the homes through the selling of private houses. This model falls if mortgages simply aren't being agreed.”

The current business model has failed: it is not suitable to the current circumstances. This model falls if mortgages simply aren't being agreed

Iain Wright MP, junior housing minister

Wright said that it is possible there may be further government action to help first-time buyers with deposits for buying new homes.

The minister was responding to concerns from the audience at the fringe event that only social housing is now being built, which could result in mono-tenure social housing estates in future.

Housebuilding starts have recently hit record lows following prices falls of 12% and a collapse in new mortgage lending of over 70%.