The government’s latest social housing investment boost is laughably short of the mark
On 26 June, communities secretary James Brokenshire confirmed what the government describes as “a multi-billion pound boost to social housing”.
But deeper analysis reveals that the proposals fall laughably short of the mark.
Brokenshire announced the government is investing £1.67bn in ‘affordable’ homes. This funding will cover the whole of England apart from London as the government released a similar funding plan just for the capital in March 2018. Both announcements are part of the government’s overall £9bn investment in affordable homes.
Brokenshire states that the funds will deliver 23,000 ‘affordable’ homes across England. This includes 12,500 homes for social rent in high-cost areas. Additionally, the government is making a £1bn borrowing fund available for councils to fund extra house building.
Therefore, the government has so far committed to building 27,000 new ‘affordable’ homes in London and 23,000 in the rest of England, as part of its £9bn investment in affordable housing. Of these 50,000 homes, roughly 22,500 will be for social rent, 12,500 outside of London and 10,000 within the capital. These numbers could increase if councils apply to the additional borrowing fund.
Affordable vs. Social Housing
The government’s defines ‘affordable’ housing as properties available at no more than 80% of the market rate. In some cases it can also refer to properties available for shared ownership.
These prospective homes will be built in what the government defines as areas of “affordability pressure”. These are:
where there is a difference of £50 more per week between average private sector rents and social sector rents.
This £50 per week difference works out to £217.41 per month. But research by Trust for London states that the average rent for a two-bedroom property in the capital is £1,730 per month. Therefore, an affordable rented property would be available for around 80% of that figure which is £1,384 per month. Local authorities in London rent two-bedroom social housing properties at an average of £470 per month. This means an average £914 per month gap between affordable rented and social rented housing.
That gap suggests that any new affordable rents would cost over four times the level the government itself defines as creating “affordability pressure”.
Not even close
So, not counting ‘affordable’ homes, the government has committed to building 12,500 social rented properties outside of London. This pales in comparison to the demand.
Over 120,000 people are on the waiting list for social housing in Manchester alone. And Manchester council estimates that it will see a 60% increase in people requiring homelessness help in the next 3 years.
The same is true in London. The 10,000 socially rented homes to be built wouldn’t even halve the borough of Lambeth’s waiting list, which stands at over 22,000.
Half baked commitment
Strangely, the government’s commitment to building more social housing hasn’t translated into culling the controversial Right to Buy policy. Inside Housing estimates that 40% of properties which have been purchased through the scheme are now being rented in the private sector.
The government increased the discount available for tenants to purchase their property in 2012. Councils warn this has led to Right to Buy sales growing four-fold, with 11,649 social homes sold off in England during the last year alone. This amounts to over a third of the prospective new-build social homes. And that’s just one year. If the government continues to sell off social homes at the same rate, then – even if it fulfils this latest proposal – England’s social housing stock will still be worse off.
No laughing matter
At best, the government’s announcement is representative of a body which is completely out of touch with what it’ll take to solve England’s housing crisis. At worst, it is a cynical attempt to appease calls for investment.
Either way, it is no laughing matter.
– Support the Save Our Homes LS26 campaign in their bid to thwart the prospect of eviction.
– Follow the Save Chrisp Street Market Twitter for news about their campaign against regeneration in Tower Hamlets.
Featured image via Lydia/Flickr
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