Devolution of both funding and decision-making is required to halt the slowdown in housebuilding, Savills has warned.
Construction starts in the alternative sector (predominantly affordable housing) are down by just over a third in the 12 months to September 2024.
Savills added that planning authorities and mayoral authorities should have greater power to decide whether affordable homes should be offered for rent or for ownership, and at what level of discount.
The real estate firm also called for confirmation of a long term rent settlement, which would provide Housing Associations with greater certainty around future rental income. There is both the need and capacity to increase general needs rents at CPI +1% over the next 10 years, whilst maintaining a discount to private rents.
Steve Partridge, head of Savills affordable housing consultancy, said: “Unmet affordable housing needs are enormous, and they vary between and within regions. Future housing policy should be sufficiently flexible to recognise regional variations with grant funding directed towards supporting new homes that will have the biggest impact on people’s housing challenges.
“Affordable homes of all tenures are required if we are to build the homes people need and solve the housing crisis. This is important to consider as the government creates a new housing strategy for England from Spring 2025.”
Savills estimated that England needs 187,000 additional affordable homes per year in order to meet demand.
As it stands there is an annual affordable housing shortfall of 128,000 homes – with the shortage being most egregious in the South.
