26.03.2024
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The UK is in a housing crisis with a particular acute lack of affordable housing. Demand and need for affordable housing is far outstripping supply. Failing to provide affordable housing leads to far reaching implications for individuals, communities and society as a whole with issues including, homelessness, social inequality, and health (both mental and physical) to name but a few. But tackling the issues is complex and there is no silver bullet to solve the crisis. Below Matthew Woodhead explores the issues facing the sector.
In the last few years we have seen a real issue in the south east in finding Registered Providers (RP’s) to deliver small site Section 106 affordable housing. This is primarily due to the limited capacity of most RPs, who need to concentrate on delivering sites larger numbers of affordable (in order to hit internal targets), coupled with the difficulty of managing smaller numbers in remote locations. Most RPs have a minimum threshold of 20 homes, with the larger RPs not interested in delivering less than 100 homes.
However, the problem of finding a housing association to deliver the affordable homes has now moved to the larger sites too. Below we look into some of the issues facing the affordable housing sector and RP’s in particular.
The issues around delivery of affordable housing, whilst often interrelated, are not easily fixed. Funding is key, be it grant or subsidies from central government, with interest rates, inflation and rent caps at the heart of a great amount of the difficulties.
We asked Brian Horton the Strategic Housing Advisor to the South East Housing and Development Group (SE HDG) and prominent Housing Enthusiast (self titled) his ask of Government to respond to this threat to affordable housing delivery:
“The long-term solution is to fix the RP’s broken balance sheets and invest in Local Authority capacity, but in the short term the SE HDG wants DLUHC to permit the use of Homes England grant on S106 affordable housing homes, to respond to the current Market Failure.
We propose that grant should be made available on the affordable housing provision required by S106 requirements on all schemes <75 homes, this will give confidence to SMEs working with Registered Providers to build out early, thereby accelerating site delivery and responding to developer concerns on absorption rates.
The grant could be time-limited to the current programme and available to both Strategic Partners and bids via continuous market engagement and funded through the existing Affordable Housing Programme. Without such support, a significant proportion of potential affordable housing supply will be delayed or simply not built.
We also propose that on larger sites if developers are overperforming by >30% on the S106 affordable housing requirement that Homes England grant should be available on all the affordable homes including the S106 requirements and additionality. This we believe will improve the viability and again provide the impetus for the accelerated delivery of otherwise stalled or viability-constrained developments, negating the all-to-regular reduction or removal of affordable housing or other essential local infrastructure from these developments.”
At DHA we host an Affordable Housing Roundtable (currently organising RT11) to discuss and find solutions to delivery. This is attended by over 90 cross industry experts in housing, including Homes England, DLUHC, RP’s, Housing Officers, planners, housebuilders and SME developers, and chaired by Brian.
Please contact Matthew Woodhead for any queries in this regard.
DHA also has an extensive network of contacts and buying requirements in the RP sector and can assist developers in designing and placing affordable homes, where required. Please get in touch with Mark Presland should you have any enquiries in this regard.
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