ENGLAND is going to need social housing more than ever in the wake of the coronavirus crisis, but government investment in new homes has fallen to “dangerously low” levels.
That’s the stark warning from the Chartered Institute of Housing (CIH), with the publication today of its UK Housing Review 2020. The organisation is calling for a boost in grant funding for new social housing, not only to meet demand, but also to help mitigate any economic downturn caused by the coronavirus outbreak.
“It’s clear that one outcome from the coronavirus-related economic crisis, after household incomes and savings have been decimated, will be an even greater need for homes that are genuinely affordable,” said Gavin Smart, the CIH’s chief executive. “[But] social landlords’ finances will also be depleted, and higher levels of investment and levels of grant will be vital to build the new homes that will be required.”
There is nothing new in the need for massive investment in social housing, though shamefully many voices in the industry – save for a few ‘dissidents’ in and around the SHOUT campaign – have been silent on the matter for much of the last decade.
This has only really begun to change in the last few years, as the evidence of a critical housing need, and the worsening housing crisis, spoke volumes of the essential role the tenure can play in alleviating the situation. Steadily, this has loosened tongues, if not quite purse strings.
In 2010, when the Conservatives returned to government in coalition, capital grant for the construction for new social homes was slashed by some 60%. Over the ensuing years, ministers diverted funding into a range of schemes intended to boost homeownership – the level of which has nevertheless continued to decline – or into various forms of ‘affordable’ rented homes. These latter have become notorious for being anything but in many parts of the country.
Meanwhile, the private rented sector has burgeoned, with social housing – once the second largest tenure – slipping into a tired third place. The construction of new social housing has essentially dropped off a cliff over the last 10 years, with levels at their lowest since the second world war.
So, there has long been a pressing need for more social housing – widely regarded as the only genuinely affordable tenure for millions of households – but today’s public health emergency has added a new sense of economic urgency to the case for investment.
To meet the backlog of housing need, CIH and a coalition of housing and homelessness organisations have called for a 10-year investment programme of more than £12 billion a year to deliver 145,000 new homes annually, 90,000 of which would be at social rent.
But this requires ministers to reach for State’s wallet. While grants have risen slightly in the last two years, they review says, they now cover just 11% of housing association’s development costs, leaving the rest to be met by borrowing and surpluses. One-third of new homes are being built without any grant.
The review also shows that only 11% of new homes built in England is at genuinely affordable social rents, compared with nearly 70% in Scotland and over 80% in Wales. England, meanwhile, has lost 181,000 social rented homes since 2012 through right to buy and other causes, even taking into account new build.
“The review has analysed change in our housing system through periodic crises, most notably the global financial crisis,” said Mark Stephens, professor of public policy at Herriot Watt University, and editor of the UK Housing Review. “This year’s review records where we are after a decade of austerity and will be a vital marker for how we respond to the ramifications of the Covid-19 crisis. Our analysis of how the system changed – and in some cases did not change – after the last crisis can inform how government and housing professionals respond to this one.”
One of the review’s authors, CIH policy adviser John Perry, added: “Over the last decade we’ve seen seismic changes in the way UK housing is built, funded and occupied. The findings in UK Housing Review 2020 have clear implications for the way the sector adapts to the challenges of recovering from the current Covid-19 outbreak, continues to deliver the homes people want at prices they can afford and works with government to solve our housing and homelessness crisis.”