By Lucy Phillips
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.
