Industry News
Nearly £13 billion needed every year to end the housing crisis
N
ew research from the National Housing Federation has revealed that the Government must invest £12.8bn a year to
finally end the housing crisis in England. Over ten years, this investment would kick start a
nationwide housebuilding programme of around 1.45 million social homes for rent and shared ownership properties across the country. It would also stimulate the economy and help
more people to get on the housing ladder, while ensuring that millions of people no longer get stuck in unsuitable homes or are rough sleeping on the streets, or in hostels. The findings are consistent with the
recommendations of last year’s Shelter Commission and it provides a blueprint for the next spending review, as well as providing a funding plan for the Housing Green Paper, due out in the Autumn. A coalition of leading housing groups and
charities is calling for the Government to make this significant investment in ending the housing crisis. It includes the National Housing Federation, the trade body for housing associations, who house a total of six million people, as well as Shelter, Crisis, the Campaign to Protect Rural England and the Chartered Institute of Housing. By investing £12.8bn per year (in today’s prices)
they argue that the Government would take spending levels back to those last seen under Churchill’s government in the early 1950s, when enough homes were being built to meet the country’s needs. The coalition argues that a stimulus from the
Government is the only way to solve the housing crisis, since the private sector alone cannot build the quantities or types of homes the country needs. Over the course of ten years, this Government
investment would amount to £146bn. This would cover about 44 per cent of the total cost of construction, unlocking the rest of the money to be raised from other sources, including a lower housing benefit bill.
UNLOCKING BENEFIT SAVINGS Last year, the Government paid out £22.3bn in housing benefit, a significant amount of which went to private landlords to help cover rent for millions of low-income tenants. By moving many of these tenants into social housing, the taxpayer would save tens of millions of pounds every year. The research also found that investing in new
homes would add £120bn to the economy each year, through the creation of local jobs in construction and other industries across the country. Effectively, every pound spent by the Government would generate at least £5, boosting the economy in a balanced and sustainable way. This new financial modelling is based on
research, conducted by Heriot Watt University for the National Housing Federation and the
Over ten years, this investment would kick start a nationwide housebuilding programme of around 1.45 million social homes for rent and shared ownership properties across the country
homelessness charity Crisis, which showed that England needs to build 145,000 social homes every year for the next decade to both clear the current backlog of people who need a home and meet future demand. Last year the Government spent £1.27bn on
affordable housing, making housing one of the smallest Whitehall budgets, down 70 per cent on 2010 levels. As a result, far fewer social rented homes are being built. In 2017/18, just 5,400 were built, compared to almost 36,000 in 2010/11 before funding was cut. The under-investment in housing has led to a
huge 169 per cent increase in rough sleeping, while the number of households in temporary accommodation is at a 10-year high.
TEN YEAR PROGRAMME In addition some 1.3 million children are living in poverty, in expensive privately rented accommodation, while many young people are stuck at home with their parents, unable to build an independent life and start families of their own. Kate Henderson, Chief Executive of the National
Housing Federation, said: “The housing crisis is an economic, social and human catastrophe. But it can be solved. And now, for the first time, we know exactly how much it will cost. By investing £12.8bn in affordable housing every year for the next
decade, the Government can ensure millions of people have a stable and affordable place to live, at the same time as strengthening the economy across the country. “By investing this money in affordable housing at
the upcoming spending review, the Government can help families all across the country to flourish. They can help children get out of poverty, give young voters a foot up on the housing ladder and help out private renters who have to empty their bank account every month. “As well as being the right thing to do, investing
to end the housing crisis also carries huge economic benefits. It will advance the country’s productivity, boost its economic growth and lower the benefit bill over time.” Polly Neate, chief executive of Shelter, said:
“The steep decline in social housing is at the core of the housing emergency that now effects so many. Social homes are what this country wants and what it needs - they are the best solution to the problems we face and an opportunity to unite the country. “Charting a course to build a new generation of
social homes must be a key test for whoever walks through the doors of Number 10. The race to eradicate homelessness and provide millions with a stable home, is a race that every politician should be trying to win.”
www.housingmmonline.co.uk | HMM August/September 2019 | 5
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