Government to miss affordable homes building targets by 32,000

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The Government is unlikely to meet its housebuilding targets, falling short by 32,000 homes from its original 2016 and 2021 goals for affordable homes, MPs have said.

The Public Accounts Committee also criticised that not enough socially-rented homes are being constructed to help ease the national housing crisis.

The committee’s report, published on Wednesday, will add to pressure on prime minister Rishi Sunak after he was criticised for watering down housebuilding targets to see off a Tory rebellion.

The change to the Levelling up and Regeneration Bill would make the target of building 300,000 homes a year in England advisory rather than mandatory, with councils able to build fewer if they prove the density would “significantly change the character” of their area.

MPs on the committee noted that there is no formal target for how many of the 300,000 overall new homes a year – a goal set out in the 2019 Conservative manifesto – should be affordable, with Treasury funding influencing the plans.

The Department for Levelling Up, Housing and Communities (DLUHC) will deliver just 157,000 new homes against its forecast of up to 180,000 under the 2021 Affordable Homes Programme, according to the report.

The committee said the department does not appear to “grasp” that construction cost inflation and labour shortages could mean housing providers do not even reach the lower number.

DLUHC is also set to miss aims to place 10% of new-builds in rural areas and deliver 10% as supported homes.

Added to the shortfall under the 2016 programme, DLUHC will deliver 32,000 fewer homes than planned.

The committee also said it was “concerned” that not enough homes are being built for social rent – affordable housing usually owned by local authorities or housing associations with rents set by a national rent formula.

Only half of the affordable homes in the 2021 programme are intended for rent rather than ownership despite a huge demand, according to MPs.

Committee chair Dame Meg Hillier said: “The Government knows affordable rented homes offer the best value for money.

“Many people in high-cost areas simply can’t afford to rent privately or buy their own home and there’s a desperate need for affordable, secure rented homes. But amid all the building targets there isn’t one for affordable or socially rented homes.

“Local authorities know where and what homes must be built to address the national housing crisis but don’t have the power to act.

“The human cost of inaction is already affecting thousands of households and now the building programme is hitting the challenges of increased building costs.

“This does not augur well for ‘generation rent’ or those in desperate need of genuinely affordable homes.”

There is a mismatch between where housing providers build affordable homes compared to areas of highest need, the Public Accounts Committee said as it urged DLUHC to work with local authorities to identify the type of developments needed.

MPs also criticised a “lack of foresight” in failing to set any net-zero standards when establishing the 2021 Affordable Homes Programme, meaning buildings now under construction could need expensive retrofitting in the future to comply.

A DLUHC spokesperson said: “The Secretary of State agrees with the committee that we must build more homes for social rent.

“Increasing the number of genuinely affordable homes is central to our levelling up mission and we’re investing £11.5 billion to build more of the affordable, quality homes this country needs.

“Before the pandemic we had reached the highest rate of housebuilding in 30 years and since 2010 we have built more than 630,000 affordable homes in England, including 162,000 for social rent. But there is much more to do and we look forward to working with the committee on their recommendations.”