London hit a record decline in affordable housing

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London is heading for its worst fall in affordable housing supply in decades as inflation, high interest rates and building safety costs hurt housing associations’ finances.

“We warned the previous government about the impending cliff. It’s going downhill now,” said Fiona Fletcher-Smith, chair of the G15 Greater London Housing Associations, the not-for-profit groups that build and manage much of the UK’s affordable housing.

Official data monitoring housing starts, the main supply indicator, all show a significant decline London As of last year, suppliers warn that it’s getting worse.

Affordable housing starts fell 88 percent year over year to March from 26,386 to 3,156. The largest decline since 1990 through June.

A lack of new affordable homes has led to increased homelessness and pressure on local councils’ resources. London boroughs collectively spent £4mn a day on people facing homelessness in the year to March, a 68% increase on the previous year.

Affordable housing provision – a broad category that includes schemes such as shared ownership as well as social rental properties provided by government-controlled housing councils and housing associations – has collapsed. throughout the countryMostly due to high interest and rising construction costs.

The lack of these properties has driven many people into the private rental sector, where rents have risen sharply this year. It is said that the high cost of housing in London has caused people to move out of the city on low incomes and further away from job opportunities.

Scandals surrounding poor conditions in existing social housing have led to tougher standards for providers, which Back to the new building To give money for maintenance.

Will Jeffowitz, head of policy at the National Housing Federation, which represents housing associations, said these pressures were “worse in London than anywhere else” because of the old housing stock and the high costs of operating in the capital.

But the “main driver” of the crisis in London is the price Construction safety work On the tall buildings after the Grenfell Tower fire.

“London is disproportionately affected by building safety costs due to the number of buildings and the cost of renovating them. Those two factors combined are probably the biggest factors holding back funding for housing associations in London,” Jeffwitz ​​said.

Fletcher-Smith, chief executive of housing association L&Q, said his firm alone faced hundreds of millions in repairs to hundreds of tall buildings.

Housing associations are struggling to find the money to buy affordable housing that private sector developers must include in new developments, which has delayed these projects.

These cases highlight the link between the government’s desire to increase housing supply, especially social housing, and its promise to speed up construction safety measures.

The government has promised more help for building safety costs, which it has promised to announce in the spring alongside a new funding program for affordable housing. It launched the current program at £500mn, and offered housing associations a five-year rent payment above 1 per cent of inflation.

Government grants cover on average 12 per cent of the cost of building new affordable homes in London according to the G15, compared to 75 per cent in 1990. The 2010-15 Conservative-Liberal Democrat coalition government cut funding by almost two-thirds. .

Andy Hulme, chief executive of housing association Hyde Group, said: “Social landlords’ finances have been hit hard by four years of rent cuts and below-inflation rent settlements.”

The London Authority, which is the most affordable in the city, said 582 homes had been started on its housing programs in the six months to September. These figures are up from 142 last year, but still down 80 percent from the annual average of the past four years.

Mayor Sadiq Khan said in London last month: “The hardest time for house building . . . In the year Since the global financial collapse of 2008.

A spokesman for the Mayor of London said: “After 14 years of underinvestment, change will not happen overnight, but the Mayor is committed to working hand in hand with the Government to create a better and fairer London for all. “

Falling starts are expected to feed into a decline in home completions in the coming years, which will take years to turn around.

“The current crisis is not the result of a short-term cause. A crisis of this depth and scope has been years in the making,” said Ian McDermott, CEO of Peabody Housing Association. “I think it’s probably going to get worse in the short term.”