The Government has committed to build 275,000 affordable homes over the next Parliament. This is great news and is something we fully support because it will help more people to live in a home that they can afford.
The large majority of affordable homes – about 75% – are funded through the Affordable Homes Programme. The Government has said it will invest £4.5 billion over the five years in England and £1.25 billion in London over the next three years through the programme. It’s probably the quickest way that the Government can get homes built, as it doesn’t rely on private sector reforms.
Encouragingly, figures out today show buds forming, with 59,226 Affordable homes built in 2014-15: a 63% increase on just a year ago.
If we keep this up the Government is going to surpass its target by 20,000 homes.
Source: Table 1012: Affordable Housing Starts and Completions funded by the Homes and Communities Agency and the Greater London Authority
However, it already looks like this might be a premature celebration with the homes starting to be built going back to previous levels, which will likely materialise in smaller levels of completions in a couple of years.
It also looks like the number of secure and affordable homes is not what has driven these increases. A whopping 69% of these homes built are for ‘Affordable Rent’. This regime introduced a new type of home with rents charged at up to 80% of market rents and less secure tenancies than social tenants get. This increase in Affordable Rented homes has been met with a decline in Social Rented homes which offer longer tenancies and lower rents than their ‘Affordable’ equivalent.
Source: Table 1012: Affordable Housing Starts and Completions funded by the Homes and Communities Agency and the Greater London Authority
Nevertheless, these homes are still providing important housing for those on lower incomes who otherwise wouldn’t be able to afford their rent and this fund is vital to getting these homes built. If they’re going to deliver on their promise of 275,000 affordable homes, the Government will need to continue and even expand funding for the Affordable Homes Programme.
