£12.8BN NEEDED EVERY YEAR TO END THE HOUSING CRISIS
New research from the National Housing Federation reveals 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 to rent and shared ownership properties to buy across the country. It would stimulate the economy and help more buyers to get on the housing ladder, and ensure that millions of people no longer get stuck in inappropriate homes or on the streets.
Now, a coalition of housing groups and charities, including CPRE, is calling for the Government to make this significant investment as the only way to end the housing crisis, since the private market 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, including inflation. This would cover about 44% of the total cost of this construction boom, unlocking the rest of the money which can then be raised from other sources.
The research also finds that investing in new homes would add an additional £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.
It would also reduce the Government’s benefit bill over the course of the decade. Last year, the Government paid £22.3bn in housing benefit, a significant amount of which went into the pockets of private landlords to help cover rent for millions of low-income tenants. By moving many of these tenants into social housing, the Government would need to spend less on housing benefit over time, and so could save taxpayers tens of millions of pounds every year. This would also allow more people to build a solid foundation for their lives in social housing, aiding social mobility.
This new financial modelling is based on research, conducted by Heriot Watt University for the National Housing Federation and the homelessness charity Crisis, which showed that England needs to build 145,000 social homes every year for the next decade to 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 government budgets, down 70% 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 chronic under-investment in housing has led to a 169% increase in rough sleeping, while the number of households in temporary accommodation is at a 10-year high. What’s more, 1.3 million children are currently 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.”
Crispin Truman, Chief Executive at the Campaign to Protect Rural England, said: “Everyone needs a secure, stable and affordable place to live, but right now there are more than 170,000 families in rural communities, who are on social housing waiting lists. At the current rate of building, it would take 130 years just to meet this backlog.
“Just like our towns and cities, communities in the countryside need a healthy mix of homes in order to prosper, including homes for social rent. These offer long term stability to families on lower incomes in rural areas, where life is more expensive and work can often be insecure and seasonal. They allow people to put down roots and plan for the future.
“Councils and housing associations can play a key role in building the homes the nation needs, but only if they are properly funded. This investment in homes for social rent and other low cost tenures would help to guarantee the future prosperity of our rural communities, and society as a whole.”