Rod Cahill, chief executive of social housing group Catalyst, has admitted that it will constructing only roughly half the projects it had forecast for the coming year.
Catalyst provides more than 19,000 homes across west London and the Thames Valley, and plans to increase the number it manages to 30,000 by 2012. According to the group, its construction goal over the next few years was to double development completions to exceed 1,000 mixed tenure dwellings per year by 2012-13.
Speaking at a meeting of the London Assembly’s Planning and Housing Committee held yesterday, Cahill was questioned by assembly member Mike Tuffrey about the target. Cahill said that despite initial predictions of 1,000 completions, half this figure was more accurate.
Cahill stated that Catalyst was still determined to build as many homes as possible. However, it has had to adjust its forecast due to various outside factors.
“We are committed and eager to provide affordable housing, but these ambitions were set under the old framework,” he sais. “Under the new framework of lower grants, higher rents and benefit uncertainty, we are trimming back on development.”
Cahill added that, in the past, money for building homes had often come from banks and bonds, but Catalyst would now have to look to raise more private money.
The committee also discussed the proposed affordable rent model which will allow social housing providers to charge new tenants up to 80% of market rent. It found that, while this providers more flexibility and the opportunity to “keep the show on the road”, London presents particular challenges to the model.
These include growing housing need, high market rates and a lack of clarity over both future rent levels and the security of income streams, presenting uncertainties for investors when housing associations “go to the market” with developments.
Assembly members Nicky Gavron, chair of the Planning and Housing Committee, said: “We heard today that housing associations are wrestling with the challenge of keeping the supply of affordable housing going, but at rents people can actually afford.
“There is a specific London dimension to this issue, especially in the more expensive areas in both inner and outer London. Currently the interaction between the proposed affordable rent model and the benefit reforms, particularly the total benefit cap, raises a serious question about how much new family housing can be delivered in London.”
james.a.kenny@estatesgazette.com
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