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Government will miss housebuilding target without more funding for affordable homes, says Savills
The government will miss its target to build 300,000 homes a year by the mid-2020s unless it increases grant funding for affordable housing and stops depending on private sales, according to a new report.
Research by housing consultancy Savills on behalf of the National Housing Federation (NHF), the G15 and Homes for the North said that completions of new homes in England are set to reach 260,000 a year by 2021. That is up from the 222,000 built in 2017/18.
However, the report (below) warned that longer-term delivery “remains decidedly uncertain”, with a slowing private market and the potential impact of Brexit set to deepen the housing shortfall.
Housebuilding may need to increase by up to a third between 2021 and 2025 to make up for the end of the current Help to Buy scheme in 2023, it added.
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Government funding for affordable housing has fallen from 50% of the cost of building before the financial crash to just 12%.
But the report said that increased grant investment in affordable housing “will add to (and not displace) private sector development of new homes” if used correctly.
It also calls for more joint ventures between the private sector, councils and housing associations and increased use of long-term funding models such as strategic partnerships by Homes England and the Greater London Authority.
Kate Henderson, chief executive of the NHF, said: “This research shows that relying on private developers to end the housing crisis is fatally flawed.
“Without government investment in affordable housing, it just won’t be possible to build enough homes to ensure that everyone can have somewhere stable and affordable to live.”
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The G15 represents London’s largest housing associations, while Homes for the North is an alliance of the region’s 17 largest associations.
Paul Hackett, chair of the G15 and chief executive of Optivo, said: “Our sector is reliant on a cross-subsidy model where the money we make from private housebuilding is reinvested into affordable homes. But this model is at full stretch and massively exposed to the market.
“Savills’ report shows that a new funding deal for affordable housing is now imperative if the government wants to hit its housing targets over the next decade.”
Carol Matthews, chair of Homes for the North and chief executive of Riverside, said: “Savills’ report demonstrates that, while housing market trends play out differently across our regions, the need for long-term funding certainty to develop much-needed new homes needs to be recognised throughout the country.”
