THE National Housing Federation has warned Government that its financial assumptions are seriously flawed and that the national investment of £8bn outlined in its Green Paper could fail to secure the 70,000 new affordable homes a year that are needed.

The Federation believes the Government’s proposals to build 10,000 affordable homes a year in the North can be achieved without significantly increasing the region’s flood risks – especially if care is taken with the locations for the regions new growth hotspots.

However, the Federation also says that attempting to meet the Government’s house building targets with its flawed financial modelling could bankrupt the housing association sector within five years.

Derek Long, National Housing Federation Head of North, said: “The Government’s heart is in the right place – unfortunately, its wallet isn’t.

“We calculate there is a shortfall of about £3.6bn nationally.

“Pushing associations too far will certainly squeeze the millions of pounds they invest in community centres, wardens and other essentials that often keep our communities together.’’

The Federation also revealed:

Growth Points

Government heard our call for more resources to support the North’s economic growth. This is a major step forward, ensuring growth hotspots – for example around York, Warrington and Durham – will be less hindered by spiralling house prices.

Flood plains

Ministers should be applauded for recognising that there is simply no way we could tell the 560,000 people currently on waiting lists for a decent home in Yorkshire and Humberside, that we cant build any more new homes because of concerns about flood plains. After all, much of the country is a flood plain.

We need to build new homes while substantially improving our flood defences and drainage systems – and the Environment Agency should be more active in vetoing any new development at serious risk of flooding.

Housing supply and investment

We commend the Government for agreeing with us that to solve the nation’s desperate housing crisis we need 70,000 new social homes a year. However, ministers have to put their money where their mouth is and invest sufficiently for the building of these homes.

We fear that the Government has got it’s maths wrong on the investment required to build the 10,000 new social homes a year in the region.

Nationally they need to invest £11.6bn, not the £8bn proposed in the Green Paper. Attempting to meet the Government’s house building targets with this flawed financial modelling could bankrupt the housing association sector within five years, and could easily lead to us making the same mistakes of the 60s and 70s all over again.

The National Housing Federation in the North is the voice for over 360 not-for-profit, independent housing associations.