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Councils call on Hammond to address huge discrepancy in affordable housing

A lack of affordable housing is leading to councils spending £2m a day on temporary accommodation for homeless families, a report by the LGA has warned. This revelation also comes just after the Chartered Institute for Housing (CIH) published its own review of the crisis facing the UK’s property market which announced that only £8bn of the £51bn that will be spent on housing up to 2021 will be used to build directly affordable homes.

The two reports together create a bleak picture of a market which is currently unaffordable for many low-income families, and have prompted both organisations to call on the government to do more to address the gap in affordable housing.

In its report, the LGA published figures saying that the number of affordable homes built in 2015-16 fell by a huge 52%, down to the lowest number in 24 years.

Due to this lack of affordable property, it was also found that councils were forced to place 50% more families into temporary accommodation since 2010, a measure which is putting further financial pressure on local authorities who are already struggling with tough budgets and a deepening gap in adult social care funding.

LGA chairman Lord Porter responded to the review by calling on the chancellor to temporarily lift the Local Housing Allowance freeze to help ensure the provision of accommodation for vulnerable families who were at risk of becoming homeless.

Lord Porter said: “Homelessness is spreading across all areas of the country. Funding pressures are combining with a lack of affordable housing and private sector rents rising above household incomes to increase homelessness.

“It is also leaving many councils struggling to find suitable accommodation for those in need, particularly those who are young, vulnerable, or with families.” 

He added: “With councils continuing to face huge financial pressures, it is unsustainable for them to have to spend £2m a day to house vulnerable people at the sharp end of our housing crisis.

“Councils would much rather invest this scarce resource in building new affordable homes and preventing homelessness happening in the first place.”

Lord Porter reiterated the call that councils needed a “renaissance in housebuilding” and a clear plan to solve the housing crisis and reduce homelessness whilst also saving local authorities money through a reduction in the bill being paid to housing benefits.

He concluded: “Communities across the country need a new deal with the chancellor that gives councils the ability to borrow to invest in housing and to keep 100% of the receipts from any homes they sell to replace them and reinvest in building more of the genuine affordable home they desperately need.”

By the same note, CIH’s report also come as a stark reminder of how far the housing crisis has deepened over the last five years, as the discrepancy in the government’s commitment to affordable homes could risk homelessness rising further by 2021.

Terrie Alafat CBE, the CEO of CIH, said that though the government had shown “genuine commitment” in recent months to tackling the housing crisis, more work was still required to improve the current situation and build new affordable homes for rent and sale.

Alafat said: “We are concerned if the current imbalance in housing funding continues this ambition will simply not be possible.

“The government has rightly identified a need to build more genuinely affordable homes for the many people who cannot currently access a decent home and we have seen some very positive moves to get us building the number of homes we need.

“Too many people still currently have no option but to rent in an increasingly expensive private sector, where they are now regularly spending more than half of their wages on housing costs.”

She added that though some of the infrastructure and other funding may indirectly support the building of affordable homes, it was also clear that the government needed to go even further to address the imbalance in funding to ensure that the level of direct support for the building of new genuinely affordable housing reflected the desperate need for cheaper accommodation.

Alafat went on to say: “We fear the current balance of direct support will mean it is not possible to build the genuinely affordable homes for rent and sale which we so desperately need.

“We would urge the government to use the budget as an opportunity to address this to ensure its ambition to tackle the housing crisis can become a reality.”

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