Up to 8,500 affordable homes at risk of standing empty

Img

Up to 8,500 Affordable Homes that are scheduled to be built over the next year are at risk of standing empty, the Home Builders Federation has warned.

The trade body says that more than 700 developments have stalled as social housing providers have reduced their take-up of the properties built under Section 106 contracts.

Under these rules, local authorities dictate how many properties meeting the government’s Affordable Homes definition – meaning they will be offered at below market value – developers must build on each site.

The intention is that these homes are bought by registered housing associations to offer social rented and shared ownership accommodation.

However, the model relies on social housing providers’ financial ability to buy the properties.

Analysis by the HBF estimates that 900 completed Affordable Homes are currently standing empty, because social housing providers have yet to commit to buying them.

Without contracts in place for these homes, housing delivery grinds to a halt as developments are stalled, phased in more slowly or deemed completely unviable.

The HBF says this puts extra pressure on small and medium home builders, as their capital is tied up in projects, on which they are often paying for finance.

It can leave them without the cashflow to invest in latter phases of the project or in new developments. 

The warning comes as Zoopla analysis found that building new homes is not financially viable across half of England.

HBF chief executive Neil Jefferson says: “Against rising affordability pressures and increasing numbers of families living in temporary accommodation, it cannot be that Affordable Homes are left standing empty.

“Government’s social and affordable housing announcements were a welcome step to giving registered providers confidence to plan long term, but they are doing little to ease the immediate constraints of delivering affordable housing through Section 106 agreements.

“Right now, an estimated 100,000 private units are stalled, which not only threatens the supply of much-needed homes but also risks the livelihoods of regional businesses and hardworking tradespeople up and down the country.

“While government’s housing announcements have been welcome, as it stands, housing associations are unable to bid and private buyers unable to buy, leaving the housing outlook increasingly uncertain.”


More From Life Style