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Housing targets won't be hit till 2029, says NHF

The Government will miss its 2020 house building target by up to nine years unless ministers further intervene in the property market, it was warned today.

The National Housing Federation said unless radical action was taken immediately, only around 1.6 million new homes would be built by 2020, well short of the Government's target of three million.

Instead the group, which represents England's housing associations, said it could take until 2029 to reach this level of new properties.

Federation chief executive David Orr said: "The Prime Minister was both brave and right to put the dire need for new housing centre-stage, and make it a national priority, when he took office last summer.

"However, with the global credit crunch worsening, and conditions getting tougher for all house builders, it is time to recognise that the very commendable 2020 target is now almost impossible."

The private developer sector, which traditionally builds around 75 per cent of new homes, has been badly affected by the property market downturn, with the number of new homes being built plummeting.

Estimates suggest the number of new properties built this year could be as low as 100,000, well down on last year's figure of 167,577, and future targets of 240,000 a year.

Speaking at the Federation's annual conference in Birmingham, Mr Orr warned that unless ministers intervened, the number of new homes being built was likely to stay at around 100,000 to 110,000 in the short-term, before rising to 160,000 in the long-term.

He said housing associations built 30,677 homes last year, but with the right level of Government support, this could be more than doubled to 70,000 a year by 2011, significantly boosting the chances of the Government's target being met.

But he warned that with the cost of private finance rising, it was becoming increasingly difficult for housing associations to raise the money they needed for building, both privately and from their own resources.

The group is calling on the Government to increase the level of grant available for each new housing association home to make up for the current shortfall in private finance.

It also urged the Government to bring forward the entire social housebuilding budget for 2008/2009 to 2010/2011 so that housing associations can use it now.

Other measures the group would like to see introduced include making the planning system faster and more efficient so that housebuilders can build at a faster rate, making public land available to housing associations at discounted rates and supporting them in buying private land.

Finally, it asked the Government to pledge continued investment in the delivery of new social homes, with at least 70,000 being built each year until the target of three million new properties is met.

A Communities and Local Government spokesman said: "We are being flexible and responsive given the current economic climate.

"We have already announced a series of measures to alleviate the current challenges in the housing market and support the vital delivery of more homes over the long-term.

"We remain committed to our overall housing target as the right long-term goal, whilst recognising the scale of the challenge this entails. However, we must remain as ambitious as possible."

He added that the Government had brought forward £400 million to boost spending power for social housing providers, including registered social landlords and councils, to deliver 5,500 more social houses over the next 18 months.