Housing associations and councils need to be put on a secure financial Housing associations and councils must be financially secure in order to afford the purchase of ‘affordable homes’, according to the construction industry. footing, so they have the money to buy ‘affordable homes’, urges the construction industry.
- 17,432 homes with detailed planning permission affected
- 139 sites nationwide are delayed
- Housing associations and councils’ lack of finances to blame
Over 17,000 ‘affordable homes’ stalled due to lack of buyer funds
Nearly 140 sites across the country are being held up because developers are struggling to sell ‘affordable homes’ to housing associations and councils.
The delivery of at least 17,432 affordable homes with detailed planning permission has ground to a halt reveals a studyof 31 Homebuilders Federation, HBF, members.
HBF chief executive Neil Jefferson said: “The lack of registered providers in the market to take on the affordable housing delivered by the private sector is a major and growing problem, increasingly threatening affordable and overall housing supply.”
He added: “Small sites are being prevented from starting, and larger sites are being halted due to the inability of developers to meet the affordable housing delivery requirements of the planning permission.”
Esquire Developments’ head ofland and planning Andy Wilford, said the situation was affecting builders nationwide and put the government’s 1.5m new homes target at “substantial risk”.
“It is a problem that is affecting ‘oven ready’ sites and those that have already managed to navigate the complicated planning process,” he toldThe Guardian.
Under local authority Section 106 agreements developers agree to build a significant proportion of homes sold to registered providers at a reduced rate. They accounted for 44 per cent of the 62,000 affordable new homes built last year.
SMEs developers among the hardest hit
Brokers Hank Zarihs Associates said without a contracted 106 deal, small builders could struggle to secure development finance to start the project.
Larger sites can be stalled because planning permission requires the affordable element of the site to be delivered at a certain point.
The HBF is calling for housing associations to be put on a firm financial footing so they can buy the affordable housing delivered by developers.
“If unaddressed, this issue will lead to further delays, therefore jeopardising the housing pipeline and undermining the government’s target of delivering 1.5m new homes during this parliament,” said Mr Jefferson.
The HBF said the inability to discharge affordable housing obligations coupled with the lack of affordable mortgages was suppressing private sales and was holding back housing supply.
A spokesperson for the ministry of housing, communities and local government said a new clearing service to accelerate the sale of uncontracted and unsold affordable homes had just been launched.
The government’s housing delivery agency Homes England will provide details of affordable homes with permission to build that have been unable to find a buyer. This will be available for registered providers and councils to view.
“This means greater visibility of opportunities, all in one place, for buyers and sellers to connect, build new partnerships and work together to get affordable homes sold and occupied,” said a Homes England press officer.
The National Federation of Builders has asked the government for ‘affordable homes’ to be sold on the open market if after four months they have not been bought by a council or housing association.
The National Housing Federation, NHF, said social landlords were under significant financial pressure post-Grenfell to ensure their properties were safe. The estimated cost of this is £6bn plus huge bills associated with fixing reported health hazards under Awaab’s law. A below-inflation cap on how much rent they can charge tenants has exerted a further squeeze.
LinkedIn Question: Should the government offer to buy ‘affordable homes’ if a council or housing association buyer fails to materialise?