Government to fall 32,000 affordable homes short of target

The government will fall short of its target to build 180,000 new homes through the 2021-2026 Affordable Homes Programme, a report from MPs released today has said. 

Current forecasts indicate 157,000 new homes will be built in England under the programme - 23,000 less than the target, the Public Accounts Committee (PAC) highlighted. 

But between the 2016 and 2021 programmes the number of homes delivered are expected to fall short by just under 32,000 homes. Under the 2016 programme, the government forecasts housing providers will build 241,000 new homes, against a target of 250,000 - 9,000 less. 

The government has estimated it will spend £20.7bn in total on affordable homes between 2015 and 2032. 

The PAC pointed out there are “significant risks” ahead for the housing sector, such as cost inflation and labour shortages, of “which the department does not seem to have a grasp”, that “could mean housing providers build fewer homes than forecast”. 

Only 5% to 7.5% of homes are set to be built in rural communities compared to a target of 10%. The pandemic and demand for homes in the countryside has made worse the lack of affordable properties in these areas. 

The PAC also recommends the department work with local authorities to ensure that homes are built in areas of greater need. 

“There is a mismatch between where housing providers build compared to areas of highest need,” the Affordable Homes Programme report explained. 

The Department for Levelling Up Housing and Communities (DLUHC) yesterday rowed back on its commitment to mandatory local housing targets saying they would be ‘a starting point’ instead.This was in the face of a backbench campaign to scrap housing targets altogether, led by MP Theresa Villiers.  

The group of MPs also said that the “number of homes being built for social rent is not enough to meet demand”. The government’s target for homes for social rent under the 2021 programme is “just” 33,550, they said, and suggested: “The department should assess how much demand there is for social rent and set out how it will use the programme to better meet this”.  

The PAC said DLUHC should report annually to parliament on the performance of the programme and set out the impact of including net-zero requirements in the next iteration. 

DLUHC had not set any standards around net-zero for the programme and new homes “may need expensive retrofitting to meet net-zero standards”, the committee said.

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Through the 2015 and 2016 programmes the government has estimated it will provide 206,000 new grant-funded homes. It expects to build 363,000 affordable homes between 2015 and 2032.  

Meg Hillier, chair of the committee, said: “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.”