Affordable housing crisis will 'plumb new depths' unless spending maintained warn housing bodies
Wednesday 21 April 2010
The nation’s affordable housing crisis will plumb new depths after the election, unless the three major parties commit to protecting the housing budget – the country’s housing providers have warned.
The National Housing Federation and Home Builders Federation, the trade bodies for housing associations and private developers in England, fear that cuts of 25% to the housing budget – as implied in the Budget – will have dire consequences for affordable housing provision – as well as the industry.
Cuts on this scale would mean:
574,000 planned affordable homes may not be built in the period up to 2020.
287,000 jobs in construction and related fields could be lost or not be created.
First time buyers will see vital support disappear.
The Government target to build 1m affordable homes, and 3m homes overall by 2020, could be missed by 20 years.
1.4m people may be added to housing waiting lists, which are already at record levels.
Given the devastating impact big cuts in spending would have on affordable house-building, the Federation and HBF say that housing should be viewed in the same ‘untouchable’ terms as health and education by the political parties, and protected from cuts.
Figures set out in the Budget imply spending cuts to the Government’s housing budget of 25%, which if implemented over the next decade would, according to the Federation, slash the planned number of new affordable homes by 574,000. Around 287,000 jobs in the construction industry and related industries would also be lost as a result.
The Government’s ambitious pledge in 2007 to build one million affordable homes by 2020 to accommodate the record numbers of people stuck on waiting lists will fail to meet even half that figure if cuts are imposed over the next decade.
Around 162,000 of the targeted affordable homes will have been built by April 2011. If cuts of 25% were implemented to the housing budget over the next decade it would mean, the Federation estimates, that only 426,000 of the targeted 1m affordable homes would be built – leaving a shortfall of 574,000.
If the reduced rate of building continued in the long term, it would take the Government until 2040 to build the envisaged 1m affordable homes – 20 years later than expected.
The Federation and HBF warned an extra 1.4m people who would end up on waiting lists, if 574,000 planned homes were not built. Waiting lists for affordable housing already stand at record levels (4.5m people), and more than 2.5m people are living in overcrowded conditions – an all time high. But as demand for new homes soars, just 123,000 homes were built in 2009/10, the lowest number since 1923.
A smaller overall budget would also impact the private market as there would be less scope for schemes such as HomeBuy Direct, currently acting as a lifeline for many first time buyers to get on to the housing ladder, and so hit younger people hard whilst mortgage availability remains constrained.
The two organisations also pointed out the key role played in the market and industry stabilisation in recent months by publicly funded schemes such as Kickstart – which will help deliver thousands of private and affordable homes in the coming months - as evidence that maintaining funding is critical.
They also stressed the need for more land to be made available for housing and a planning system that delivers the required amount of land in places where there is a demand in a realistic timeframe.
Federation chief executive David Orr said: 'Unless all three main parties commit to protecting the housing budget after the election, we could see affordable housebuilding falling off a cliff – with almost 600,000 planned affordable homes not being built.
'The Government believes that we need around 240,000 new homes every year. But if the housing budget is cut by 25% the number of new homes being built annually could plummet to just 100,000 homes for the foreseeable future.'
He added: 'As bad housing is closely linked to poor health and poor educational attainment a failure to protect the housing budget from the post-election spending cuts could lead to many people needlessly suffering from a triple whammy effect. Therefore, we call on all the main political parties to commit to protecting the housing budget.'
Stewart Baseley, Executive Chairman of the HBF said. 'We already have a chronic shortage of housing in this country that is having significant social and economic implications. It is imperative that public spending to support affordable house building is maintained post election if the crisis is not to plunge to new depths.'
