Affordable housing output has suffered as a result of the economic situation. For all planning applications, house builders must ensure that 40% of homes are affordable. But if they are not building private homes, they’re not building affordable ones either.
The government has made much of its commitment to provide new affordable homes. The Housing Corporation says its £8.4bn National Affordable Housing Programme will provide 155,000 new properties between now and 2011 – almost double the rate achieved in 2006 and 2007. It will be embarrassing if this target is missed.
This means we can expect to see Whitehall taking further steps to help the construction industry. It has already pledged £13m to buy unsold houses from developers to use as affordable homes.
But it is essential that more lenders become involved in shared equity or ownership finance rather than sitting back, stockpiling funds and doing nothing to get the market moving.
The government is committed to shared ownership schemes and it is likely that funding for them will increase.
And tighter lending criteria and lower LTVs for first-time buyers mean that even more of them will turn to shared ownership schemes despite falling prices.