Housing associations could stop buying Section 106 amid new homes ‘cliff edge’, L&Q chief warns

While the for-profit sector might be able to step in and buy more Section 106 homes, it will not be at the same rate that housing associations have managed for the past few decades, she added.

Ms Fletcher-Smith told the panel: “Every year since 2019 I’ve been saying, ‘We’re going off a cliff, this is going to be really bad’. Last year L&Q built 4,000 new homes, so it kind of undermines what I’ve said, doesn’t it?

“No it doesn’t. Anybody who knows anything about development knows that those homes that we completed last year, those decisions were made five to seven years before that.”

Last month the G15 group of London’s biggest housing associations, which Ms Fletcher-Smith chairs, said that starts of affordable homes in the capital in 2023-24 are expected to have fallen by 76% to 1,769, compared with 7,363 the previous year.

She continued: “The cliff edge is coming. You’re seeing it in London early because of the fire safety work we’re having to pay for… this wave is coming.

“And it’s not just going to hit the housing association sector because we’re the people who buy the Section 106 homes from the volume builders. If we stop buying the Section 106 homes, you stop getting planning permission as a volume builder.”

“Although the for-profit sector may be able to step in, it won’t be at the same values and rates that the housing association sector has been doing over the last 30 years.”

During the same panel, Ms Fletcher-Smith urged government to “stop messing” with the planning system and “resource what we have properly”.

She also suggested the chancellor could consider a windfall tax on companies profiting from providing temporary accommodation for homeless people, such as Travelodge.

Last month, the G15 called on the government to launch an Affordable Housing Commission as figures revealed that development in the capital is “grinding to a halt”.