‘A sledgehammer needs to be taken to the UK’s housing strategy’ as affordable and social rent housing construction slumps

Homes England has revealed the levels of affordable housing being completed and begun under its schemes are down on the same period last year.

The figures have drawn heavy criticism from the housing sector with one industry expert commenting that a ‘sledgehammer needed to be taken to the UK’s housing strategy’.

Figures released today show there were 14,812 homes started under Homes England’s programmes in April to September, 8% down on the 16,115 recorded for the same period last year.

The numbers of home completions also fell by 15% to 12,118.

Of the affordable homes started in this period:
●    2,095 were for Affordable Rent, an increase of 25% on this period last year
●    1,751 were for Intermediate Affordable Housing schemes, including Shared Ownership and Rent to Buy, an increase of 19%
●    799 were for Social Rent, a decrease of 8%

Of the affordable homes completed in this period:
●    3,670 were for Affordable Rent, a decrease of 31% from the same period last year
●    3,055 were for Intermediate Affordable Housing Schemes, a decrease of 15%
●    The remaining 1,123 were for Social Rent, a 4% decrease

The figures come a week after a report by the Regulator for Social Housing found that social housing providers invested £3 billion in new homes between July and September; higher than the previous quarter but 15% below forecast for contractually committed schemes.

But the Regulator said total spend on new homes is expected to reach £17.3bn over the next 12 months, a 38% increase compared to the previous year, as earlier underspends are reprofiled.

Riz Malik, director of Southend-on-Sea-based R3 Mortgages: "A sledgehammer needs to be taken to the UK's affordable housing strategy. According to the report, housing programmes delivered by Homes England resulted in 12,118 houses completed between 1 April and 30 September 2022. The UK's population is in excess of over 68 million. Proportionally the number is so small my calculator goes into meldown. In addition, reference was made to the challenging macro-economic environment, which has impacted delivery. In a parallel universe without Brexit, I doubt we would be in the same position."

Samuel Mather-Holgate of Swindon-based advisory firm, Mather & Murray Financial: "The lack of housing stock in the UK, especially that of affordable housing, is a national disgrace. It's the one main policy area that has dogged the Government for over a decade and they simply haven't grasped the nettle. The term affordable housing means different things to different people but it is clear that there are some developments being recorded as affordable, but you'd need to be on a top salary and have a healthy deposit to afford them. It is really disappointing, but unsurprising, to see that there hasn't been any major increase in affordable housing development starts or compeltions."

Dorian Payne, director of property developers, Castell Group: "This data shows how far away we are from building enough affordable homes and how significant the affordable housing crisis is. One million households are on the housing waiting list according to Shelter. If private house builders slow down construction due to the current market and economic environment, it's going to have a direct impact on affordable housing provision, arguably at a time when it's needed the most."

Joe Garner, managing director at London-based property developer, NewPlace: "Until every single person has a permanent roof over their head, the figures are nowhere near good enough. We have over one million households waiting for a home in the UK, including people whose current housing has a serious negative impact on their (mental) health. People who are living in severely overcrowded housing. People who are homeless as a result of domestic abuse. There are people who have been on the housing waiting list for over a decade who may never get a home. Planning policy must favour the delivery of new homes until we meet every single need for housing. Quotas and targets are useless when local authorities fail to reach them without consequence. This, coupled with NIMBYism and political point scoring means we are failing the most needy in our society and must readdress our priorities urgently."

Nicola Schutrups, managing director at Southampton-based mortgage broker The Mortgage Hut: "We need to create incentives for house builders to continue building new homes in this more turbulent market. Historically, as prices have softened, house builders have slowed production to support pricing in the market. The government should keep a close eye on this and ensure the market has the right incentives to keep the new build housing market moving, which not only supports consumers but also creates and maintains jobs in the UK economy."

Homes England said: “Though these figures demonstrate a decrease in starts and completions on the same period last year, this is largely due to the transition from the Shared Ownership and Affordable Homes Programme (SOAHP) 2016-21 to the Affordable Homes Programme (AHP) 2021-26; bidding for the SOAHP 2016-21 closed in March 2021, and the AHP 2021-26 is still building its delivery capacity after launching in 2021.

“10,986, or 74%, of the housing starts on site during this period were for affordable homes. This is in line with the same period last year, where 73% of all starts on site were for affordable homes.”

Peter Denton, Chief Executive at Homes England, said: “Our partners are operating in a challenging environment with many macro-economic pressures, including material, labour shortages, and rising cost inflation. All have impacted delivery.

“This slight decline in numbers is also not unexpected during the transitional period between two programmes.

“We know that our partners are likely to face continued pressures in the coming period. Our shared mission of providing quality, affordable housing for those that need it most is more important than ever, and our focus is firmly on supporting our partners and maximising delivery.”

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