Market intelligence group, Estates Gazette has suggested that the proportion of affordable homes started each year in capital has halved, partially because of a 60% cut in social housing subsidy in the last government’s 2010 spending review.
According to the analysis, developers paid £800m less than expected towards social housing in London since 2011.
Nadia Elghamry, data editor at Estates Gazette, said: “Historically, 75 affordable homes have been built for every 100 private units, but since the spending review in 2010 which saw a Tory-led government policy slash the housing subsidy by 60%, it has dropped substantially.
“Now just 40 social homes are built for every 100. That means at a time when starts on private homes in London have reached a two-decade high, we have seen the proportion of expected affordable housing nearly halve. The theory was that cash contributions paid by housing developers rather than physically building homes on site should have plugged this gap. They have not.”
Campbell Robb, the chief executive of Shelter, said: “Only clear rules on how many affordable homes must be built will turn the tide on this worrying trend. Up until 2008, there was a 50% affordable housing target for new developments in London and more genuinely affordable homes were built as a result. There’s no reason this can’t work again.
“Both the mayor and central government need to reinstate clear rules for developers on affordable housebuilding and finally start to curb London’s drastic shortage. If they don’t, ordinary Londoners face being priced out of the city altogether.”