Evidence for large scale social house-building is clear – Government must increase investment to deliver

Sarah Rowe, Senior Policy Officer

08.01.2019

This week sees the publication of A Vision for Social Housing, the report of the commission set up by Shelter in the wake of the Grenfell tragedy. As well as identifying how social housing needs to change to respond to the concerns identified by tenants, the commission sets out solutions to the wider housing crisis in England. One of the commission’s key recommendations is the need to ‘rediscover public housing as a pillar of national infrastructure’ and deliver a very substantial increase in the scale of social housing delivery – 3 million social homes over 20 years, equivalent to 150,000 a year.  

The scale of requirements identified by the commission chimes with the findings of a study by Heriot-Watt University for Crisis and the National Housing Federation in 2018. The Heriot-Watt study quantified the scale of need for different types of affordable housing*; specifically, social rent, intermediate rent (at a discount to market rent) and shared ownership. The Shelter commission’s analysis has widened the definition of who may access social housing, encompassing those living in the private rented sector who could potentially afford (for example) shared ownership or intermediate rent. The headline message of the two reports is clear; Government must deliver a very substantial increase in the output of homes for social rent. 

The Shelter report reminds us that for over three decades after the Second World War councils and housing associations built an average of 126,000 homes a year. Last year fewer than 7,000 social rent homes were provided by councils and housing associations in England, comprising only 14% of all types of affordable homes delivered through Government programmes. It is essential that Government heeds the message of the two studies and delivers a very substantial increase in social housing investment. Recent Government decisions to allow investment in social renting once again and to free councils from controls on council house borrowing are welcome, but they do not go nearly far enough. 

Inadequate investment in homes for social rent is one of the reasons we have seen all forms of homelessness escalate, with rough sleeping doubling since 2012.  

The costs of managing homelessness have spiralled; Councils spend £1.1 billion each year on Temporary Accommodation and measures to mitigate homelessness. Without a significant increase in the supply of social housing, we will continue to depend primarily on the private rented sector to meet the needs of homeless people and low-income households. The Centre for Social Justice has estimated that unless we see investment in social renting grow substantially, the annual cost of Housing Benefit could rise from the current £9 billion a year to as much as £34 billion by 2050. The Shelter report includes cost-benefit analysis by Capital Economics and echoes the results of earlier studies commissioned by SHOUT,  demonstrating that social housing represents a prudent investment when the costs are offset against the Housing Benefit bill and wider economic benefits over the longer term. 

In June 2018 Crisis published Everybody In, setting out a long-term strategy that will enable Government to end homelessness. Building significantly more social housing is central to this, alongside measures to increase the availability of crucial support services to help people access and sustain tenancies. Investing to increase the supply of good quality social rented housing would provide the foundation for Government to deliver a cost effective, preventative response to homelessness.  

Failing to accept the wider value and long-term cost benefits of large-scale social house building will undermine the Government’s wider plans to address the housing crisis and tackle homelessness. The Crisis and Shelter plans provide clear evidence of the scale of requirements. Government needs now to put in place a strategy capable of delivering. The 2019 Comprehensive Spending Review provides an opportunity to do just that. 

*We use this term to describe all types of affordable housing.