Developers are using a legal loophole to get out of building thousands of affordable homes across the country every year and Manchester has been cited as one of the worst areas in the country for the practice.

The report by Housing charity Shelter examined how ‘viability assessments’ reduced the number of affordable homes being built in 11 local authorities across nine cities in England.

The research shows that when the loophole was used in the last year, some 2,500 affordable homes (79%) were lost from the number required by council policies.

Viability assessments allow developers to reduce the number of affordable houses they build on their site, if they can show building them risks reducing their profits to below 20%.

It means many developers face no penalty for over-paying for land because they can recover the costs by reducing their commitments to building new affordable homes.

The research sampled: Birmingham, Brent, Bristol, Cambridge, Leeds, Leicester, Manchester, Newcastle, Oxford, Kensington and Chelsea, and Southwark.

But the assessments are being used right across the country so the annual figure of lost houses is likely far higher.

The worst affected areas were Manchester, Birmingham and parts of London where viability was used to reduce the affordable housing to a miniscule less than 1% of homes being built.

In the Report Shelter say that only one area performs worse than Manchester in affordable housing targets and that is the notorious Kensington and Chelsea council.

Shelter chief executive, Polly Neate, said: “What this research reveals is the scale at which developers are able to use legal loopholes to protect their profits and dramatically reduce the numbers of affordable homes available for people.

“Through freedom of information powers, Shelter has been able to reveal the extent to which affordable homes are required in local plans, only to be dropped by developers.

“The government needs to fix our broken housing system – and it must start by closing this loophole to get the country building homes that are genuinely affordable for people on middle and low incomes to rent or buy.”

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