Cheaper homes quota 'should be cut'

Requirements for builders to include a quota of affordable homes in new housing developments should be waived, a Government-commissioned report has recommended.

The move would allow developers to create more properties for let to boost the private rental market.

But critics warned the change would come at the expense of people desperately struggling to get on the property ladder.

The review of the private rented sector by Sir Adrian Montague, chairman of private equity firm 3i, said councils should consider using powers to waive the requirement to build homes available for those on lower incomes to buy in order to increase the number of properties built to let.

It said: "Whilst desirability of affordable housing should not be ruled out, it should be weighed against the benefits already built into market rent developments, in the context of an accurate assessment of the economics of building homes to rent.

"In many cases, it will be appropriate for authorities to waive affordable housing requirements in relation to schemes for private rental, or to the private rental component of larger schemes also including an owner-occupier component."

The review also recommends setting up a task force to encourage build-to-let investment and the release of unused publicly-owned land for development.

But the report's recommendations were challenged by industry groups, councils, charities and Labour.

David Orr, chief executive of National Housing Federation, said: "While we agree that there needs to be more private market rented housing, this should not be at the expense of affordable homes."

And Shelter's chief executive Campbell Robb said the report "misses a trick" by "offering nothing for the millions of people already in the sector, paying sky-high rents and living under constant threat of eviction or further rent rises".