Social housing providers are warning their ability to build new affordable and social rent homes is plummeting, thanks to the soaring costs of the post-Grenfell Tower cladding crisis.
Some 72 people were killed in the 2017 tragedy, but eight years on, as many as 12,000 buildings are thought to be wrapped in the kinds of flammable materials that led to it.
Work hasn’t even begun on half of the affected buildings, with an estimated 7,000 at-risk blocks not yet identified by the government. It’s thought the bill to remove those products across the country will run to the tens of billions.
But Housing Associations – not-for-profit organisations who provide social rented housing – are excluded from most government funding.
Instead the money for much of their remediation is coming from social tenants’ rent and being diverted from other projects.
The National Audit Office thinks it will have to spend £3.8bn in total to remove non-ACM, combustible cladding on buildings over 11m high.
New research suggests that’s the cost-equivalent of building 91,000 much-needed new affordable homes.
It’s as we’re seeing a huge drop in the number of new social rent and affordable homes being built by these providers.
Across England, the National Housing Federation (NHF) says affordable housing starts have decreased by 39% to 43,439 – the lowest number since 2016. In London affordable housing starts have collapsed by 90% in the year to March, compared to the year before.
The housing association Peabody says they have already spent £300m on cladding remediation, and that bill will keep rising.
At one of their sprawling development sites in east London, tower blocks spring from the ground. But only phase one of the 10-year project (905 new homes) is secure. Plans for the other 2,500 flats have been put at risk – precisely because of funds being diverted to building safety.
“If we don’t if we don’t find a way of funding the future phases, then I’m afraid we would have to stop at the end of phase one,” their chief executive Ian McDermott said.
The numbers are stark: “Normally we build about 2,000 homes a year. This year we will build fewer than 100 homes.
“It’s at a time when one in 21 children in London are living in temporary accommodation, so the need for social housing has never been greater.”
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The data seems to pour cold water on the government’s pledge to build 1.5 million new homes by the end of this parliament.
“The numbers are going in the wrong direction,” said Rhys Moore, executive director of the NHF. “I think it is now widely accepted that there is no way to meet the 1.5 million homes target without a significant increase in social and affordable house building.”
Earlier this month, a committee of MPs warned the government hadn’t taken the risks seriously enough and called for a formal assessment to be published by the end of the year on the way remediation costs are impacting house building targets.
Mr Moore is calling on the government to expand the Building Safety Scheme to include housing associations: “What we think is indefensible is that some of the poorest families in the country, social tenants, are having to pick up the costs with their rents, to make those buildings safe.”
Giles Grover, from End Our Cladding Scandal, agrees with that call: “Our campaign position has always been that social housing providers should have full and equal access to the funding.”
But unlike the housing associations and NHF, he’s concerned about too much of their focus being on development.
Throughout the cladding crisis some housing associations have faced criticism for their handling of building safety issues, particularly with regard to shared owners.
Mr Grover said: “We do need to make sure that social housing providers focus on their core purpose, which is making those homes decent, making those homes safe, and actually treating people like vulnerable, shared owners with a lot more respect.”
If there’s a safety issue, he said, “let shared owners sublet, let them sell – or buy back their flats. Because right now associations are just carrying on, wanting to be tinpot developers”.
A Ministry of Housing, Communities & Local Government spokesperson said: “We are determined to make Britain’s homes safer and deliver change for residents who have suffered for too long, and it is right that developers pay their fair share.
“This government will deliver 1.5 million homes as part of our Plan for Change and just this week we committed £2bn to deliver thousands of new social and affordable homes. We continue to work closely with industry so we can deliver on our housing ambitions.”
