The National Housing Federation spoke out yesterday, saying just 240 new homes will be built in London and the south East to 2015, down from 30,000 last year if new build funding is not protected in the spending cuts tomorrow.
Federation chief executive David Orr said the cuts will mean 156,000 jobs axed by 2020 and the loss of £32bn of economic activity.
It added the findings have also blown a hole in housing minister Grant Shapps pledge to deliver more homes than New Labour.
Jonathan Moore, director of easyroommate.co.uk, said: “Thousands of frustrated first-time buyers are already being kept out in the cold by tight lending criteria and unaffordably high house prices. Cutting the budget for social housing will close off another avenue for those who are unable to get onto the housing ladder and want a home of their own.”
Moore added many unable to buy have already chosen to flat share as a cheaper alternative, with the numbers doing so surging by nearly 60,000 in the last three years.
“With affordable housing likely to take a colossal hit in the wake of the cut, the growth of the flat sharing population is set to continue as would be social tenants look to find the most affordable place to live.”
David Brown, commercial director of LSL Property Services, said: “The proposed cut to the social housing budget is another nail in the coffin for the government’s ability to provide affordable housing for those who need it most.”
He continued that the government is relying heavily on an expanding private rental sector to fill the shortfall, but cautioned lack of buy-to-let funding remains a major obstacle.
“More affordable – and achievable – products must be made available to professional investors for the sector to grow,” he said.
