Latest Public Sector News

27.07.15

Rent cuts could threaten plans for 42,000 new homes

District councils could be forced to scrap plans to build 42,000 new homes over the next 30 years as a result of cuts to social housing rents, according to new research released today.

The survey and analysis by the District Councils’ Network (DCN) involving 73 stock-holding districts showed that government plans to cut rents by 1% could result in 3,700 less homes over the next four years.

Over 30 years, revenues would reduce by £10bn, threatening 42,000 planned new homes.

DCN director, Steve Atkinson, said: “A 1% rent reduction is good news for existing tenants, but for future tenant the survey shows an effective 3.5% overall reduction would have a significant negative impact on districts’ plans for building new housing stock, without measures to secure a more effective balance between the needs of present and future tenants in the longer term.

“It is to be hoped that a way ahead can be reached ultimately with ministers on this issue, so that district councils can continue to play their full part in delivering national housebuilding ambitions.”

Atkinson claimed that while “some activity has stalled already as a result of this announcement”, districts remain “enthusiastic to deliver housing growth in the longer term” despite DCN members being “strongly” concerned.

The findings will inform talks between DCN chairman Cllr Neil Clarke and ministers from the Department for Communities and Local Government in a meeting requested last week.

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