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Government must focus on affordability to fix broken housing market, says CIH

England will have lost 230,000 social homes by 2020, the Chartered Institute of Housing (CIH) has predicted.

In just five years, over 150,000 of the most affordable rented homes have already been lost across the country, an analysis by the institute has revealed.

The CIH is arguing that if it is to fix the country’s broken housing market, the government must focus on affordability as well as building more homes.

According to the institute, funding for social rent, which is usually around 30-40% cheaper than market rents, was cut by the coalition government in 2010, instead targeting funding towards “affordable rent” homes, which can be up to 80% of market rents.

Most of the losses have been due to homes being converted to “affordable rent” or sold through the Right to Buy scheme, with some being demolished, the analysis claims.

Terrie Alafat, chief executive of the CIH, explained that for those on lower incomes, the only affordable option is often social rent: “It is simply unacceptable that we are losing so many of our most affordable homes at a time when more and more people are in need.”

Referring to Theresa May’s pledge to prioritise housing, she added: “The prime minister is absolutely right to make housing a priority, and some of the things the government is doing will help.”

Last year the PM announced plans to invest an additional £2bn in affordable housing, and the Budget promised to deliver 300,000 new homes a year.

However, Alafat said that the government’s investment is still heavily skewed towards the private market, with the institute’s analysis finding that 79% of the housing budget up to 2020-21 is directed at private housing.

“Rebalancing this budget, so that more money is spent on affordable homes, could make a big difference,” she added.

Commenting on the effect of the Right to Buy scheme, Alafat said that it is “undermining efforts to provide genuinely affordable homes for people on lower incomes.

“We think local authorities should be able to keep 100% of the money they receive from sales, rather than having to hand some over to the Treasury, as is currently the case.

“The government could also give councils more time to use the receipts.”

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