No-deal Brexit would be ‘catastrophic’ for affordable housebuilding, leaders say

A no-deal Brexit on March 29 could be disastrous for delivering affordable housing in London and would make emergency measures necessary, some of London’s leading public figures have told the government.

In a letter to the local government Secretary James Brokenshire – the Mayor of London Sadiq Khan, the housing executive of London Councils and the chair of G15, which represents London’s largest housing associations, have said they are ‘deeply concerned’ about the impact of leaving the EU without a deal would have on the city.

The trio believes that a ‘bad’ Brexit deal would put thousands of planned affordable homes at risk, saying it has the potential not just to jeopardise homebuilding in London but also the government’s own target of building 300,000 homes each year.

It adds that in the event of a no-deal Brexit the government will need to provide an emergency grant of approximately £5.2bn to ‘de-risk’ housing association and council programmes and ensure the delivery of projects that have already been planned.

‘Brexit is already impacting the homebuilding sector in London,’ reads the letter, signed by Khan, London Councils’ executive member for housing Cllr Darren Rodwell and Paul Hackett, chair of G15.

‘It is very frustrating, especially given our success over the last two years in building confidence with our partners, and given the shortage of good quality and affordable homes.

‘There is an urgent need for certainty and we urge the government to step up and take responsibility for addressing these serious challenges.’

The growing uncertainty surrounding Brexit is already causing problems in the housing sector, the trio claims, saying that private home builders and housing developers are choosing to hold back on major projects, fearing lost cross-subsidy from market sales.

Around 30,000 affordable homes are planned over the next 18 months with an extra 9,000 homes set to be converted from market sale to social rent, but these affordable homes will be at risk if the funds are not available to deliver them, they say.

The group has also expressed concern that a no-deal Brexit would lead to a severe shortage in the supply of essential labour and in materials for homebuilding, with 60% of imported construction materials coming from the EU.

This would not just have an impact on new build homes, but also care homes reliant on non-UK workers and older housing as many components used to update older homes with lifts and heating systems are imported, the local leaders say.

‘In any scenario, we are committed to doing all we can to keep London building the council, social rented, and other genuinely affordable homes we need,’ the trio conclude.

‘We would welcome your government’s full and immediate support to make sure that, whatever happens with Brexit, we can continue to deliver on this agenda.’

They have also called upon the government to ensure that London’s housing associations and builders have continued access to funding as well as supply of essential labour and materials.

The Ministry of Housing, Communities and Local Government was contacted for comment but did not respond by the time of publication.