VIDEO: London faces an £800m shortfall in its affordable housing funds after cash contributions by developers failed to keep track with rising private starts.
Section 106 agreements worth £1.3bn should have been paid by developers in lieu of on-site provision of affordable housing over the past four years, according to EGi’s London Residential Research, as construction of private homes reached a two decade high.
Instead developers have paid £750m equivalent to a cut of £5.5m for each residential planning application in the capital.
The proportion of social homes to private starts has fallen dramatically according to LRR following the coalition government cutting the housing subsidy by 60% as part of the 2010 spending review. Before the review an average of 74 social houses were built for every 100 private units. After, it dropped to 44 social homes in every 100.
“Bricks on the ground delivery has, if not exactly failed, seriously stalled, and given the meteoric increase in the number of private units starting in 2014, the delivery of actual spade-in-the-ground social housing is down by 47%,” said Nigel Evans, head of EGi’s LRR.
