Government claims backlog will fall as it funds conversion of 4,000 houses to rented property

The number of unsold housing association homes has hit a peak of more than 10,000, a senior government official has claimed.

Marsh: Hopes associations will increase build programmes
Marsh: Hopes associations will increase build programmes

Peter Marsh, chief executive of regulator the Tenant Services Authority (TSA), said: “Most people reported a stronger January than pundits predicted. We expect the number [of unsold homes] will fall.”

The news comes as the government has paid for nearly 4,000 shared ownership homes to be converted into rented property to reduce the backlog of unsold social houses.

Many of the houses, which were earmarked for shared ownership, will now be rented at social housing or intermediate rates after their owners received extra subsidy from the Homes and Communities Agency (HCA).

Figures published this week by the TSA show that 10,060 housing association homes, worth about £707m, are still unsold, 4,560 for more than six months, up by 405 from November. The figure includes the homes converted from sale to rent.

The TSA said the conversion of unsold homes to rent had helped stop the backlog growing further.

The sector sold 3,868 homes in the last quarter of 2008, generating £272m. Associations are expecting to make £1.3bn from sales of low cost homes and other assets over the next year.

Marsh said he hoped that associations would begin to increase their build programmes, particularly for social rented homes, once they had reduced the number of unsold homes.

Meanwhile sales of new homes rose slightly in January compared with December.

Figures gathered for Building by the NHBC showed average daily sales up from 348 in December to 367 in January.

Stephen Stone, chief executive of Crest Nicholson, said: “It’s too early to form a firm view, but in January and the first two weeks of February it has not deteriorated any further.”

David Eastgate, chief executive of housing association Hyde, said the major London associations had all reported higher footfall in showrooms offering shared ownership homes for sale but completions were taking longer.