Labour ministers face warnings that their housebuilding plan for London risks costing an astronomical £54 billion just for affordable homes, unless housing associations can tap more private investment.
The G15 group, which represents leading not-for-profit housing associations, blamed “years of policy chaos, rising costs and the need to also upgrade existing homes” for its members struggling to build new homes.
The Government’s building plan over the next five years foresees 400,000 new homes in London, which the G15 says would each cost an estimated £450,000 on average.
The group, whose members house one in 10 Londoners, said that at least 120,000 of those properties must be social and affordable homes to meet targets outlined by City Hall, bringing the cost to £54 billion.
But Deputy Prime Minister Angela Rayner, the secretary of state for housing, declined on Sunday to reaffirm the number of new social housing properties that would be built over the next five years, telling the BBC that there were “so many moving parts”.
G15 chair Fiona Fletcher-Smith, who was due to speak at Labour’s annual conference in Liverpool later on Monday, urged the Government to release shackles on the affordable sector.
"We have the capacity to unlock billions in private finance, but we need the government to act now,” she said. “With the right support, we can play a key role in meeting Labour’s housing goals and ensure that London’s future is more affordable and secure for all its residents."
In a new report, the G15 said the capital’s five-year Affordable Homes Programme (AHP) already faces a £22.2bn funding gap, and that its members have been forced to scale back their housing starts by 76% in 2023/24, compared to last year.
It said housing associations have shown the potential of private-sector partnerships at projects such as Peabody’s Thamesmead, The Hyde Group’s Charlton Riverside, and L&Q’s Barking Riverside, where up to £6 of private investment was secured for every £1 of government funding.
It appealed for reforms including giving housing associations access to a post-Grenfell safety fund for critical renovations, which is currently restricted to private developers.
They also want the Government to let them set rents over multiple years, not just for the next 12 months, to give them more financial stability and borrowing power in capital markets.
“Without these changes, housing associations will struggle to meet the demand for social and affordable homes while also maintaining safety standards in their existing stock,” said the G15.
