Rising construction costs mean the number of London properties that can be financed through affordable housing investment will be 15% lower than would have been the case three years ago, according to consultancy EC Harris.
The £1.25b being invested in affordable housing in the city will pay for 45,000 homes through 2018. If that figure had been invested in 2012, the low point in the construction cycle, it would have paid for an extra 6,300 homes, EC Harris said.
Private developers are responsible for funding much affordable housing, which means the sector “cannot act counter-cyclically as it has in previous downturns,” Mark Farmer, head of residential at EC Harris, said.
