‘Affordable homes’ building at 25 year low

Howard Chapman, Buildingtalk Editor looks at the latest ‘Affordable Housing Supply’ report that shows 52% fewer affordable homes have been built than last year – and the lowest number for 25 years. Homes are a key part of the infrastructure of the nation and we need find new solutions that offer a realistic prospect of ‘affordable homes for all’.

Affordable Housing Supply report

The Department for Communities and Local Governement has just published its latest ‘Affordable Housing Supply’ report that shows the level of affordable house building has dropped to the lowest for 25 years with just 32,110 affordable homes were delivered in England in 2015/16. This included 6,550 social rent, 16,550 affordable rent and 9,010 affordable home ownership, shared ownership and intermediate rent.

52% less new affordable homes

Overall, this is a staggering 52% lower than the number of affordable homes built in the previous year. However, this reflects the transition from the 2011- 2015 programme to a new Affordable Houses and Shared Ownership programmes that should help improve the numbers going forward. But this is not going to meet the growing demand for affordable housing.

Housing Crisis

This latest report on the shortage of affordable housing is just one of many recent reports into Britain’s housing crisis.

The Redfern review detailed the catastrophic slump in home ownership as real house prices jumped 151% since 1996, while real earnings rose only by a quarter of this.

Pete RedfernChief Executive at Taylor Wimpey said in the preface to the report “The nation faces a housing crisis, at the heart of which is the falling rate of homeownership”. But it could be argued that the recent focus has been almost solely on new build homes that have made a few housebuilders big profits (including Taylor Wimpey – last full year profits up 34%), but does not address the massive shortfall in affordable homes to buy or rent.

Build-to-rent boom with new investors

The private rental sector is becoming increasingly important. The government set up a £1 billion fund to pump-prime build-to-rent projects. Estate agent Knight Frank estimates that £15bn has already been invested this will grow to nearer £50bn by 2020. 

New large corporate investors are coming into the build to rent market including the big UK insurance companies like Legal & General and Aberdeen Asset Management, plus investors from Sweden, Germany and Canada, and US companies like Greystar.

Could new rail and road projects deliver housing?

Some of the major infrastructure transport projects could also help deliver affordable housing if the government decides that the supply of affordable housing should be part of the UK infrastructure plan. For example, Crossrail 2 could deliver huge amounts of housing in the capital but only if the government devolves powers to London councils. Back in the summer this created headlines that highlighted the opportunities by saying that Crossrail 2 could become a ‘housing project with a railway thrown in’.

Affordable homes for all

Continuing as we are is making the situation worse, with ever more expensive homes, less available land and a shortage of skilled workers.

We need a vision that sees affordable homes for all as part of the real infrastructure of the nation, and a vision that offers new solutions.

Links to related statistics

Affordable starts and completions funded by the HCA and the GLA

Delivery of affordable housing in London

Help to Buy (Equity Loan scheme)