The National Housing Federation has said that the amount of new money – under expected budget cuts of 50% – will be so low, that ministers may only be able to fund a handful of additional new homes.
Federation chief executive David Orr said: “The impact of the expected cuts to the housing budget will bring the building of affordable housing effectively grinding to a halt over the course of this Parliament.”
The Federation said that massive damage would be visited upon the local economy with 156,000 jobs being axed by 2020, and £32bn worth of economic activity being lost. It also fears a double dip recession.
Last year, around 30,000 new affordable homes were delivered in London and the South East. However, the Federation’s findings have blown a hole in housing minister Grant Shapps pledge to deliver more homes than New Labour.
On 13 September, the minister told the CLG select committee: “Building more homes is the gold standard upon which we shall be judged. The idea is to get a system which delivers housing in this country.’
However, the extent of the cuts means that the government will barely be able to build any homes in London and South East in addition to the 12,700 planned.
Orr said: “Grant Shapps said that building more homes would be the gold standard for the new government, but if he is only going to be able to deliver 243 new affordable homes in London and the South East this standard will prove to be made out of base metal.”
The Federation has revealed that funding has fallen short by £100m and over 1,100 already allocated homes have been axed.
Orr added: “The slump in affordable housebuilding in London and the South East will not only be bad news for millions of people on waiting lists in the region, but it will be a hammer blow to the regional economy – which would be the powerhouse of any expected economic recovery.”
Watch David Orr discuss the cuts on Channel 4 News
