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Affordable house building may ‘grind to a halt’

The National Housing Federation is warning of a crisis in affordable house building if the Government goers ahead with planned budget cuts.
The Federation, which represents England’s housing associations, said radical changes to the planning system combined with threatened funding cuts could see the number of social homes built this year slump by 65%, to just 20,390.

It has written to the Housing Minister Grant Shapps to urge the Government to honour its spending commitments on new housing schemes during this financial year and to halt further changes to the planning system, which could make it almost impossible to get new homes built.

Shapps warned earlier this week that around 150 social housing projects were under threat because of a £610m ‘black hole’ in the Government’s finances. It has already announced that £100m will be cut from the National Affordable Housing Programme (NAHP), which was meant to deliver 59,0000 new social homes this year 2010/11. The withdrawal of this funding will see plans to build another 1,453 social homes axed.

But the sector could also face a double blow as changes in the planning system could prevent tens of thousands affordable homes being built. The government is thought to be considering scrapping ‘section 106’ agreements – paving the way for private developers to end their commitments to building affordable homes on new private developments.

This could lead to around 19,000 social homes being axed as a result this year.

And the Government’s re-designation of gardens from brownfield sites to greenfield – in a bid to end so called garden grabbing – could see a further 10,000 new homes hit.

Federation chief executive David Orr said: ‘The brutal impact of funding cuts combined with the introduction of ill conceived changes to the planning system could lead to a 65% slump in the number of new affordable homes built this year.

‘Worse still, unless the Government takes steps to modify some of the policies recently announced we fear that the overall number of affordable homes built in subsequent years could fall to an even lower number. ”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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