Sir – At the time of writing (early August 2014), the Homes and Communities Agency had just allocated more than half of its £1.7 billion grant funding for the 2015-2018 affordable homes programme and it’s clear that some of the biggest landlords are shrinking their bids by between a half and two-thirds of their previous programmes.
This is not good news for either the 1.7 million households currently waiting to be housed or the country as a whole.
Already some providers have warned that the grant rates were too low and the conditions too onerous to justify bidding, and pointed to the replacement of social rents with higher affordable rents combined with the welfare cuts as being unsustainable. Indeed, many landlords in the North of the country warned that low grant rates did not make sense economically in an area where low market rents mean lower affordable rents.
It was hoped that the government’s 10-year rent settlement would provide sufficient stability, but it seems this has been undermined by landlords’ unwillingness to raise rents to levels that are increasingly unaffordable to their tenants.
The news that housing providers could struggle to build sufficient homes after 2015 comes after it was announced that there are concerns whether landlords will even deliver the current 2011/15 affordable homes programme. Government figures show starts onsite had only reached 42,000 by last autumn against a target of 58,000 homes to be completed by March 2015, casting doubts on whether the homes will be finished in time.
So if housing providers have lost their development appetite (for whatever reasons), where will the future new homes come from? Certainly there has been an increase in private developers bidding for grants, but that on its own won’t be enough.
Someone will have to do something either at government level to encourage landlords to invest in new builds or by the private sector taking a more active role with stock- and land-owning councils. Otherwise the country could be facing a social housing crisis in the next decade.
Keith Searle
Development Director, Shelton Development Services
