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Social housing starts still sparse

Sector expected to remain subdued as effect of private housing market crisis lingers

The outlook for social housing in 2009 is uncertain. The value of underlying planning approvals fell by 24 per cent during 2008 and has weakened further since the January. The decline in the value of approvals appears to have had an immediate impact on project starts during the first four months of 2009 and will continue to limit work opportunities.

The NHBC has also recorded a drop in the number of applications for social sector homes, which were 6 per cent down on 2007.

In contrast, the DCLG recorded a 20 per cent rise in the number of English social housing starts last year, although starts appeared to lose momentum during the final three months of 2008.

Government commitment to social housing hopes to increase the number of new social rented houses by 50 per cent to 45,000 units per year over the three years to 2010/11, with a goal to reach 50,000 homes per year in the next spending review period.

Over the last eighteen months, private sector housing developments have declined, so has the promised affordable housing element in the schemes. In addition, new social housing projects are often part of a wider regeneration programme involving a significant private sector element. Glenigan analysis suggests these have ground to a halt as the credit crunch and falling capital values have undermined their commercial viability.

The sharpest falls in the value of projects starting during 2008 were seen in Wales, Yorkshire and the Humber, and the North West of England. In contrast, the East Midlands saw a doubling in the value of underlying project starts.

Near term, the new social housing sector will continue to suffer from the fall-out from the private housing market as the flow of mixed-use developments and projects part-funded through section 106 agreements remains sparse.

Glenigan expect project starts to recover from their recent lows, they are forecast to remain 23 per cent down on a year ago for 2009 as a whole. A more substantial improvement in project starts is not anticipated until 2010.

Project Focus: Cardiff Urban Village

Client: Welsh Assembly Government (0845 010 3300)

Architect/planner:Savills Hepher Dixon Ltd (Andrew Cox, director, 029 2036 8920)

Schedule: Work is due to start in July 2011 and will last for 26 months

Value: £100m

Details: Scheme comprises construction of a two to four storey, mixed use development of up to 900 dwellings including 80 live/work units and affordable housing, 4,000 sqm of office, 500 sqm of retail and 1,000 sqm of community uses. Works include public open spaces, infrastructure with roads, sewer system, enabling works and landscaping and a railway station on the Cardiff to Valleys line. The scheme will be one of the largest brownfield redevelopment some 60 hectares.

Recent News: Expressions of interest are currently being sought - the time-limit for the submission of applications is 8 July, 2009.

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