11 Nov 2011
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Call to act on social housing row

The Home Builders Federation (HBF) has urged the government to break the logjam that has delayed the Homes and Communities Agency’s £1.8bn social housebuilding programme after housebuilders warned the row was hampering private development, writes Michael Glackin.

The HBF plea follows criticism from a number of housebuilders who claim private schemes are being delayed because of the continuing argument between local authorities and housing associations over rent levels for affordable housing.

It also comes at the same time as the NHBC revealed new build levels in the private sector remain well below the government’s annual target of 200,000 private homes, with just 93,870 registrations in the first nine months of this year.

A spokesperson for the HBF said: “The government needs to work with industry and find solutions to address this barrier to delivery. The delivery of private sector housing and affordable social housing are inextricably linked now. Without one, you don’t get the other.”

Housebuilders work with housing associations and local authorities to construct a specified amount of social housing on private developments, primarily through Section 106 agreements.

But just 41 out of 146 housing associations, or registered providers, have signed up to the new funding programme with the HCA because some local authorities are refusing to allow the associations to charge higher rents in their areas. This has resulted in a knock-on delay to private developments.

Rose Sandell, group partnership director for Redrow Homes, said: “Since the announcement of changes to the delivery of social housing, we have been frustrated by the lack of clarity and commitment to schemes from registered providers.”

Colin Smith, director with Crest Nicholson’s Partnership Homes, said his company had to delay construction on several of its sites because it lacked a housing association to work with.

Chris Moquet, housing partner at Calfordseaden, said that more delays were the last thing the industry needed. ”These delays have knock-on affects for all in the supply chain.”

It is estimated that around half of all new social housing is built through Section 106 agreements, although the government is considering scrapping them as part of its overhaul of planning.

The programme was introduced by government to reduce spending on social housing by 50%.

Last month housing minister Grant Shapps asked civil servants to investigate the dispute.

Under the new system housing associations make up for the shortfall in government funding by raising more cash for development through charging up to 80% of market rent on new homes. But many local authorities are refusing to agree to the rent increases.

A spokesperson for the HCA said: “We anticipated that signing contracts under a new system could take longer. But £500m worth of contracts delivering nearly 28,000 new homes have already been signed.”