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08/01/2019

Commission calls for 20-year social housing programme

Words: Laura Edgar
Housebuilding / iStock

A call has been issued today (8 January) for the government to build 3.1 million new homes over a 20-year period. The programme would extend the offer of social housing to more people.

The 3.1 million homes includes 1.27 million homes for those in greatest need, such as those who are homeless, living with a disability or long-term illness or living in poor conditions.

Trapped renters would also be provided for, with 1.17 million homes designated for younger families who cannot afford to buy. The remaining 690,000 homes would be for older private renters, such as people over 55 who are struggling with high housing costs and insecurity beyond retirement.

The plans form part of a report published by Shelter’s social housing commission, which was formed after the Grenfell Tower fire. The commission comprises 16 independent commissioners, who say politicians cannot remain idle at a time when half of young people don’t have a chance of buying a home, private renters on local incomes spend on average 67 per cent of their earnings on rent, and there are almost 280,000 homeless people in England.

Commissioner Baroness Sayeeda Warsi warned: “Social mobility has been decimated by decades of political failure to address our worsening housing crisis. Half of young people cannot buy, and thousands face the horror of homelessness. Our vision for social housing presents a vital political opportunity to reverse this decay. It offers the chance of a stable home to millions of people, providing much needed security and a step up for young families trying to get on in life and save for their future. We simply cannot afford not to act.”

Analysis by Capital Economics on behalf of the commission found that the economic benefits of social housebuilding would ultimately outweigh the initial costs. The construction phase of the programme would require a £10.7 billion investment; Capital Economics estimates that up to two-thirds of this could be recouped through housing benefit savings and increased tax revenue each year. If this were realised, the net additional cost to the government would be £3.8 billion a year over 20 years, with the investment paid for after 39 years.

Commissioner Lord Jim O’Neill said there needs to be a “profound shift” to see social housing as a national asset like any other infrastructure because public housebuilding is the only hope the government has of hitting its target of 300,000 homes a year.

“The government’s budget for capital expenditure is £62 billion a year – our housebuilding programme would cost only a fraction and is well within its financial reach. With current spending on housing benefit shockingly inefficient, it’s not hard to see what an investment in bricks and mortar could do to help solve the housing crisis and boost our economy.”


Other recommendations in the report:

  • Government should ensure that the Right to Buy scheme is sustainable and that any social housing sold is replaced.
  • Government should reform the Land Compensation Act 1961 so that landowners are paid a fair market price for their land, rather than the price it might achieve with planning permission that it does not actually have. This could be achieved by:

-    Amending Section 14, so that no account is taken of any prospective planning permission in land designated by local authorities or city regions for infrastructure including housing; and

-    Amending Section 17 so that certificates of appropriate alternative development cease to apply in those areas designated by local authorities or city regions for development.

  • The government should specify the need for social housing in future housing assessments.
  • The government should increase resources for local enforcement to tackle rogue landlords and poor conditions, in line with the growth in the number of private rented properties.
  • The government should remove the exemptions that mean Section 106 rules do not always apply to new developments and conversions.
  • The government should embrace modern methods of construction in a way that reduces risk and builds public confidence, using methods that are proved to work over the long term.
  • The government should create a new regulator to protect social renters and ensure that their voices are heard.

Reaction:

Kate Henderson, chief executive at the National Housing Federation (NHF), said: “This is a landmark report from Shelter, and we are encouraged by the overwhelming public support for social housing they have uncovered.”

She said the commission is right to recognise that social housing is a “crucial” national asset that needs to be properly invested in, and it “will more than pay for itself in the long term”.

“We also need to fundamentally reform the way land is bought and sold, making it cheaper for organisations that want to build social housing. Only then can we build enough houses so that everyone can have the home they need at a price they can afford.”

Henderson added that the NHF supports the call for a national voice for tenants.

Martin Tett, housing spokesman for the Local Government Association (LGA), said there is an acute need to address the housing crisis, but only by “triggering a renaissance” in council housebuilding can long-term reforms help make homelessness a thing of the past and remove housing insecurities for current and future generations.

“The last time we built enough homes, councils built 40 per cent of them. We need to get back to those levels if we’re to tackle our housing crisis, building a new generation of at least 100,000 high-quality social homes a year.

“However, every housing market is different and resolving the challenge must mean allowing every council to ensure that new and existing social housing best meets local need. Critical to this goal will be allowing councils to keep 100 per cent of their Right to Buy receipts and to set discounts locally.”

Félicie Krikler, director at Assael Architecture, said: “A government-backed house building programme of this scale would help remedy many of the challenges currently facing the British social housing market. By pursuing a build-out initiative that delivers over 3 million social homes over the next 20 years, the recurrent issues around the availability and affordability of social housing could be dramatically improved for millions. Such a bold policy proposal, however, must go alongside an equally bold commitment to high quality design and management. As we know, the success of projects lies in the local governments’ commitment to maintain and uphold developments long after their completion with any large-scale house building programme extending far beyond the literal construction of homes, to include community engagement from the outset, guidance around good design and material quality, as well as an ongoing maintenance strategy to ensure the success of each and every development.”


Image credit | iStock

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