Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.A new housing policy announced in George Osborne’s budget will reduce affordable house building by around 14,000, the Government’s spending watchdog has said.
The Office For Budget Responsibility, set up by the Chancellor in 2010, said restrictions on housing association rents would have a knock-on effect on building.
Housing associations build homes by borrowing against their future rents and forcing them to reduce rents by 1 per cent a year will make it more difficult for them to build.
“The Government’s decision to impose 1 per cent annual rent reductions in the social rented sector for four years from April 2016 will directly reduce social landlords’ rental income, and therefore their financing for, and returns to, investing in new housebuilding,” the OBR said.
“The adjustment would be broadly consistent with reducing housebuilding by housing associations by around 4,000 in 2019-20, when the full effect of the policy on their rental income has been reached.
“Over the forecast period, our assumptions suggest around 14,000 fewer ‘affordable homes’ will be built.”
The OBR estimates roughly a 10 per cent reduction in total homes output, or a fall in 4,000 a year out of 37,000 affordable homes built annually by housing associations.
Mr Osborne also plans to force housing associations and councils to charge tenants earning more than £30,000 or £40,000 in London market rents rather than social.
The spending watchdog also warned that the measure could add £60bn to the national debt because forcing new policies on housing associations could make them count as part of the public sector.
“There is a risk that Government policies – including the social rent measure in this Budget and the Right-to-Buy proposals that are not yet firm enough to be included in this forecast – could prompt the ONS to reconsider ... classification,” the economists warned.
“If housing associations were to be classified as part of the public sector, their approximately £60bn of debt would be added to the [public sector net debt].”
Housing associations are not-for-profit private landlords that manage a large part of Britain’s social housing stock.
The Conservatives also say they will extend the powers of Right To Buy to association tenants, which will allow them to buy their homes at discounts.
Housing sector figures have warned that that policy could significantly undermine associations’ finances, with others suggesting a legal challenge could be brought against ministers.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments