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
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
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
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
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
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
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
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