Page last updated at 07:01 GMT, Friday, 21 November 2008

Crisis hits affordable homes hope

New homes
Housing associations contributed over 400m to the economy in 2007/08

A plan to build 6,500 affordable homes in Wales by 2011 could be dashed by the economic crisis, according to a report.

The four-year scheme for affordable housing was one of the assembly government's key election promises.

The report, by Cardiff Business School, praises housing associations for building 1,533 new homes last year.

But it warns that the overall target, which was set before the downturn, may need a review in the current financial climate.

The report, which will be launched today, has been carried out by the Welsh Economy Research Unit at Cardiff Business School for housing association group Community Housing Cymru.

It points out that challenges facing housing associations have changed and intensified since the assembly government's affordable housing blueprint was commissioned.

The assembly government... is committed to maximising other opportunities for funding.
Deputy housing minister Jocelyn Davies

And it comments: "The economic environment has become acutely difficult, with traditional credit lines contracting and causing the private sector housing market to stagnate in Wales and in the UK as a whole.

"There may be scope for the Welsh Assembly government to mitigate some of the constraints which may arise in the future.

"Whatever the case, the target to increase the number of affordable homes by 6,500 by 2011 may need to be reviewed in the light of new conditions. "

In order to meet the problems being presented by the current financial crisis, the report suggests that housing associations should maximise their role as social enterprises, and that ministers may need to look again at targets set in more favourable economic times.

The report also shows that the number of affordable houses made available in the last year by housing associations varied widely across Wales.

'Partnership'

There were 236 in Cardiff, and 190 in Bridgend, while the Vale of Glamorgan had just nine, and Neath Port Talbot eight.

However, on a more positive note, the report emphasises the important role Welsh housing associations play in supporting the economy, contributing over 400 million pounds to the economy during 2007/08, with over three-quarters of that money staying in Wales.

Launching the report, Jocelyn Davies, deputy minister for housing, highlighted the importance of the partnership between the assembly government, local government and the housing association sector.

She said: "We expect all partners - public, private and third sector - to help us deliver our wider objectives for economic and community regeneration.

"To support this, the assembly government has already increased the amount of Social Housing Grant to unprecedented levels and is committed to maximising other opportunities for funding.

"We need to ensure that local people have real control over their communities and the organisations that deliver their housing and regeneration."

Ian Williams, chair of Community Housing Cymru, commented: "As registered social landlords we have a key part to play in preventing homelessness, but as social enterprises we also have a broader role to play in sustaining and creating employment, investing in housing and also regenerating communities.

"We need to work together to ensure that investment in housing and regeneration has the maximum impact in communities that have been blighted by poverty for too long."



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SEE ALSO
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