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Rent cut hiatus blamed for affordable housing drop
A hiatus in housing association building following the 1% rent cut announcement has been blamed for the lowest growth in affordable housing witnessed in a generation.
Figures released by the Department for Communities and Local Government (DCLG) last week revealed net additions to the affordable housing stock was 32,110 in 2015/16, a fall of nearly 52% and the lowest since 1992.
Although a drop was expected as a new funding round of the Affordable Homes Programme began in 2015, the fall is the steepest drop since figures began.
Sector figures blamed the decrease on the turmoil created by government policy announcements, including the rent cut and plans to cap benefits at Local Housing Allowance levels.
These forced housing associations to put development plans on hold as they re-ran assumptions in business plans.
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David Orr, chief executive of the National Housing Federation, said: ?As we said at the time, changes like the rent cut and the Local Housing Allowance cap have created an extremely uncertain environment for housing associations trying to build the homes the nation needs.?
Keith Exford, chief executive of Affinity Sutton, said: ?There?s a profound impact once you take capacity out of business plans. It was absolutely predictable that if you take away our ability to borrow and you remove public subsidy, you get far, far less.?
He added that Affinity Sutton had slashed its building programme by 20% following the social rent cut.
Paul Hackett, chief executive of Amicus Horizon, said the drop was only partly due to the cyclical nature of developments. ?There was also the 1% rent cut [announcement] and historically low levels of grant as well as uncertainty over how the current programme was going to be funded. This has led to a hiatus in new starts,? he said.
But he added that he expected the rate of development to bounce back due to ongoing consolidation unlocking new capacity.
A DCLG spokesperson said: ?Delivery is normally lower in the first year of any new housing programme and so these figures are expected as part of a five-year housebuilding cycle.?
