29 August 2008
Social landlords are propping up the house building industry by embarking on more schemes while private development programmes are put on hold.
Starts on new homes by registered social landlords rose by 56% between the second quarter of 2007 and the same period this year. RSLs began to build 5,840 homes between April and June, compared with 4,300 in the previous quarter and 3,740 one year earlier.
Starts by private builders fell by 27% (from 38,940 to 28,380) between the second quarter of 2007 and the same period this year. Meanwhile, local authority starts rose from a modest 70 to 130, according to a report published by the Department for Communities and Local Government on August 21.
But the record of RSLs is slightly less encouraging when it comes to completed homes. While the number was higher in the second quarter of 2008 than in 2007 (up from 4,600 to 5,620), it is lower than the 7,000 achieved in January to March this year.
Overall completions fell by 4% to 161,000 over the 12-month period to June. The only region not to register a fall was Southeast England. 'If this downward trend continues, it is likely that net supply will fall between 2007/08 and 2008/09,' said the DCLG.
Gavin Smart, assistant director of the National Housing Federation, said the increase in starts showed RSLs were successfully meeting the demand for more affordable homes. The decline in completions between the first and second quarters of 2008 was due to RSLs and builders attempting to hit targets before the end of the financial year.
'The credit crunch has undoubtedly made the backdrop for delivering new homes far more challenging,' he added. 'However, we are confident that housing associations will meet their targets for the rest of this financial year.'
Private builders are increasingly relying on housing association contracts to get through the financial crisis. Earlier this month, Newcastle-based Bellway announced a 14% drop in overall sales but said that it expected deals with RSLs, which already make-up 20% of its business, to increase in the remainder of 2008/09.
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