Government agency hits 86% of completions target

Homes England has missed its delivery targets for the second consecutive year, citing last year’s “deteriorating” economic conditions.

The agency, in its annual accounts for the 2022/23 financial year, funded or supported the development of 33,713  homes completed in the 2022/23 financial year


This meant the agency, which administers programmes including the £11.5bn affordable homes programme, delivered 86% of its main target for completions of 39,008 homes. This year’s figure was also down on the 37,632 figure recorded the previous year.

It missed its target for homes started by 30%, with work beginning on 37,175 homes against a target of 52,967.

Homes England said the drop came despite the fact it had initially had a “pipeline of delivery opportunities to over-deliver against our targets by 10% to 25%.”

It said economic headwinds last year impacted its delivery performance.

It said: “With the public money we deploy typically directed to projects at the margin of viability, the deteriorating conditions had a magnified impact on our performance.”

Homes England said 72% of the shortfall in completions and 71% of the shortfall in starts was due to a slowdown in delivery through its affordable housing programmes.

It said affordable housing providers were facing a “perfect storm” of issues which “engulfed” development plans.

It said: “The affordable housing sector faced significant challenges in the early part of the financial year.

“Build cost inflation, rising labour costs, material availability, building remediation issues and the duty to support tenants through a cost-of-living crisis hindered investment in new homes. Relative to volume developers, housing associations were faced with greater viability challenges due to their fixed funding model and inability to pass on cost increases to the end consumer.” It said providers felt constrained by the uncertainty around a proposed cap to rents, which eventually came in as a 7% limit for the 2023/24 financial year.

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Homes England said associations reported difficult relations with contractors “with firms requesting fluctuation clauses, re-negotiation of fixed price contracts and in some instances withdrawing from negotiations totally.” It said this eroded contingency plans built into the affordable homes programme.

Homes England also said it completed just 40% of the homes it intended to deliver through activity to unlock housing capacity linked to infrastructure projects.

It said the agency’s ‘unlocking of housing capacity’ is heavily reliant on a small number of large-scale infrastructure projects.

It said: “The inherent uncertainties facing infrastructure projects have been exacerbated by elevated levels of inflation, supply chain issues and local authority capacity constraints.”

Homes England also said it supported 27,534 households into home ownership in the year against a target of 39,632. It said the additional eligibility criteria through the later version of the Help to Buy scheme along with increasing mortgage rates following September’s mini-budget had an impact.

The government is calling on housebuilders, housing associations and councils to contribute evidence as part of a routine review of whether Homes England is “delivering for the taxpayer.”

In May, Homes England published its new five-year strategic plan, under which it will shift away from a “purist” focus on housing supply towards regeneration, with performance judged by a much wider range of metrics including social value per pound of investment.