The delivery of 17,400 affordable homes<\/strong> in England and Wales<\/strong> has been delayed as housing associations<\/strong> face significant financial shortfalls<\/strong>. A survey conducted by the Home Builders Federation (HBF)<\/strong> highlights a growing bottleneck<\/strong>, with 139 construction sites<\/strong> stalled and the government\u2019s target of 1.5 million homes<\/strong> increasingly at risk.<\/p>\n\n\n\n

Section 106 Agreements and Financial Constraints<\/h2>\n\n\n\n

Under Section 106 agreements<\/strong>, private developers<\/strong> must allocate a portion of new housing developments to affordable homes<\/strong>. This mechanism accounted for 44%<\/strong> of the 62,000 affordable homes<\/strong> completed last year.<\/p>\n\n\n\n

In the past 12 months<\/strong>, housing associations have faced substantial financial pressures<\/strong> :<\/p>\n\n\n\n

\n
• \u00a36 billion<\/strong> is required for post-Grenfell safety upgrades<\/strong>.<\/li>\n\n\n\n
• Millions are being invested to meet enhanced social housing standards<\/strong>.<\/li>\n\n\n\n
• Rent caps<\/strong> below inflation have squeezed revenues<\/strong>, limiting financial flexibility<\/strong>.<\/li>\n<\/ul>\n\n\n\n

  These challenges have forced housing associations to prioritise the safety<\/strong> and efficiency<\/strong> of existing properties over acquiring new stock.<\/p>\n\n\n\n

  Kate Henderson, Chief Executive of the National Housing Federation (NHF)<\/strong>, noted : \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 Section 106 agreements<\/strong> are reportedly too expensive<\/strong> or fail to meet quality expectations<\/strong>.<\/p>\n\n\n\n

  Delays Affecting Housebuilders and Government Targets<\/h2>\n\n\n\n

  The inability to sell affordable homes<\/strong> has disrupted private housebuilders<\/strong>, leading to delays in developments with secured planning permissions<\/strong>.<\/p>\n\n\n\n

  Neil Jefferson<\/strong>, Chief Executive of the HBF<\/a><\/strong>, stated: \u201cSmall development sites are being prevented from starting and larger sites are being paused.\u201d<\/em><\/p>\n\n\n\n

  The delays put the Labour government<\/strong><\/a>\u2019s 1.5 million homes<\/strong> pledge at risk. Deputy Prime Minister Angela Rayner<\/strong> previously described the plan as \u201cthe biggest boost to social and affordable housing in a generation.\u201d<\/em> However, mounting financial constraints<\/strong> threaten its success.<\/p>\n\n\n\n

  Section 106 Clearing Service Introduced<\/h2>\n\n\n\n

  In response, Homes England<\/strong>, the government\u2019s housing delivery agency<\/strong>, has launched a Section 106 clearing service<\/a><\/strong>. The platform allows developers to advertise unsold affordable homes<\/strong>, offering housing associations and other providers an opportunity to step in.<\/p>\n\n\n\n

  A Ministry of Housing, Communities and Local Government<\/strong><\/a> spokesperson said: \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

  The clearing service<\/strong> is part of wider reforms<\/strong> aimed at accelerating housing delivery<\/strong> and streamlining the planning system<\/strong>.<\/p>\n\n\n\n

  Calls for Additional Solutions<\/h2>\n\n\n\n

  While the Section 106 clearing service<\/strong> provides temporary relief, industry leaders have called for further government intervention<\/strong>. The HBF<\/strong> proposes that housing associations be permitted to use state grants<\/strong> to purchase Section 106 homes<\/strong>, rather than restricting funding to homes they construct themselves.<\/p>\n\n\n\n

  Andy Wilford, Head of Land and Planning at Esquire Developments<\/strong>, said: \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

  Rising Costs and Resource Demands<\/h2>\n\n\n\n

  The sector also faces rising construction costs<\/strong>, driven by increasing material<\/strong> and labour expenses<\/strong>. Housing associations<\/a> must balance these challenges while addressing simultaneous demands to :<\/p>\n\n\n\n

  \n
  • Deliver energy-efficient homes<\/strong> to meet net-zero targets<\/strong>.<\/li>\n\n\n\n
  • Comply with updated post-Grenfell safety regulations<\/strong>.<\/li>\n\n\n\n
  • Improve existing housing conditions following cases such as the death of Awaab Ishak<\/strong> in 2020 due to prolonged mould exposure<\/strong>.<\/li>\n<\/ul>\n\n\n\n

    The delay of 17,400 affordable homes<\/strong> in England and Wales highlights the significant financial pressures facing housing associations<\/strong>, compounded by rising construction costs<\/strong>, safety upgrade requirements, and rent revenue constraints. <\/p>\n\n\n\n

    <\/p>\n","protected":false},"excerpt":{"rendered":"

    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}]}}

    These pressures have strained resources<\/strong>, forcing associations to prioritise repairs<\/strong> and safety<\/strong> over acquiring new homes<\/a>.<\/p>\n\n\n\n