G15 housing starts fall as supply chain pressures bite

The number of housing starts by the group of 15 London-focused housing associations fell in the year to March as the industry battled with rising cost pressures, even though the previous year had been impacted by the covid pandemic.

Starts by G15 housing associations in the 2021/22 financial year fell to 10,951, 3.1% below their 2020/21 figure which had felt the force of first wave of covid lockdowns when building sites were shut for weeks. However, the group said that completions in the year were up.

The latest starts figure is the lowest recorded in at least seven years by the group and 30.3% down on the housing starts recorded in 2019/20, the last pre-pandemic financial year.

A statement by the G15 blamed the drop on the continued effects of the post-pandemic recovery, supply chain challenges and a shortage of labour.

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The G15 includes London’s largest developing associations, such as L&Q, Clarion, Peabody, Hyde and Optivo.

The group said the proportion of starts which were social rent homes – the most affordable to live in – had risen to its highest level for years. Some 14% of the starts were for social housing, equating to 1,445 homes.

The number of completed homes handed over to residents rose in 2021/22 by 4.3%, to 11,527, as the industry recovered from the pandemic. Within this figure, the number of social rented homes more than doubled from 335 to almost 700.

The G15 also said that 1,549 homes have been started on site in the first quarter of this current financial year, which is up sharply on the 813 started in the first quarter of 2021/22.

However, the news comes just weeks after the government published a report warning that the delivery of the 2021-26 affordable homes programme was already at risk because of rapid rises in build costs.

Geeta Nanda, G15 chair and chief executive of G15 member MTVH, said there were “significant challenges” facing not-for-profit housing associations seeking to build much-needed affordable homes, but that G15 landlords were working with the government, the mayor of London, Homes England and local authorities to overcome them.

She said: “With inflation driving up the costs of materials, labour and services, we do need to work with our partners to consider creative options to keep building the new affordable homes that are so needed.

“Part of this must include considering whether fixed grant rates are sustainable in the current climate, and working with government to look at the core funding being invested into affordable home delivery in this country.”

Tom Copley, the deputy mayor of London for housing and residential development, said: “London’s housing sector has shown it can deliver and we now need ministers to back the capital with the additional investment to carry on building at the scale Londoners need despite the headwinds generated by Brexit, the pandemic and high inflation.”