Government to miss affordable homes target by tens of thousands

The Government will miss its affordable house building target by tens of thousands of homes, according to a report published days after the Prime Minister backed down on planning reforms.

It is expected to deliver 32,000 fewer homes than it promised in its 2016 and 2021 affordable house building programmes, according to the Public Accounts Committee, a group of MPs that monitors government spending.

This comes after Prime Minister Rishi Sunak caved in to pressure from Conservative MPs to make annual targets for councils to develop 300,000 new homes a year “advisory” rather than compulsory. The Government agreed to water down proposals after backbench MPs threatened to vote against the Levelling Up and Regeneration Bill. Michael Gove, the Levelling Up Secretary, has agreed to amend the bill to allow fewer homes if councils show that hitting the target would change the character of an area.

The affordable house building programme overlaps with the 300,000 annual target. The Department for Levelling Up, Housing and Communities (DLUHC) has already downgraded its 2021 plans – due by March 2029 – saying it would deliver just 157,000 new affordable homes against the target of 180,000. But the department may even struggle to reach this new lower target, the PAC said, as it “does not seem to have a grasp” on risks such as construction cost inflation and labour shortages.

The PAC added that the DLUHC is on track to miss its targets to deliver 10pc of homes in rural communities. Affordable homes can be built in many types, such as shared ownership, social rent and within an affordable home ownership scheme.

The PAC report also criticised the Government for not building enough rental homes, which it described as “the only real affordable option for many people”. Tenant demand shot up 23pc year-on-year in October, according to property website Rightmove, yet the number of small rental homes is down 4pc.

Rents are increasing at the fastest rate since records began, up 3.8pc in the 12 months to October, according to the Office for National Statistics.

The DLUHC has a target of just 33,550 homes for social rent under the 2021 programme which the PAC said will not meet demand.

Dame Meg Hillier MP, chairman of the PAC, said: “Many people in high-cost areas simply can’t afford to rent privately or buy their own home and there’s a desperate need for affordable, secure rented homes.

“Local authorities know where and what homes must be built to address the national housing crisis but don’t have the power to act.

“The human cost of inaction is already affecting thousands of households and now the building programme is hitting the challenges of increased building costs. This does not augur well for ‘generation rent’ or those in desperate need of genuinely affordable homes.”

A DLUHC spokesperson said: “Increasing the number of affordable homes is central to our levelling up mission and we’re investing £11.5 billion to build more of the affordable, quality homes this country needs.

“Before the pandemic we had reached the highest rate of housebuilding in 30 years and since 2010 we have built more than 630,000 affordable homes in England, including 162,000 for social rent.”