The Coalition Government will build just over one affordable new home per week in London and the South-East during the next four years. This is because of the planned cuts to at least 50% to the housing budget.
The NHF (National Housing Federation), who are the main voice for all of the country’s housing associations, claims that the cuts are going to be so extreme that the coalition will only fund 243 new affordable homes beyond the number that was planned by the previous Labour government.
Last year over 30,000 new affordable homes, which were categorised as more expensive than a council property but priced below market rate, were built in and around London and the South-East of England, allowing many happy families to take out household insurance on one of these houses.
The NHF say that the housing budget is going to be reduced by more than £18bn over a nine year period, leaving the government with just over £1bn per year to spend on new affordable homes. While this does look like a very large sum, almost all of the money will be needed to build homes that are already planned, meaning almost nothing is left for new properties. The news comes at a time when a record 4.5m people are awaiting the chance to occupy a ‘social home’ in England.
The NHF’s chief executive, David Orr, said “The impact of cuts of this level would lead to the building of affordable housing effectively grinding to a halt over the course of this parliament. Such a slump in affordable house building in London and the south-east would not only be bad news for millions of people on waiting lists in the region, but it would be a hammer blow to the regional economy – which should be the powerhouse of any expected economic recovery.”
The lack of affordable housing has sent shock waves though the private rental market. The situation is acute in London, where rents rose sharply to an average of £972 a month.