OBR: associations will reduce housebuilding by 13,000

The OBR said that despite additional funding to support housebuilding announced by chancellor Philip Hammond, the net effect of policy decisions would be to reduce the number of homes developed by associations by 13,000 over the next five years.

But housing associations told Inside Housing they remain upbeat about the positive impact on building from the Autumn Statement.

Ann Santry, chief executive of Sovereign, said: ?Given what we?ve been told about the additional funding for infrastructure and for extra homes, it seems to me that on balance we will be able to up supply.?

Sanctuary Housing upped its estimated output from 24,000 homes to 30,000 after the Autumn Statement. Other associations plan to build more through the grant programme than they would have ? having limited their appetite due to the risk of building shared ownership housing.

The OBR based its analysis on the decision not to force associations to set higher rents for high-income tenants ? Pay to Stay ? and dropping the requirement for associations to build shared ownership homes under the Affordable Homes Programme. The OBR said these followed on from the 1% cut in social rents announced in July 2015 in restricting associations? income.

It said the grant change would lead to reduced cash flows ? as higher levels of grant are needed for affordable rented products and associations would lose out on sales income ? thus reducing the volume of expected housebuilding.

The National Housing Federation (NHF) successfully lobbied the government for flexibility in developing different tenures under Affordable Homes Programme funding.

In July the NHF said 300,000 homes could be built over five years if the money could be used flexibly. This concession was granted in the Autumn Statement.