Plans for 300,000 new social and affordable homes over the next decade will generate a pipeline of work for SME housebuilders and contractors, claims the industry.
Deputy prime minister Angela Rayner has said 60 per cent of the £39bnpledged for affordable housing should be spent on building 180,000 new homes where rent is linked to local income.
“With investment and reform, this government is delivering the biggest boost to social and affordable housing in a generation, unleashing a social rent revolution, and embarking on a decade of renewal for social and affordable housing in this country,” said Ms Rayner.
She said the planned 180,000 social rent homes would be a sixfold increase in the number built in the decade up to 2024.
The government has set out how it will execute its plan in Delivering a Decade of Renewal for Social and Affordable Housingpublished this week.
The housebuilding industry hopes the changes will mean developers’ affordable homes quotas under section 106 agreements with local councils will be shelved.
Since the building safety act in April 2022, many housing associations and councils have stepped away from new developments concentrating on dealing with legacy building and safety issues. This has meant developers have struggled to sell their affordable housing quota to registered providers.
National Federation of Builders, NFB, policy and market head Rico Wojtulewiczsaid:“If we want to solve the housing crisis, we must rid ourselves of this awful policy which has weakened the UK housebuilding industry by restricting supply, making projects unprofitable, embedding legal challenge.”
Brokers Hank Zarihs Associates said development finance lenders supported the £39bn investment as it would help registered providers re-engage with stalled developments and stimulate the market.
Councils keen to return to building more new homes
Local authorities such as the London Borough of Southwark are among a coalition of 112 councils, responsible for nearly 1.3mcouncil homes,that support the changes.
Southwark council leader Cllr Kieron Williams said: “This really is a sea change. After years of governments slashing funding for affordable homes and selling off council homes for a song, we can finally start to turn our national housing crisis around.
“We look forward to working with the government to deliver the new and upgraded council homes that our communities need.”
Since July 2013 Southwark council has built, or is on-site constructing, more than 3,000 council homes.
Homes England will be responsible for distributingmost of the funding with £11.7bn to support housing delivery in London.
The NFB hopes that once the public sector takes on responsibility for delivering more social housing this will act as a catalyst for reforming the planning system.
The government will work with housing associations and councils to agree on a joint overall target on how many social and affordable homes can be delivered. A 10-year settlement for social housing rents will be introduced from April 2026 to givecouncils and housing associations certainty to reinvest in existing and new housing stock.
Decent homes standards will be modernised and extended to the private rental market with minimum energy efficiency standards implemented for the first time in social housing.
Right to buy will be reformed to protect housing stock and enable councils to increase new housing delivery.
LinkedIn Question: How optimistic are you that building more social housing will act as a catalyst for economic growth?
