Affordable housebuilding hits seven-year high

Affordable housing completions rose to the highest level since 2015 in the year to March as the industry recovered from the covid pandemic, according to the latest official data.

Figures released today by the Department for Levelling Up, Housing and Communities (DLUHC) reported that 59,175 affordable homes were built in the 2021/22 financial year, 13% up on the covid-hit prior year, with just under two-third of the homes for rent.

The performance in the year came despite well-publicised difficulties in delivery of the government’s new affordable homes programme, which is being threatened due to rising construction costs and build delays.

The figure of 59,175 completions from both grant-funded and section 106-funded homes compared to 52,145 homes built in 2020/21 in the teeth of the pandemic, and just topped the 58,964 built in 2019/20 before the pandemic hit. The last time more that more homes were built was 2014/15, when 65,959 homes were delivered.

The data showed that just 44% of the homes were delivered wholly through section 106 agreements, with no grant, down from the 47% last year.

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The figures also record an increase in starts on site, which rose to 63,228 in the year, up 10% on 2020/21. However, the starts figure remains significantly down on the pre-pandemic high of 68,245 recorded in 2019/20.

The data comes amid concern over the future delivery of affordable housing, particularly in London where housing associations have been particularly hard hit by build cost rises and fire safety costs.

In August a DLUHC report admitted build cost inflation risked derailing the government’s £11.5bn affordable housing programme.

In September the Public Accounts Committee chair Meg Hiller told DLUHC to “get a grip” after the National Audit Office revealed a likely 23,000 shortfall in the 180,000-home 2021-26 housing programme.

Dorian Payne, director of property developer Castell Group welcomed the increase but noted delivery still fell far short of the 145,000 affordable homes estimated by the National Housing Federation as required per year in England to meet demand, and said this would likely worsen in the forecast economic downturn. He said: “This data shows how far away we are from building enough affordable homes and how significant the affordable housing crisis is.

“The level of new affordable homes being provided under S106 agreements […] highlights the continued reliance on private house builders. If private house builders slow down construction due to the current market and economic environment, it’s going to have a direct impact on affordable housing provision, arguably at a time when it’s needed the most.”