Rent Reduction 'Will Lead to 14,000 Fewer Homes Built'

The government’s policy of reducing social rents by 1% annually over the next four years will lead to 14,000 fewer homes being built. That is the forecast from independent fiscal watchdog Office for Budget Responsibility following the Budget. George Osborne announced that social rents will reduce by 1% annually over four years. The OBR said the measure, which comes into effect next April, will ‘directly reduce social landlords’ rental income, and therefore their financing for, and returns to, investing in new housebuilding’. Because of this, the OBR has reduced its forecast for residential investment by 0.7%. It says housebuilding by housing associations will drop by around 4,000 homes in 2019/20 and 14,000 over five years. Download the latest economic and fiscal outlook from the OBR website.