By Neil Merrick
Housing associations and developers are scrapping plans to build homes for low-cost ownership because of the mortgage crisis.
Housing associations and developers are scrapping plans to build homes for low-cost ownership because of the mortgage crisis.Work started on just 10,787 low-cost home ownership properties last year, well below a government target of 14,000. With first-time buyers struggling to arrange mortgages, many of these homes have since been earmarked for social renting.
Provisional figures from the Homes and Communities Agency also show that 19,743 low-cost homes were completed. This was up from 18,865 the previous year but well down on the government’s 2008/09 target of 21,600.
The last two quarterly surveys by the Tenant Services Authority both showed about 10,000 low-cost properties standing empty because housing associations could not find buyers.
The HCA’s preliminary figures, published on April 14, included money allocated by the Housing Corporation before the agency’s launch in early December.
In spite of the recession, the two organisations spent £2.6bn between them out of the £8.4bn three-year National Affordable Housing Programme funds, in line with government projections.
Work started on 30,389 homes designed for social renting in 2008/09 (up from 27,209 in 2007/08) and 27,501 social homes were completed. In both cases, the target for the year was exceeded.
Junior housing minister Iain Wright praised the agency for making ‘a fantastic beginning’ in the face of severe economic challenges.
But the HCA, which also inherited regeneration schemes from English Partnerships, is finding it harder to attract private funds. A total of £1.02bn was raised for property and regeneration programmes in 2008/9, compared with the government’s target of £1.09bn—£1.19bn.
HCA chief executive Sir Bob Kerslake said the agency was aware of the difficulties it faced in raising private sector investment and supporting mixed-use regeneration schemes.
But he described the overall figures as ‘a massive achievement’ considering market conditions. ‘These results give us confidence in our ability to deliver in the next financial year, despite the market,’ he added.
