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The largest housing associations in London have warned their development output could drop by a third unless they receive extra government support.

The G15 group, whose members collectively built 11,600 homes in 2021/22, said restrictions to rent rises, increased borrowing costs and the need to divert money towards improving existing homes and meeting building safety requirements mean future development is likely to fall sharply.

The group, which manages 770,000 homes, added that a previous three-year rent freeze, plus a 7% rent cap, agreed shared ownership rent caps and the scrapping of rules on rent convergence 鈥� under which association rents are brought into line with council rents 鈥� has led to a 拢6.6bn loss in investment since 2016.

It says a further 拢12.4bn in 鈥渞einvestable resources鈥� will be lost over the course of members鈥� 30-year business plans.

The G15, in its submission to the levelling up, housing and communities committee鈥檚 inquiry into social housing sector finances, warned that many of its members will reduce development spend to prioritise investment in improvements to existing properties.

Housing associations are facing pressure to invest in improving existing properties, with the Social Housing Regulation Bill imposing new consumer rules from next year, alongside the need to invest in retrofit and meeting building safety standards.

The G15 is calling for the government to introduce a raft of measures to support associations to build.

Its asks include a long-term rent settlement for the sector, grant funding for regeneration, rules requiring the release of land for affordable housing and the removal of VAT on housing association activity (see box below).

Geeta Nanda, chair of the G15 and chief executive of Metropolitan Thames Valley, said associations鈥� 鈥渃apacity is being put under growing pressure鈥� due to funding costs and rent caps.

She added: 鈥淲e need a proper conversation about how the priorities we all share are going to be achieved in the coming years.

鈥淚nvestment in existing homes is rightly the first priority, but without housing associations鈥� contribution to building new affordable homes, issues like overcrowding aren鈥檛 going to be dealt with, which in turn impact the conditions of existing homes.

鈥淚t鈥檚 too simplistic to suggest we can pick investment in existing homes over new build 鈥� we need both.鈥�

>> See also: 

>> See also: 

Nanda said a long-term plan for social housing is 鈥渄esperately needed.鈥�

She said: 鈥淗ousing associations build almost 1 in 4 new homes, and if we reduce our programmes to meet costs like building safety and retrofit, I am really worried that the gap won鈥檛 be filled and it鈥檚 people in dire housing need that will suffer.鈥�

The G15 is a supporter of 好色先生TV鈥檚 sister title Housing Today鈥檚  calling for the government to re-commit to building 300,000 homes a year. The campaign is calling for solutions to enable the entire housebuilding sector, including housing associations, to build more homes.