The National Housing Federation has criticized the Government’s decision to cut the affordable housebuilding budget by 60%.
However, it has welcomed proposals to grant social housing providers flexibility around setting rents, and the length of tenures for new lets. Increased flexibility is one of the major issues over which the Federation has lobbied the Government in recent years.
At the same time, the Federation has warned that rents rise to up to 80% of the market rate to make up the shortfall thousands of social housing tenants could be trapped in a lifetime of poverty.
The average rent for a three-bedroom social home is £85 a week. But under the plans to allow increases in rents of up to 80% of the market rate, that figure could triple to a £250 a week.
Federation chief executive David Orr said: ‘The fact that the housing budget is being cut by 60% is deeply depressing – and shows that providing affordable housing is no longer a government priority.
‘Cuts on this scale will come as a devastating blow to the millions of low income families currently stuck on housing waiting lists.
‘The harsh reality is that because of these cuts, the new social homes this country so desperately needs, can now only be built by dramatically increasing rents for some of the most vulnerable and poorest in our society.
‘Most tenants simply won’t be able to cover these extra costs, and as a consequence make it more difficult than ever for people to escape the poverty trap and benefits dependency that the Government has repeatedly said it wants to tackle.”