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19.01.17

DCLG urged to stop housing decline as 250,000 social homes could be lost

While housing has become more affordable for existing homeowners, it has in contrast become less affordable for first-time buyers – and social housing rents have been growing faster than earnings for over 15 years, experts have found.

A National Audit Office (NAO) overview of the housing market has found that housebuilding has not kept pace with need, particularly in London, while the government’s target of one million new homes by 2020 looks to be insufficient to tackle the problem.

First-time buyers and those looking to live in social housing have been disproportionately hit, as social housing rents have been increasing faster than earnings since 2001-2.

“The need for housing in England has in recent years grown faster than its supply, and housebuilding needs to increase across the country,” said Sir Amyas Morse, head of the NAO. “The government has responded to this by putting in place a range of policies to increase housing supply and home ownership.

“Central to this is an ambition to increase the supply of housing by one million homes by 2020, largely through support to private housebuilders. Delivery of this target will not require a substantial increase in current levels of house building.”

The auditor estimated that government spending on housing in England was approximately £28bn last year, with housing benefit amounting to the biggest expense at around £20.9bn in 2015-16.

Its projections suggest that at least 227,000 new households will be formed each year between 2011 and 2021, substantially higher than the annual average of 166,000 extra homes in England over the past decade.

Delivering the government’s million-home ambition by the end of this Parliament will require 174,000 net additions each year, which includes not only newly-built homes but also converted properties.

Council homes disproportionately hit

Separately, figures released by the DCLG last week showed the number of homes available at social rent dropped by more than 120,000 between 2012 and 2016. While 44,600 new homes were built for social rent over this period, many more were lost because housing providers converted them or sold them under Right to Buy.

According to Chartered Institute of Housing (CIH) research, this trend is expected to continue over the next four years. Nearly 250,000 of the cheapest rented homes could be lost between 2012 and 2020, with almost 162,000 of these coming from local authorities, while housing associations would lose a further 82,485.

Earlier this month, the government expanded its affordable housing programme with a £7bn fund in order to “turbo charge” construction. However, the CIH expects social housing to be lost due to the government’s prioritising schemes such as the sale of high-value homes and the Right to Buy scheme.

Terrie Alafat, chief executive of the CIH, stressed that to many people, social housing is the only type of accommodation accessible, hence why the loss of social housing is “extremely worrying”.

“It is positive that the government has announced new investment in housing in recent months but many of the homes which will be funded will still be out of reach to many people,” Alafat added. “If the government really wants to solve our housing crisis it must recognise that building more homes at genuinely affordable rents will be crucial to help those who need housing the most.

“We are urging it to consider how, at the very least, it can prevent this decline. We should be seeing an increase in numbers, not a significant decline.”

In its report, the NAO also suggested that the lack of housing capacity has led to a rise in homelessness, with 71,500 households in England now in temporary accommodation compared to around 48,000 in 2010-11.

But a DCLG spokesman argued that more council homes have actually been built since 2010 than under the previous Labour government.

“This government has set out the most ambitious plan for affordable housing for 40 years, with investment of more than £9bn over the course of this parliament,” he said.

The spokesman added that the government is also relaxing restrictions on grant funding to help housing associations deliver a mix of affordable rent and low cost ownership homes.

(Image c. Dominic Lipinski, PA Wire)

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