Affordable housing projects shelved by Government

Photo: Dale Harvey @ flickr

Planned affordable housing developments in Hackney, Lewisham and Tower Hamlets have been put on permanent hold after the Government announced new money-saving measures.

A total of thirteen schemes for building new homes across the capital have fallen victim to cuts made by the new ruling coalition.

Among them are projects at Hackney’s Hertford Road development, Lewisham’s Silkworks, and Caspian Wharf and Leopold Estate, both in Tower Hamlets.

Many of the new developments were approved under the previous Labour administration and scheduled for completion by March 2012. But in the midst of a budget crisis described by Prime Minister David Cameron as a ‘black hole’, funding for housing has been dramatically slashed.

The Homes and Communities Agency, which had been promised grants of £780 million, will now only receive around half that sum. Some money remains to be allocated, meaning that some projects could be saved.

The remaining funds will be granted on the basis of a review, with priority given to the most needy areas.

The planned cuts have not found universal support among Conservatives. Speaking at a City Hall event earlier this week, Mayor of London Boris Johnson attacked the notion of a freeze on housing.

“It would be totally insane in my view to cut provision for affordable housing by which we can give Londoners on modest incomes places to live and keep the London economy moving,” he said.

The announcements come as Housing Benefit is also set to be cut, with severe restrictions imposed on the maximum amounts of money payable to claimants. Opponents of the plans set out in the new budget have argued that they will cause a crisis among low-income residents in areas of inner London.

Reacting to the measures, Campbell Robb, Chief Executive of housing charity Shelter, said: “The underlying issue which this budget has failed to address is the critical shortage of affordable housing, which means more and more people are being housed in the private rented sector where rents are almost double those in social housing.”

“If we are to reduce the housing benefit bill in the long term we must continue to build more affordable housing.”

Some of the schemes affected by the new cuts have also previously received attention as prospective residents who bought recession-hit new homes ‘off plan’ before construction faced bankruptcy – a situation described by property experts as a ‘timebomb.’

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