Starts by London housing associations down 92% as work begins on just 150 homes

The first half of 2024 has seen the lowest number of starts registered by housing associations in the capital since records began in 1990. Just 890 new homes were started in London in the first half of the year by housing associations, lower than 1,000 for the first time in decades.

New build starts by all builders in England stood at 22,990 in Q2 2024, a 65% decrease on Q2 2023. Meanwhile, new build completions by all builders were estimated to be 43,030, an 11% increase on the previous year.

Andy Hulme, group chief executive of Hyde, said it was “very worrying, but sadly not surprising” to see a record fall in the number of new homes being started. 

“The drop in starts by housing associations in London is particularly acute at a time when the need for affordable housing in the capital has never been greater,” he added.

Mr Hulme said: “As well as this latest fall in the supply of affordable homes, it’s also crucial to look at the long-term trends. The supply of new social housing, in particular, has been devastated over the past 30 years.

“What’s even more concerning is that worse is set to come as social housing starts are likely to fall further in the coming months as the number of social homes granted planning permission fell by more than a quarter year on year (27%).”

He said that returning to a long-term rent formula of the Consumer Price Index +1% – as is reportedly being considered by ministers for the October Budget – “won’t be sufficient to meet the challenges the sector faces, or the government’s ambitions to deliver the biggest boost to social and affordable housing for a generation”.

Mr Hulme called for the reintroduction of rent convergence to make homes managed by large London housing associations financially sustainable in the long term.

In response to the figures, MHCLG pointed to its announcement on Monday 30 September that deputy prime minister Angela Rayner was seeking a “partnership approach” with the mayor of London to boost housebuilding in the capital.

Writing to London mayor Sadiq Khan, Ms Rayner said: “I appreciate fully the scale and breadth of the housing delivery challenge in London, and I recognise that the city faces unique issues, but the government does expect London to take steps to boost its output.”

She added: “Our joint focus can now turn to our proposed changes to the National Planning Policy Framework and other changes to the planning system, including proposals to optimise density by providing increased certainty in relation to brownfield development and to release low-quality grey belt sites through Green Belt reviews.”

In May, Mr Khan called for a £2.2bn emergency stimulus for housebuilding in the capital after it emerged that starts under his grant funding affordable housing programme fell 90% over a 12-month period.