{"id":99891,"date":"2024-12-18T09:48:46","date_gmt":"2024-12-18T09:48:46","guid":{"rendered":"https:\/\/en.econostrum.info\/?p=99891"},"modified":"2024-12-18T09:48:49","modified_gmt":"2024-12-18T09:48:49","slug":"17400-affordable-homes-delayed-rising-costs","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/17400-affordable-homes-delayed-rising-costs\/","title":{"rendered":"17,400 Affordable Homes Delayed : Rising Costs and Funding Gaps Put UK Housing Targets at Risk"},"content":{"rendered":"\n<p>The delivery of <strong>17,400 affordable homes<\/strong> in <strong>England and Wales<\/strong> has been delayed as <strong>housing associations<\/strong> face significant <strong>financial shortfalls<\/strong>. A survey conducted by the <strong>Home Builders Federation (HBF)<\/strong> highlights a growing <strong>bottleneck<\/strong>, with <strong>139 construction sites<\/strong> stalled and the government\u2019s target of <strong>1.5 million homes<\/strong> increasingly at risk.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Section 106 Agreements and Financial Constraints<\/h2>\n\n\n\n<p>Under <strong>Section 106 agreements<\/strong>, <strong>private developers<\/strong> must allocate a portion of new housing developments to <strong>affordable homes<\/strong>. This mechanism accounted for <strong>44%<\/strong> of the <strong>62,000 affordable homes<\/strong> completed last year.<\/p>\n\n\n\n<p>In the past <strong>12 months<\/strong>, housing associations have faced substantial <strong>financial pressures<\/strong> :<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>\u00a36 billion<\/strong> is required for <strong>post-Grenfell safety upgrades<\/strong>.<\/li>\n\n\n\n<li>Millions are being invested to meet <strong>enhanced social housing standards<\/strong>.<\/li>\n\n\n\n<li><strong>Rent caps<\/strong> below inflation have squeezed <strong>revenues<\/strong>, limiting <strong>financial flexibility<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>These challenges have forced housing associations to prioritise the <strong>safety<\/strong> and <strong>efficiency<\/strong> of existing properties over acquiring new stock.<\/p>\n\n\n\n<p>Kate Henderson, Chief Executive of the <strong>National Housing Federation (NHF)<\/strong>, noted : <em>\u201cA lack of financial capacity has led many housing associations deciding that buying homes delivered through Section 106 is not a viable option compared to, for example, grant-funded homes.\u201d<\/em> Many homes under <strong>Section 106 agreements<\/strong> are reportedly <strong>too expensive<\/strong> or fail to meet <strong>quality expectations<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Delays Affecting Housebuilders and Government Targets<\/h2>\n\n\n\n<p>The inability to sell <strong>affordable homes<\/strong> has disrupted <strong>private housebuilders<\/strong>, leading to delays in developments with secured <strong>planning permissions<\/strong>.<\/p>\n\n\n\n<p><strong>Neil Jefferson<\/strong>, Chief Executive of the <strong><a href=\"https:\/\/www.hbf.co.uk\/people\/neil-jefferson\/#:~:text=Neil%20Jefferson%20is%20Chief%20Executive,a%20founding%20director%20in%202021.\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/www.hbf.co.uk\/people\/neil-jefferson\/#:~:text=Neil%20Jefferson%20is%20Chief%20Executive,a%20founding%20director%20in%202021.\" rel=\"noreferrer noopener\">HBF<\/a><\/strong>, stated: <em>\u201cSmall development sites are being prevented from starting and larger sites are being paused.\u201d<\/em><\/p>\n\n\n\n<p>The delays put <a href=\"http:\/\/the Labour government\" target=\"_blank\" rel=\"noreferrer noopener\">the <strong>Labour government<\/strong><\/a><strong>\u2019s 1.5 million homes<\/strong> pledge at risk. Deputy Prime Minister <strong>Angela Rayner<\/strong> previously described the plan as <em>\u201cthe biggest boost to social and affordable housing in a generation.\u201d<\/em> However, mounting <strong>financial constraints<\/strong> threaten its success.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Section 106 Clearing Service Introduced<\/h2>\n\n\n\n<p>In response, <strong>Homes England<\/strong>, the government\u2019s <strong>housing delivery agency<\/strong>, has launched a <strong><a href=\"https:\/\/www.gov.uk\/government\/collections\/the-section-106-affordable-housing-clearing-service#:~:text=Homes%20England%20has%20launched%20the,responsibility%20for%20affordable%20housing%20delivery).\" target=\"_blank\" rel=\"noreferrer noopener\">Section 106 clearing service<\/a><\/strong>. The platform allows developers to advertise <strong>unsold affordable homes<\/strong>, offering housing associations and other providers an opportunity to step in.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.gov.uk\/government\/organisations\/ministry-of-housing-communities-local-government\" data-type=\"link\" data-id=\"https:\/\/www.gov.uk\/government\/organisations\/ministry-of-housing-communities-local-government\" target=\"_blank\" rel=\"noopener\">A <strong>Ministry of Housing, Communities and Local Government<\/strong><\/a> spokesperson said: <em>\u201cWe know developers have reportedly faced issues selling Section 106 affordable housing, and this government has taken decisive action to fix this.\u201d<\/em><\/p>\n\n\n\n<p>The <strong>clearing service<\/strong> is part of wider <strong>reforms<\/strong> aimed at accelerating <strong>housing delivery<\/strong> and streamlining the <strong>planning system<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Calls for Additional Solutions<\/h2>\n\n\n\n<p>While the <strong>Section 106 clearing service<\/strong> provides temporary relief, industry leaders have called for further <strong>government intervention<\/strong>. The <strong>HBF<\/strong> proposes that housing associations be permitted to use <strong>state grants<\/strong> to purchase <strong>Section 106 homes<\/strong>, rather than restricting funding to homes they construct themselves.<\/p>\n\n\n\n<p>Andy Wilford, Head of Land and Planning at <strong>Esquire Developments<\/strong>, said: <em>\u201cIt is a problem that is affecting \u2018oven-ready\u2019 sites and those that have already managed to navigate the complicated planning process.\u201d<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Rising Costs and Resource Demands<\/h2>\n\n\n\n<p>The sector also faces rising <strong>construction costs<\/strong>, driven by increasing <strong>material<\/strong> and <strong>labour expenses<\/strong>. <a href=\"https:\/\/en.econostrum.info\/affordable-housing-construction-london-standstill\/\" data-type=\"post\" data-id=\"1163\">Housing associations<\/a> must balance these challenges while addressing simultaneous demands to :<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Deliver <strong>energy-efficient homes<\/strong> to meet <strong>net-zero targets<\/strong>.<\/li>\n\n\n\n<li>Comply with updated <strong>post-Grenfell safety regulations<\/strong>.<\/li>\n\n\n\n<li>Improve existing housing conditions following cases such as the death of <strong>Awaab Ishak<\/strong> in 2020 due to prolonged <strong>mould exposure<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>These pressures have strained <strong>resources<\/strong>, forcing associations to prioritise <strong>repairs<\/strong> and <strong>safety<\/strong> over <a href=\"https:\/\/en.econostrum.info\/uk-households-636-new-cost-of-living-payments\/\" target=\"_blank\" data-type=\"post\" data-id=\"10406\" rel=\"noreferrer noopener\">acquiring new homes<\/a>.<\/p>\n\n\n\n<p>The delay of <strong>17,400 affordable homes<\/strong> in England and Wales highlights the significant financial pressures facing <strong>housing associations<\/strong>, compounded by rising <strong>construction costs<\/strong>, safety upgrade requirements, and rent revenue constraints. <\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The delay of 17,400 affordable homes and 139 stalled sites highlights the financial strain on housing associations, putting government housing targets at risk.<\/p>\n","protected":false},"author":9,"featured_media":99950,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-99891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/99891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/comments?post=99891"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/99891\/revisions"}],"predecessor-version":[{"id":99979,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/99891\/revisions\/99979"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/media\/99950"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/media?parent=99891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/categories?post=99891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/tags?post=99891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}