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Government-funded affordable housing down by 50%

Words: Laura Edgar
Affordable housing / Shutterstock_509223637

The number of affordable homes funded by the government fell between 2010/11 and 2016/17, with the level of funding for the affordable housing far less than for private housing, according to the Chartered Institute of Housing (CIH).

Analysis by the institute suggests that the government is set to spend 79 per cent of its housing budget – £32 billion – on programmes such as help to buy up to 2020/21, with the remaining 21 per cent - £8 billion – to go on schemes like shared ownership and affordable homes.

The analysis forms part of the CIH’s 2017 UK Housing Review.

Figures from the Department for Communities and Local Government (DCLG) suggest that only 28,000 affordable homes were built in 2016/17, down 50 per cent from 56,000 in 2010/11, said the CIH. The number of homes built for the cheapest rents using government investment fell from 36,000 to just over 1,000.

The institute notes that the government no longer funds homes for social rent, which are marketed at 30-40 per cent cheaper than market rent. Instead funding goes towards affordable rent, around 80 per cent of market rent.

The CIH says ministers’ focus must be on affordability as well as building more homes in order to “fix the country’s broken housing market”.

Terrie Alafat CBE, chief executive at the CHI, said: “People on lower incomes are finding it increasingly difficult to make ends meet as they experience the impact of stagnant wages, rising inflation and welfare reform cuts. These factors and the shift towards ‘affordable rent’ all mean that housing is becoming increasingly unaffordable in many parts of the country.”

She said it is not just about building more homes, but also about building more homes that are affordable for people on lower incomes, and she urged the government to “look at rebalancing the housing budget and investing more in genuinely affordable homes for rent”.

”The November Budget gives the government a golden opportunity to rebalance investment away from the private sector towards affordable housing without having to increase its overall commitment to housing.”

Tom Dacey, chief executive of Southern Housing Group, said the analysis demonstrates the need for a comprehensive evidence-based housing policy that truly addresses the issue of affordability.

CIH policy adviser John Perry added that a “glaring investment priority” is the need for greater investment in the existing housing stock.

“Not only has the Decent Homes Standard not been updated for a decade, but resources for keeping homes up to the standard are being eroded.”

2017 UK Housing Review can be found on the CIH website (pdf).

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