Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 9
9
Paragraph: 67
The cross-subsidy model has reached its limit.
Conclusion
The cross-subsidy model has reached its limit. Without grant funding from central Government, providers will be vulnerable to the economic impact of COVID-19. Housing associations have commendably made up for reduced Government grant investment in the last decade by developing homes for sale and investing these proceeds, but the subsidy gap remains high for social rent. The Government believes housing associations can continue to financially innovate to build more homes, despite registered providers telling Ministers they have reached the limit of their flexibility. If the Government does not increase grant funding, social rent housebuilding will not increase and may drop even further.
Paragraph Reference:
67
Government Response
Acknowledged
HM Government
Acknowledged
We have supported the delivery of over 486,600 new affordable homes since 2010 despite fiscal constraints and we are determined to do more, which is why we have extended the existing Affordable Homes Programme by one year. This will save homes that would otherwise have been lost following site closures due to Covid-19. While we do not place a specific figure on the number of affordable houses which need to be built every year, we are committed not only to increasing the supply of new affordable homes, but ensuring that we build the right homes in the right places. In 2018-19 241,130 net addition homes were delivered, and the supply of new affordable housing makes a significant contribution (almost 24% for 2018-19) to overall housing supply in England. This is why we have launched the new £11.5bn Affordable Homes Programme which will run from 2021/22 to 2025/26, to deliver up to 180,000 affordable homes, a minority of which will be supported through long-term investment and delivered up to 2028/29. The NPPF is also clear that local authorities should identify the size, type and tenure of housing needed for different groups in the community, including those who require affordable housing, and reflect this in planning policies.