The number of affordable homes built in Britain last year was up by 22%, but critics say it still isn’t nearly enough to satisfy the need.
Figures from Homes England show the highest number of starts for nine years and the highest number of completions for four years.
A total of 57,485 were created during the 2018/19 survey period and 92% were new build. The remainder came from the acquisition of existing properties.
Two thirds of the new properties were built for rent, down from the 78% total of 2014/15.
Publishing its annual report, Homes England said the figure showed ‘a significant increase’ in the number of affordable homes being created in England.
Chief Executive Nick Walkley said: “At a time where the average house costs around eight times the average income, these are positive signs that the delivery of homes, and particularly affordable homes, is on the up.
Huge amount of work
“However, there is still a huge amount of work to do to make sure this trend continues.
We’re just getting started and need the sector to join us in our mission to make sure we continue to deliver homes across the country for the people who need them the most.”
Housing Minister Kit Malthouse commented: “It’s great to see our housing accelerator has their foot firmly on the gas with nearly 29,000 new affordable homes finished last year.
“Getting these properties built is all part of our cast-iron commitment to making sure everyone has the opportunity to realise the dream of a stable home.
“But there is more to do, and so this Government is providing serious support, including £44 billion of funding and guarantees, to build more, better, faster.”
Anywhere near enough
But Clive Docwra, managing director of McBains property and consulting firm, said the number of new homes wasn’t anywhere near enough to meet the demand.
He said: “Today’s figures will no doubt be seen in some quarters as a progression in that more affordable homes are being built.
But the fact is that around three million homes need to be built in the next two decades to meet the housing crisis.
“The government has singularly failed to build anywhere near enough homes.
Failing to deliver
“We need to see the major parties make strong policy commitments to boost the housebuilding programme, which is failing to deliver the number of homes required to meet the housing shortage.
“The parties need to look at new funding models as currently there is little incentive for large developers to build affordable homes.”
He suggested that a new government policy, allowing pension funds to be invested in building affordable housing could be the answer.
It could be run by housing associations and used to help smaller building firms using modern methods of construction.
“We clearly need to think radically as otherwise we will continue to fail to make inroads into the amount of affordable homes required to meet demand,” he added.
Legal & General
Insurance and pensions firm Legal & General is already following Mr Docwra’s suggestion, announcing it is to team up with 14 housing associations across the country to build 3,000 new affordable homes a year by 2022.
Two projects – in Croydon and Falmouth – have already been completed with 60% being offered as shared ownership and the others at affordable rents.
New schemes are planned for Worcestershire, Warwickshire, Leicestershire, Hertfordshire and Central Bedfordshire.
Spokesman Ben Denton said: “We are bringing much-needed pension fund capital into the housing sector.
There is an urgent need to keep innovating in this sector and to provide quality, stable homes for the 1.1 million households on waiting lists in England.”
3 million a year needed
In January a cross-party committee of MPs suggested 3 million new affordable homes need to be built over the next 20 years – more than were built in the 20 years following World War 2.
To try to hit the target Legal and General have set up a modular house building factory in Leeds which is already turning out hundreds of pre-fabricated homes a year and delivering them to sites as ‘turn key’ homes.
Prices to rise by 15%
In a separate report lettings agent Savills has predicted a 15% increase in house prices across the country over the next five years.
It suggests prices will rise by just 0.5% this year, but by 1% in 2020, 4.5% in 2021 and by 3% in 2022, 2023 and 2024.