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Housing leaders press for fund to buy private homes for social rent

Words: Huw Morris

A £1.3 billion fund to buy up private properties and convert them to social housing would massively increase the supply of homes and boost the economy, according to housing leaders.

The Affordable Housing Commission said such a fund would deliver 42,500 new social and affordable homes with the majority at social rents and generate 9,300 extra jobs. A conversion fund, to enable social landlords and community-led housing groups to buy up private rented housing as well as homes for sale on stalled sites, could mitigate the anticipated slump in prices and activity, it added.

Such an approach has been used in past recessions, including in the early 1990s through the Conservative government’s Housing Market Package. The commission said converting properties to social housing could provide a floor in some markets and help rebalance the housing system, which has become ever more reliant on private renting. Funding would be contingent on investing in a property to raise standards, which would also generate local employment.

The fund is calculated to require £1,255 million in grant but with housing welfare savings and wider benefits the net cost to government would be £623 million. The net economic benefits of increased housing, economic activity and distributional benefits would total £1,369 million over the next 30 years.

“We believe the chancellor has a great opportunity to stimulate the economy, boost jobs and tackle the housing crisis by backing plans for a national housing conversion fund,” said commission chair Lord Best. “This would bring empty and run-down properties back to life, stimulate activity on stalled sites, and assist landlords exiting the market, while addressing the acute shortage of homes at truly affordable rents.”

The commission was formed as an independent, non-partisan group of housing leaders from across the housing sector in October 2018 by the Smith Institute with the support of the Nationwide Foundation charity. 

The report is available here (PDF).