A new report from The National Housing Federation (NHF) has suggested that the number of affordable homes being built this year could decline by as much 65%.
Changes to the planning system combined with funding cuts could result in as few as 21,000 homes being built. Housing Minister Grant Shapps, warned last week that up to 150 social housing projects were in danger, due to a £610m "black hole" in the government's finances.
In light of their findings, the NHF has contacted housing Minister Grant Shapps to urge the government to honour its spending commitments on new housing developments. The NHF's chief executive David Orr, warned: "The building of affordable homes could potentially grind to a halt this year - with all housebuilding, including private developer construction, falling off a cliff."
However, Shapps responded: "Houses cannot be built by targets that don't work with money that doesn't exist." Instead, he argued that the government is planning to create incentives for new developments, while as part of the Big Society vision, communities would be able to "develop their own vision" for what building would benefit their local area most.
Housebuilders, in both the private and public sectors, have suffered badly during the property market's recession lead slump. The last three years have seen a steady decline in the numbers of homes being built, especially in high demand areas such as London and the South. A preference over the last five years for building flats and apartments, more suited to by-to-let investments rather than new home owners, has further worsened the situation.
Despite the seemingly constant stream of gloom and doom, a new report from Worldwide Property Group, claims that buyer confidence remains high. In the May survey, 84% of respondents felt that the current time was a great time to buy property in the UK, whilst 68% felt that now is also a good time to consider overseas property purchases, with 53% considering purchasing a foreign property. Areas favoured by those looking to buy abroad include the US, Caribbean, Turkey and Spain.
Interestingly, only 6% said that they expect the UK house prices to fall in the next year, with 61% saying that they were buoyed by historically low interest rates and 49% citing low rates as their motivation to buy UK property.
Given last weeks mixed figures from the various House Price Indices, with one actually showing a slight fall in house prices, and the continuing fall in the strength of the pound, it would be interesting to see if the Worldwide Property Group survey returns similar results this month!
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