The National Housing Federation (NHF) has warned that the delivery of new social housing could grind to a halt next year - unless the Government announces a change to the way it funds new developments through today's Pre-Budget Report.

The Federation, which represents England's housing associations, says that because of the economic downturn the supply of new, affordable housing will dry up in 2009 unless the Chancellor announces urgent changes.

Any major slowdown in the delivery of new social homes would have a devastating effect on the Government’s chances of meeting its target to deliver three million new homes by 2020.

NHF Chief Executive David Orr said: "With the economic downturn forcing private developers to build fewer and fewer homes, it would be catastrophic if we let housing association-led development grind to a halt too.


"With the number of people on housing waiting lists expected to reach the five million mark by 2010 we need to build more homes not less.

"The simple reality is that housing associations can no longer deliver homes using the financial model that has been so successful for so long.

"The Government needs to adjust to the realities of the current economic situation and raise the grant rate per new social home. It must also ensure that money feeds down to an operational level as quickly as possible.

"If the Chancellor agrees to allocate more money per home then the housing association sector could build 35-40,000 new homes in 2009. If he does not we may not be able to build any new homes at all. The situation is that serious."

Meanwhile, the NHF is also calling on the Government to use the Pre-Budget Report to end the prepayment meter rip-off and cut VAT on all energy efficiency improvements to existing homes.

Customers with prepayement meters can still pay up to £550 more than customers on the best deals available, despite usually being from the most vulnerable sections of society.

NHF Chief Executive David Orr said: "The Chancellor called for a fairer deal for prepayment meter customers in his Budget speech in March, but since then the energy companies have continued to charge the same rip off prices.

"With winter fast approaching, prepayment meter customers need the Government to stop talking, and start doing. The Chancellor must step in and compel the energy companies to lower their prepayment meter tariffs in line with those charged to customers who pay their bills on a quarterly basis."

(CD/JM)