You are viewing 1 of your 1 free articles
London’s biggest housing associations plan to cut development by up to a third
Some of London’s largest housing associations are planning to scale back their development plans by as much as a third, Inside Housing can reveal.
The G15 group has warned MPs that the outlook for development in the near future has “without doubt become bleaker” and that its members will prioritise investment in existing homes without additional government support.
The industry body, made of London’s 11 biggest housing associations, made the comments as it responded to an inquiry into social housing finance by MPs in the Levelling Up, Housing and Communities Select Committee.
“A number of G15 members have reviewed the scale of their development programme due to rising inflation and interest rates, with some members planning to scale back development programmes by as much as a third,” the response said.
READ MORE
It continued: “Without additional funding and support to build homes or to meet other costs, many G15 members are likely to reduce development programmes to meet challenges and to prioritise investment in existing homes in the coming years.”
Because of a variety of challenges, including the economic turbulence of the past 12 months, high inflationary costs, planning policy uncertainty and other competing priorities, “the outlook for development in the near future has without doubt become bleaker”.
The G15 estimated that the combined impact of changes to rent policy by the government since 2016 has reduced reinvestable resources to the 11 members by £6.6bn to 2024.
It added that the combined impact of the 2023-24 rent cap, voluntary capping of shared ownership rents in 2023-24, and the absence of the rent convergence mechanism will see a further £12.4bn of reinvestable resources lost to members.
The housing associations recommended policies including the reintroduction of rent convergence, specific grant funding for regeneration and a requirement to release land for affordable housing.
Geeta Nanda, chair of G15 and chief executive of Metropolitan Thames Valley, said: “Housing associations have shown incredible versatility and innovation to continue meeting the range of priorities we and the people we provide homes to have.
“However, with the loss of £6.6bn in resources for investment since 2016 due to government rent policy changes, and over 60% cuts to funding for new affordable homes, our capacity is being put under growing pressure.
“Housing associations build almost one in four new homes, and if we reduce our programmes to meet costs like building safety and retrofit, I am really worried that the gap won’t be filled and it’s people in dire housing need that will suffer.
“A long-term plan for social housing is desperately needed. At its heart must be certainty on rent policy and a commitment to funding to build many more of the most affordable homes.”
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
