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Budget cuts could mean 574,000 homes will not be built

20 Apr 10 Cuts to the housing budget could mean that 574,000 homes planned for construction during this decade will not be built.

Cuts to the housing budget could mean that 574,000 homes planned for construction during this decade will not be built.

The National Housing Federation and Home Builders Federation, the trade bodies for housing associations and private developers, fear that cuts of 25% to the housing budget - as implied in the Budget - will have dire consequences for affordable housing provision.

The organisations have calculated that cuts on this scale would mean:

  • 574,000 planned affordable homes may not be built in the period up to 2020.
  • 287,000 jobs in construction and related fields could be lost or not be created.
  • The Government target to build 1m affordable homes, and 3m homes overall by 2020, could be missed by 20 years.
  • 1.4m people may be added to housing waiting lists, which are already at record levels.

Given the devastating impact big cuts in spending would have on affordable house-building, the NHF and HBF say that housing should be viewed in the same ‘untouchable’ terms as health and education by the political parties, and protected from cuts.

The Government made an ambitious pledge in 2007 to build one million affordable homes by 2020 to accommodate the record numbers of people stuck on waiting lists.

Around 162,000 of the targeted affordable homes will have been built by April 2011. But if cuts of 25% were implemented to the housing budget over the next decade it would mean, the NHF estimates, that only 426,000 of the targeted 1m affordable homes would be built – leaving a shortfall of 574,000.

If the reduced rate of building continued in the long term, it would take the Government until 2040 to build the envisaged 1m affordable homes – 20 years later than expected.

NHF chief executive David Orr said: "Unless all three main parties commit to protecting the housing budget after the election, we could see affordable housebuilding falling off a cliff – with almost 600,000 planned affordable homes not being built.

"The Government believes that we need around 240,000 new homes every year. But if the housing budget is cut by 25% the number of new homes being built annually could plummet to just 100,000 homes for the foreseeable future."

Stewart Baseley, executive ehairman of the HBF said. "We already have a chronic shortage of housing in this country that is having significant social and economic implications. It is imperative that public spending to support affordable house building is maintained post election if the crisis is not to plunge to new depths."

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