More than 8,500 new affordable homes due to be built in the next year were at risk of standing empty, as social housing providers stopped taking on new Section 106 contracts, research from the Home Builders Federation (HBF) found.
Around 900 completed affordable homes were already sitting empty because registered providers had not agreed to take them on, with thousands more at risk.
Section 106 agreements meant local authorities told developers how many affordable homes must be built on new sites, and these homes were sold to registered providers at a reduced price.
Home builders delivered about 45% of all new affordable homes each year under this model.
The research found a drop in registered providers bidding for Section 106 affordable homes in recent years, with economic and policy problems in the affordable housing sector causing the pullback.
With no contracts in place, housing delivery stalled, some developments were delayed or phased differently, and in some cases, affordable homes were left empty.
At least 700 housing developments had been delayed in the last three years because of the lack of commitment from social housing providers.
This reduced housing availability, extended the housing crisis and deepened housing inequality.
The delays also put pressure on small and medium sized home builders, as capital was tied up in unsold homes, hitting cash flow and affecting plans for future projects.
More than 90 members of the HBF wrote to housing minister Matthew Pennycook earlier this summer, calling for Government action.
They said councils should be more open to using cascade mechanisms in Section 106 agreements, and should work with developers to renegotiate agreements if a registered provider cannot be found.
This would let homes be built as other types of tenure, or in the last resort, a payment made to the local authority instead of the affordable homes.
The HBF also called for Homes England grant funding to be allowed on Section 106 affordable homes for a limited time, to prevent the loss of new affordable homes.
Neil Jefferson, CEO at the HBF, said: “Against rising affordability pressures and increasing numbers of families living in temporary accommodation, it cannot be that Affordable Homes are left standing empty.
“Government’s social and Affordable Housing announcements were a welcome step to giving Registered Providers confidence to plan long term, but they are doing little to ease the immediate constraints of delivering Affordable Housing through Section 106 agreements.
“Right now, an estimated 100,000 private units are stalled, which not only threatens the supply of much-needed homes but also risks the livelihoods of regional businesses and hardworking tradespeople up and down the country.”
Jefferson added: “While Government’s housing announcements have been welcome, as it stands, housing associations are unable to bid and private buyers unable to buy, leaving the housing outlook increasingly uncertain.”
