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Midlands housing association to cut back on construction

Housing association Midland Heart has revealed plans to scale back its building programme by up to 80 per cent following the cuts announced in the Comprehensive Spending Review.

The housing association, which manages 32,000 homes in the region, admitted it would have to review its plans after chancellor George Osborne announced that the country’s social housing budget would be slashed over the next four years.

Midland Heart chief executive Tom Murtha told the Birmingham Post: “We are certainly planning a major reduction in our capital programme that will see our current output of 500 homes a year reduced to 100.”

Mr Murtha criticised the government’s plan to fund social house building by allowing housing associations to increase rents to a maximum of 80 per cent of the market rate.

‘‘If you look at the figures then it is a calculation that only really works in London. It would seem the minister has done work with London-based organisations because further north where there is not a huge gap between rent levels, the opportunity to raise revenue is just not there. There is no doubt that under these proposals, London will gain and Birmingham will lose.”

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