Commission calls for 3.1 million new social homes to be built in England

Some 3.1 million new social homes are needed to solve England’s housing crisis as part of a 20 year home building programme to create affordable homes, a new report says.

It has been put together by 16 independent commissioners asked by homeless charity Shelter to look at what came be done to increase the number of affordable homes in the country.

They spent a year listening to the views of hundreds of social tenants, 31,000 members of the public and a range of housing experts and found that 1.27 million homes for those in greatest housing need are required.

It also says that 1.17 million homes for so-called trapped renters, that is younger families who cannot afford to buy and face a lifetime in expensive and insecure private renting, are needed and 690,000 homes for older private renters, people over 55 struggling with high housing costs and insecurity beyond retirement.

The commissioners argue politicians cannot remain idle at a time when half of young people have no chance of ever buying a home, private renters on lower incomes spend an average of 67% of their earnings on rent, and almost 280,000 people in England are homeless.

Commissioner Baroness Sayeeda Warsi said:

‘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 carried out for the commission by Capital Economics suggests the economic benefits of social house building would ultimately outweigh the initial costs. The programme would require an average yearly investment of £10.7 billion during the construction phase, but Capital Economics estimate that up to two thirds of this could be recouped through housing benefit savings and increased tax revenue each year.

On this basis the true net additional cost to the Government, if the benefits were fully realised, would be just £3.8 billion on average per year over the 20 year period and after 39 years the investment will have fully paid for itself.

The Capital Economics research also shows that existing products such as Help to Buy are a less effective use of tax-payers money. The commission goes on to conclude that building social homes is the only way for the Government to reach its 300,000 homes a year target.

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. A home is the foundation of individual success in life, and public housebuilding can be the foundation of national success. It is the only hope the government has of hitting its 300,000 homes a year target.

‘The Government’s budget for capital expenditure is £62 billion a year, our house building 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.’

It also calls for a new Ofsted-style consumer regulator to protect residents and to enforce common standards across social and private renting, a new national tenants’ voice organisation to represent the views of tenants in social housing to national and local Government and a new national standard to ensure enough investment in maintaining social homes and their surrounding neighbourhoods.

According to Jackie Bennett, director of mortgages at UK Finance, the recommendations in the report could provide a major boost to development activity by housing associations and local councils.

Jackie Bennett said:

‘Lenders are committed to playing their part, providing substantial levels of commercial lending and investment to support the creation of new housing association homes across the UK.

‘Our members stand ready to work with the government, the regulator of social housing, and housing associations to meet these new challenges and continue their support for long term investment in affordable homes.’

However, Richard Beresford, chief executive of the National Federation of Builders said the report does not acknowledge the role of local plans in stimulating social housing, as local authorities can work hand in glove with providers to assure them of development opportunities during the site allocation phase.

Beresford added:

‘Industry, popular opinion and economists continue to tell the Government that they must build more social homes. It’s time they listened and became the first Government in 20 years to meet very clear expectations.’

Rico Wojtulewicz, head of housing and planning policy at the House Builders Association welcomed the report.

Wojtulewicz said:

‘A major social house building programme is a no brainer. You help house those in need, stimulate local employment and business, help fix part of the broken housing market and build for the future.’

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