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Sector calls for government help as London associations cut development plans
The social housing sector has called for the government to intervene amid a move by London housing associations to cut their housebuilding plans in response to a waning property market and escalating fire safety costs.
Leading housing sector figures and groups have called on the government to provide a cash injection for associations as details of significant changes to housebuilding plans come to light.
The National Housing Federation, the G15 and the Chartered Institute of Housing have all called for more cash to be handed to the sector, while James Murray, the deputy London mayor for housing said the government needed to provide the mayor with more powers to help mitigate the instability caused by Brexit.
The calls come as large housing associations in the capital reveal that they have altered their development plans in the face of twin pressures.
London house prices have been falling consistently for a year, the first time this has happened since the financial crisis.
While social landlords have also massively increased the amount they’re spending on fire safety, with seven G15 associations declaring publicly that they will set aside at least £212m between them to cover the works.
Clarion, the UK’s largest housing association, has abandoned its target to get up to 5,000 homes per year by 2022 and is now aiming instead to achieve this by 2027.
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Notting Hill Genesis, meanwhile, has decided not to add any new schemes to its pipeline.
L&Q, Optivo and Metropolitan Thames Valley, three other major London associations, have also outlined plans to reduce the number of market sale homes they will build in the short term, though they have not changed their overall targets on numbers.
Geeta Nanda, vice-chair of the G15 group of large London housing associations, told Inside Housing that associations needed additional help to safeguard development ambitions. She said: “It’s about committing to new schemes going forward. If you’ve got a slower rate of sale, you’re going to have more stock slipping into the following year.”
Ms Nanda, who is also chief executive of Metropolitan Thames Valley, said City Hall had been “very helpful” in offering flexibility, but there was only so much it could do without further support from central government.
She added: “You can shift more into affordable housing but only if there is the support there to make that shift. It means a higher grant rate and flexibility for the programme.”
Mr Murray said that Brexit was hitting private development in London, including the market sale homes in housing association’s programmes. He said: "The Mayor has been clear that to build all the homes we need, and particularly to get through a ‘no deal’ Brexit, we need a real step change of powers and investment from the government.”
Will Jeffwitz, policy leader at the National Housing Federation, said that drastic cuts to government funding had left associations more open to risks of a market downturn particularly in London and the South East. He said this, in addition to the increasing cost of fire safety remediation, meant some associations were having to consider their development plans.
He urged the government to urgently commit to £12.8bn each year to build more homes and a building safety fund to cover remediation work.
Melanie Rees, head of policy at CIH, echoed the NHF’s call for £12.8bn a year, saying that this was needed if the country could build the affordable and social rent homes it needs.
While prices have been falling in London for over a year, outside the capital they continue to grow and housing associations in regions further north have not reported the same market difficulties.
Fiona Fletcher-Smith, group director for development and sales at L&Q, told Inside Housing: “What’s different for us is we’re a national housing association. A lot of our building is outside London. It’s in the Midlands, in Trafford. What’s happening in London isn’t the only story for L&Q.”
A Ministry of Housing, Communities and Local Government spokesperson said: “Providing quality and fair social housing is a top priority for the government, which is why we’ve invested £4.8bn to build more affordable properties in London.
“We’re providing £2bn of long-term funding through to 2028/29 for housing associations to build more homes. It’s the first time any government has offered housing associations such long-term funding certainty, giving them the confidence and flexibility they need to deliver.”
