VIEWPOINT The Credit Crunch and the Housing Shortage – Time for a Radical new Approach to Building Affordable

The UK Government now relies on ‘piggy-back deals ’ with private developers to provide most new affordable housing in England. As the global credit crisis starts to bite on the real economy, this source of affordable housing is starting to dry up. A more strategic approach led by the new Housing and Communities Agency is needed. Affordable homes are a crucial part of any sustainable community and a well-functioning local housing and labour market. Social housing for rent caters for people who cannot afford, or in some cases do not want, to buy their own. Various forms of equity sharing schemes bring homeownership within the reach of households who can’t afford market prices, such as key public sector workers. In many parts of the country, and in London and the South East in particular, there is a severe shortage of affordable housing. This results in serious community tensions and economic under-performance. The long boom and housing shortages The long boom in house price growth over the past 10 years has taken homeownership out of the reach of increasing numbers of people