Mixed picture for builders as social housing feels pinch

Social housing budgets will be squeezed by a huge spending clampdown despite government plans to build 150,000 affordable homes over the next four years.

The housing budget is being slashed from £8.4 billion to £4.4 billion over the next four years with expansion plans paid for by hiking rents to 80% on the private-sector average for new tenants.

National Housing Federation chief executive David Orr said: "Cuts on this scale will come as a devastating blow to the millions of low-income families currently stuck on housing waiting lists.

"The harsh reality is that because of these cuts, the new social homes this country so desperately needs can now only be built by dramatically increasing rents for some of the most vulnerable and poorest in our society."

London housebuilder Telford Homes also warned of the impact of the budget cuts on the development of affordable homes in the capital. Telford has stopped buying any sites dependent on grant funding from the Homes and Communities Agency and is only buying homes where it can sell them purely on the open market.

The Construction Products Association, however, welcomed the commitment to build affordable homes.