Affordable starts hit ten-year high

Homes England and the Greater London Authority in the first half of the financial year together funded the highest number of affordable housing starts in a decade, according to government figures.

The data show that the two bodies – who administer the affordable housing programme in England – funded 17,184 affordable housing starts between April and September, up nearly 50% on the figure for the first half of 2018/19. This is the highest figure recorded for an April-September period in the data series, which started in 2009/10.

The data appear to confirm recent statistics indicating that strong affordable housing activity is partially making up for a weaker private sales market. However, it is not clear yet whether the data represents a genuine uptick in activity, or is simply the result of starts, which traditionally peak in the second half of the year between October and March, being spread more evenly across the year.

The split of different types of affordable housing showed significant growth in the number of homes for affordable home ownership being delivered, to 6,419. Among rental properties, the number started in the more expensive “affordable rent” category fell, while the number of traditional “social rent” properties grew by 45% to 715.

Typically, the vast majority of grant-funded affordable homes are started in the second half of the financial year, with last year nearly three quarters of the 45,098 homes starting between October and March.

Housing completions for the first half of the year were broadly flat on 2018/19 at 13,601.

Joseph Daniels, founder of modular developer Project Etopia, welcomed the figures. He said: “There is a long way to go to plug the hole in England’s housing deficit, but Homes England is chipping away at it at an ever-growing rate, reaching a 10-year high for starts on new homes.

“Its efforts bode well for the coming year with a bumper rise in completions expected to follow.”

The statistics emerged as the Chartered Institute of Purchasing and Supply (CIPS) published its monthly construction purchasing managers’ index (PMI), which showed construction activity remaining in decline, albeit at the slowest rate since July, hit by domestic political uncertainty. Within that, the CIPS PMI said that the housing sector was the “most resilient” part of the industry, helping to moderate the decline.

Tim Moore, economics associate director at IHS Markit, which compiles the survey for CIPS, said: “House building has been the most resilient category of construction output in 2019. However, it remains a concern that overall volumes of residential building work have dropped in each month since June, which is the longest phase of decline since the start of 2013