The Government could miss its target of building three million new homes by 2020 by up to nine years, David Orr, chief executive of the National Housing Federation, has warned.
Mr Orr told delegates at the federation’s annual conference in Birmingham that without radical action and further government intervention, only 1.6m homes would be built by 2020, and the 3m target figure might not be reached until 2029.
‘With the global credit crunch worsening, and conditions getting tougher for all house-builders, it is time to recognise that the 2020 target is now almost impossible,’ he said.
‘The climate for house-building has changed beyond all recognition, for both private developers and social house builders. ‘The number of homes being built is falling, and we need the Government to take further action to put the programme back on track.’
He praised the prime minister for making the dire need for new housing a national priority, but added: ‘We need the Government to be more radical, and housing associations to be more creative to deal with the changed market. If we get this right, housing associations could be in a position to lead the recovery in house-building.’
Historically, housing associations had funded home-building through a highly-successful public-private partnership which raised more than £1 privately for every £1 provided by central government, but Mr Orr said: ‘The financial model which has been so successful for so long can’t work in the present, broken market.’
It came as Bank of England chief economist, Spencer Dale, warned the housing collapse was now hitting the wider economy.
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