The Government has made much of its commitment to the idea of affordable housing. Indeed, it has become something of a mantra.
Developers, however, do not always share ministers’ enthusiasm. Affordability for customers comes at a cost – usually to the housebuilder’s bottom line. If profits cannot be maximised, better to mothball sites previously acquired until conditions improve.
This creates a dilemma for the Government since a strong and active building industry is good for growth. It is also true that Britain needs more homes of various sorts – not only those earmarked for rent or sale at below market levels. Nevertheless, with the recovery of the property market continuing apace – average UK house prices are up more than nine per cent year on year – a growing number of people are finding that the property ladder is more a greasy pole. Consequently, the need for affordable housing becomes ever more acute.
In this context, it is dismaying that fewer than 43,000 such homes were constructed in 2012-13, some distance short of the Government’s annual target for the years 2015 to 2018 of 55,000. One reason for the shortfall is that, in resolving the dilemma between stimulating growth and promoting affordable housing schemes, the Government has placed too much emphasis on the former imperative. Statutory changes last year gave builders more power to challenge quotas for affordable housing, by arguing that a project’s economic viability would be undermined. The Independent has learnt that 11 such appeals are currently pending.
When the Government announced its plans to legislate in 2012, Eric Pickles, the Local Government Secretary, argued that changes were necessary to prevent local authorities living in “a kind of economic la la land”. In this debatable narrative, the shortfall in new housing stock was the fault not of poor developers but of stick-in-the-mud planners. Yet the people who are disadvantaged by the push for wider economic growth are those who, at the micro level, most need government help. As it is, their dreams of one day having a pile of their own seem increasingly likely to be shattered.