Builders asking to tear up agreed contracts with others walking away from schemes completely
Homes England has missed its delivery targets for the second consecutive year, citing last year鈥檚 鈥渄eteriorating鈥� economic conditions as the agency said housing associations were having to deal with more and more contractors walking away from jobs because of escalating prices.
The agency, in its annual accounts for the 2022/23 financial year, funded or supported the development of 33,713 homes completed in the 2022/23 financial year.
This meant the agency, which administers programmes including the 拢11.5bn affordable homes programme, delivered 86% of its main target for completions of 39,008 homes. This year鈥檚 figure was also down on the 37,632 number recorded the previous year.
It missed its target for homes started by 30%, with work beginning on 37,175 homes against a target of 52,967.
But it said associations were reporting more fraught relations with contractors 鈥渨ith firms requesting fluctuation clauses, re-negotiation of fixed price contracts and in some instances withdrawing from negotiations totally鈥�.
It added affordable housing providers were facing a 鈥減erfect storm鈥� of issues which 鈥渆ngulfed鈥� development plans. 鈥淏uild cost inflation, rising labour costs, material availability, building remediation issues and the duty to support tenants through a cost-of-living crisis hindered investment in new homes.鈥�
The government is calling on housebuilders, housing associations and councils to contribute evidence as part of a routine review of whether Homes England is 鈥渄elivering for the taxpayer鈥�.
In May, Homes England published its new five-year strategic plan, under which it will shift away from a 鈥減urist鈥� focus on housing supply towards regeneration, with performance judged by a much wider range of metrics including social value per pound of investment.
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