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Social housing sinks as HCA cuts bite

Architects working on social housing projects have been savaged by government cuts, as starts on site are down 40 per cent on this time last year

Hundreds of schemes are on hold as the Homes and Communities Agency (HCA) struggles with budget cuts of £230 million.

Construction industry tracker Glenigan said the total value of social-housing schemes starting on site in the second quarter of this year has dropped by 40 per cent in a year. Private housing projects were down two per cent and retail was down 23 per cent.

Allan Wilen, Glenigan’s economics director, said: ‘Private housing had previously been a source of optimism, as returning private-sector confidence encouraged developers to invest in new work. However, this dip in project starts highlights the fragility of the recovery.’

Keith Johns, managing director at social-housing specialist Johns Practice, said workload at his 15-strong firm had fallen below Glenigan’s estimates.

He said: ‘There’s certainly a drop-off in starts on site and in new inquiries. We have a lot
of schemes in the pipeline but they’re not moving.’

Ben Derbyshire, managing director at housebuilding giant HTA Architects, said: ‘If things do pick up, it won’t be because things are moving in the housing association sector, where “the money has all gone”.’

Housing associations, which previously kept housebuilders afloat, are now shying away from new schemes because they are unsure of the projects the HCA will be able to fund.

Even so, Chris Warwick of Cheshire-based PWL Architects said he has seen an upsurge in affordable housing work for developers in the North West.

He laid off staff in 2008 when private housing crashed, but today said affordable housing was ‘one of our strategies for survival’.

Postscript

Ian McHugh, associate director of Manchester-based Triangle said: ‘Since the election we have seen a sharp drop in social housing clients’ confidence to progress with projects. Projects without full funding approval have been put on hold due to what has been characterised as a ‘black hole’ of information from the HCA. The view seems to be that not much more will be known until at least the October spending review and not very much will be moving in the meantime.

‘The reduction in cuts announced last week is welcome but until the HCA announces where the axe will fall, there will be this deadly paralysis in the industry’s decision making processes which makes business planning very difficult.

 
‘We have not detected any signs of the private sector moving yet and recent house price forecasts will not be helping matters.’
 
 

 

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