The prime minister has announced a further £2bn for affordable housing, with a hint that social rented units could be built using the money.
David Orr, chief executive at the National Housing Federation, says: “Today’s announcement is a watershed moment for the nation.
“In the aftermath of the tragic fire at Grenfell Tower, the prime minister said that we as a nation have not paid enough attention to social housing.
“Today, she is right to make a bold break with the past and commit to building the homes we need most – genuinely affordable homes for those on the lowest incomes.
“The additional £2bn will make a real difference to those let down by a broken housing market. Building homes for social rent will make work pay and help bring down the housing benefit bill in the long run by moving people out of costly private lets.
“Housing associations have been unequivocal about their ambition to deliver the homes the nation needs, be that homes to rent or homes to buy.
“Improved access to finance and land will see housing associations able to unleash their full potential, building on the 48,000 homes they started last year.
“Building with housing associations represents excellent value for taxpayer money; for every £1 government puts in, housing associations raise a further £6. We are ready to work with the government to deliver a new generation of genuinely affordable, high quality homes for rent.”
Terrie Alafat CBE, Chartered Institute of Housing chief executive, said: “We have been calling on the government to invest more in genuinely affordable homes for rent so the prime minister’s announcement of an extra £2bn for affordable housing is very welcome.
“As we have been saying for some time, social rents, which are significantly cheaper than market rents, are the only truly affordable option for many people on lower incomes, so the recognition that we need more of these homes is a vital step forward.
“It’s also encouraging to hear that Theresa May agrees councils have a central role to play in building the homes we need at prices people can afford.
“The details of exactly how these new homes will be funded and just how many will be for the lowest social rents will be crucial. The number of homes for social rent funded by the government collapsed from 36,000 to just over 1,000 between 2010/11 and 2016/17. Reversing this trend will be a significant task – how much of this new funding will be dedicated to building these kinds of homes?
“There is much to welcome in these announcements and they are certainly an important step in the right direction, but we still need to do more if we are to finally build the number of truly affordable homes we need.”
Trafford Housing Trust’s chief executive, Matthew Gardiner, said: “Today’s announcement is a welcome approach to solving the housing crisis in this country.
“For far too long the emphasis on homeownership has left the many families who cannot afford to own with only the expensive, insecure and poor quality offer of much of the private rented sector.
“Successive governments have ignored the fact that a well-functioning housing market needs the underpinning of a modern and adequate social housing element.
“By bringing social housing to the centre of housing strategy, and by giving the tools that local authorities and housing associations need to work together in effective partnerships, the prospects for these families are significantly improved.
“We are currently building less than 60% of the homes this country needs.
“And while we are comfortable taking a profit-for-purpose approach to help us deliver more affordable homes to the thousands of people who desperately need them, a commitment from government to support our efforts through a planned, budgeted and more joined-up policy can only be a good thing for housing associations, the wider housing sector, and the country as a whole.”
Former Lib Dem leader, Tim Farron, said: “Under the Tories, building of both social and affordable housing has plummeted.
“Since 2015, this Conservative government has overseen the sell-off of over 25,000 council homes and replaced fewer than one in three.
“Theresa May can announce all the new council homes she wants. But if this government doesn’t reform the Right to Buy by allowing local authorities to suspend it if they wish, and ensure all homes sold are replaced, this announcement isn’t worth the paper it’s written on.
“If the Tories are serious about tackling the housing crisis, May must also announce that she will ensure local authorities and housing associations can borrow the money needed to build more social housing.”
Labour’s London Assembly housing spokesperson, Tom Copley AM, said: “Those of us who have been calling for a return to mass council housing building will be studying the small print of the prime minister’s announcement carefully before we begin to celebrate.
“Just how much positive impact this will have on London’s housing crisis will depend on the detail.
“Let’s not forget that when this policy was touted earlier this year, the prime minister was promising us social rents, only for the then housing minister to say they would be at the so-called ‘Affordable Rent’ which is much more expensive.
“If the government have now decided that they are going to deliver what we actually need, which is genuine council homes at social rent, they’ve got to get serious about supporting councils to build these new homes.
“This means lifting the cap on council borrowing to build, providing meaningful grant for councils and formally scrapping the postponed forced sale of high value council homes that still hangs over local authorities.
“Instead of wasting £10bn further inflating house prices with Help to Buy, the prime minister should use that money to deliver 167,000 new social houses.
“If what the government is offering is homes at ‘Affordable Rent’ these won’t be real council homes and they won’t convince Londoners that they’re in touch with their housing needs.”
Jon Sparkes, chief executive of Crisis, said: “This announcement from the government can’t come soon enough, particularly for the hundreds of thousands of people facing homelessness right across the country.
“For years, our steady decline of social housing and ever increasing private renting costs has left many with no place to call home, and many more finding themselves on the verge of homelessness. With social housing dropping by half in the last 40 years, we can’t afford to carry on like this.
“It’s time we come together as a nation to recognise that homelessness is not inevitable, and this would be huge step in the right direction.
“Ensuring that these homes are built and that people in the most vulnerable circumstances have access to them is key to its success.
“We’re ready to work with the government to make this work for everyone who needs it most.”
Hastoe chief executive Sue Chalkley, said: “This is a welcome shift in government policy and I am delighted that attention will once more be paid to building genuinely affordable homes for those who need them most.
“However, it is crucial that this new programme does not only benefit our towns and cities. Villages need affordable homes too.
“England’s rural areas house 9.3 million people – that’s 17.6% of England’s population – but are facing a crisis of housing affordability and availability.
“Just 8% of rural homes are affordable compared to nearly 20% in urban areas, and the average rural property costs 11 times the average rural salary.
“If this drive to provide new homes only addresses urban needs, our rural communities will continue to slowly suffocate and die out as young people cannot afford to stay in the rural communities they were born or grew up in.”
Dan Wilson Craw, director of Generation Rent, said: “Under Theresa May, the Conservatives have made a welcome shift towards more state support for affordable housing and private renters, including today’s pledge on social rents. But this trickle of incremental announcements does little to address the urgent need that renters have for lower rents and stronger protections.
“Compared with the £10bn being ploughed into the wasteful Help to Buy scheme, only £2bn for social housing suggests the government is still focusing too much on the symptoms of the housing crisis rather than its causes.
“Investment in social housing would mean permanent homes for the 75,000 families in temporary accommodation and lower market rents, whereas Help to Buy will get a small minority of renters into home ownership, while pushing up prices for the rest of us.”
Angela Lockwood, vice chair of PlaceShapers, said: “Theresa May announcing a government commitment to building more affordable housing, including new social housing for rent, signals cross party support for the need to provide secure, safe homes of all tenures.
“We await full detail on how this will be achieved but the announcement of some additional funding together with certainty on rent levels to support borrowing is helpful.
“Our members are ready to help their partner local authorities in whatever ways they can to build the new homes needed across the country. We already have plans to build 88,000 more homes by 2022 but know that so much more is needed, particularly at rents that tenants will be able to afford.
“We still remain anxious about the LHA cap and urge government to resolve this as soon as possible. With this and rent certainty beyond 2020 we could really get off the blocks and deliver.”
Adam Lent, director of think-tank NLGN, said: “The prime minister’s commitment to support councils to build more houses was underwhelming. An extra £2bn for affordable housing is a start, but the scale of the crisis requires much deeper commitment.
“The borrowing cap for local authorities needs to be lifted so that they can get on and invest in building new homes for social rent immediately. Instead a new funding pot which councils and housing associations must bid for creates bureaucracy and will mean some areas win out over others.
“Today’s announcement was a missed opportunity to genuinely commit to a “rebirth” of council housebuilding that our country really needs”.
Ann Santry, Sovereign’s chief executive, said: “It was fantastic to see housing, and fixing the broken market, central to Theresa May’s conference speech today.
“Her triple pledge – extra investment, access to land and promise of future rent certainty – shows how serious government are taking the difficulties people are facing in accessing an affordable home.
“While we of course need to see the detail, housing associations and local authorities are ready to work together to build the range of homes our communities need, to rent and buy.”
Dave Sheridan, CEO of Keepmoat Regeneration (part of the ENGIE Group), said: “Action on social housing is long-awaited and desperately sought; this is a welcome announcement for both the construction industry and the 1.2m families on local authority waiting lists for a social tenancy.
“We have seen significant inroads in the provision of new housing and government funding to support first time buyers over the past few years, but what we have not seen as readily is aid for local authorities to build more homes for social rent.
“It is time to take this seriously, and address the rising number of people that live on the streets, in subpar homes or are waiting on the social housing waiting list, as the country does not have the capacity to house them.
“We look forward to working with our partners in local authorities, housing associations and registered providers to start providing more homes of varying tenure.”
Nicholas Harris, Chief Executive, Stonewater, said: “The Prime Minister’s promise today to build hundreds of thousands of truly affordable new homes across a range of tenures is great news for the many people currently struggling to afford decent housing across the country and who are stretched to breaking point to pay their mortgages and rents.
“As a major social housing provider, we support the proposals to make more funding available and the plans to build more desperately needed social housing which supports the nation’s most disadvantaged and vulnerable groups.
“This requires politicians of all parties and at all levels to work with local communities to address the need for new affordable homes.
“We welcome the opportunity to work and share our expertise and solutions with national and local government to get Britain building as quickly and cost-effectively as possible.
“By working together, we can tackle the nation’s chronic housing crisis and create the vital affordable housing which is the lifeblood of a successful economy and key to the creation of thriving and sustainable communities.”
Lovell managing director Jonathan Goring, said: “We support today’s announcement by Theresa May that increased funding will be available to councils and housing associations to deliver the new homes which are so urgently needed across the UK.
“As a developer of homes across all tenures, Lovell works with local authorities and other partners to unlock the potential of their unused sites and create high-quality homes – available for social and affordable rent and for sale – in the places where people want to live.
“We believe more flexible and creative use of public land, as well as more widespread use of modern construction techniques, have a crucial role to play in getting more homes built, delivering them more quickly and helping more people to attain the homes they desperately want.”
Brian Berry, Chief Executive of the FMB, said: “The Prime Minister’s plan is an opportunity to help shape a stronger local house building industry. If councils can start to engage with smaller, local builders to deliver this new generation of council housing, it could further help to diversify the industry.
“This would also boost the capacity of the private sector through the provision of more public sector work. Indeed, the increased use of small and medium-sized building firms will limit the problem of land banking, as this is something small builders simply don’t do.”
Lord Porter, Chairman of the Local Government Association, said: “It is good that the Government has accepted our argument that councils must be part of the solution to our chronic housing shortage and able to resume their historic role as a major builder of affordable homes.
“We hope that today’s speech by the Prime Minister signals an important shift in the Government’s housing vision and are pleased that there will be additional funding for affordable homes.
“Councils are working with communities to approve nine in 10 planning applications but it is clear that only an increase of all types of housing – including those for affordable or social rent – will solve the housing crisis.
“A genuine renaissance in council housebuilding would increase housing supply, boost home ownership and reduce homelessness.
“Every housing market is different and the only way councils will be able to significantly deliver the new homes we need is if they are given genuine powers to invest in housing that meets the needs of communities in every town and city across the country.
“This means the ability to borrow to invest in new council housing, to keep 100% of Right to Buy receipts to replace sold homes, certainty over future rents, powers to make sure developers build approved homes in a timely fashion, and adequately funded planning departments so that they can cover the cost of processing applications.”
Richard Lambert, Chief Executive Officer at the NLA, said: “The majority of landlords would agree that more social housing should be built, and it’s about time that the Prime Minister set aside a significant pot of money to do so.
“Government, society and indeed taxpayers will get better long-term value from investing in building than in subsidising rents.
“Today’s announcement should not only provide more available housing for those most in need at rents they can afford, it should also relieve the pressure on the private sector, and choke off the breeding-ground for the minority of rogues and criminals who get away with providing substandard housing and neglecting their tenants”.
Tony Lewis, Head of Policy at the Chartered Institute of Environmental Health, said: “Homes have become less and less affordable in recent decades, leading to more families becoming trapped in the private rented sector.
“The extra funding for social rent homes will help to lift people with lower incomes out of insecure and often unsafe housing conditions at the bottom end of the private rented sector.
“We therefore welcome the renewed focus on affordable housing from the Prime Minister.
“However, we would like to see more detail on all the recently announced housing policies from the Government and how these will work in practice, including whether these new homes will be genuinely affordable in relation to local average incomes.”
Brendan Sarsfield, Chief Executive of Peabody, said: “In partnership with housing associations, the GLA and councils, the government can help tackle the urgent and chronic shortage of social rented homes.
“Public investment will make it more affordable for people to rent and buy, while increased access to public land – if that is forthcoming – will allow us to build more homes more quickly. Rent certainty will also help us continue to fund more social homes ourselves.
“With more than one million people on council waiting lists for a home, the Prime Minister’s commitment to part-funding new social housing again is welcome.
“We are ready to help boost supply, help reduce the housing benefit bill, and increase prosperity in our neighbourhoods through our community and support programmes. There is much more to do, and we need to see more detail, but this is a step in the right direction.”
John O’Brien, Associate Director, Construction Innovation at BRE said:
“Following the Prime Minister’s announcement to assist local authorities through setting aside an additional £2bn on new council houses and affordable homes for rent, we need to make sure that quality remains a priority to guarantee the endurance of new homes and prevent future housing shortages.
“Turning to offsite construction and high-quality modular homes, such as the homes on the Innovation Park at BRE Watford , which can be assembled quickly and effectively and to a good quality, could be the best route for councils to turnaround vital accommodation quickly.
“We’ve been researching and developing these types of homes for a number of years and feel there are some excellent house types available that are cost-effective and highly adequate to help ease the growing housing crisis.
Mike Brown Chief Executive, bdht said: “It is excellent news that the provision of affordable housing has appeared as a key element of the Prime Minister speech to the conference and it is very good news that additional funding has been announced both in the form of £2billion additional grant backed and through rent guarantees from 2020.
“It is a clear recognition that the market economy on its own cannot solve the supply issues in the UK housing market.
“It is however only a start as addressing the issues of affordability for those trying to get a home will require a long term and consistent strategic approach to funding and land supply.”
Steve Mansour, CEO, CRL said: “While it’s good news that Theresa May has pledged further investment into fixing the housing crisis, there are a number of other factors that can prevent homes from being built as quickly as we might like.
“The industry must look at the requirements of the modern homeowner, and potentially consider alternative methods to create the necessary amount of homes, for example, prefabricated and multigenerational homes.
It is also important to take into account that basic, affordable family homes do not offer the highest return on investment, and ultimately, these are the types of houses that need to be built to address the shortfall.
“In addition, the government must support the industry and reassess current processes by cutting red tape and updating overcomplicated planning regulations.
Whilst this has partly been implemented by The Neighbourhood Planning Act 2017, more can be done to make the overall process simpler for developers to gain the necessary permissions.
This will enable a faster planning application process and help to ease the current complex and time-consuming procedures.”
Paul Butterworth, Partner and head of Social Housing, TLT, said: “There are some cautiously optimistic signs in the Government’s announcement on housing policy. Public subsidy will rise to £9bn which is a welcome increase from the current £7bn spend.
“However, this is just getting back to the previous level which the Housing and Communities Agency funded under the 2008-11 Programme.
“A subsidy of £80,000 is mooted to supply 25,000 new homes, so in theory at least the increased funding should take that to 100,000 new homes.
“This is still a long way short of the supply need.
“The funding is to be targeted to areas of acute affordability pressure and where working families are struggling with costs of rent and some are at risk of homelessness.
“The question is what the criteria will be for targeting this spending geographically.
“There is a recognition that affordable housing policy includes social rents rather than affordable rents, which should assist in taking pressure off those under pressure from welfare reform.
“It is good to see that from 2020 the rent reduction policy is being lifted for social housing rents to CPI +1% reverting to the previous position.
“What is not clear is whether the reference here to “social rent” includes affordable rents.
“In summary, the message is more encouraging but as ever the details of the policy operation will provide a better sense of how it will work in practice”.
John Carleton, executive director of property investment, Orbit said: “The announcement of an inflation-linked rent settlement for the period 2020-25 provides much needed certainty for the sector.
“This settlement also allows further capacity to deliver much needed homes.
“As a sector we already deliver around a third of all new homes each year, with a housing offer for everyone.
“Orbit was the largest developer of social homes in the sector in 2016-17, building a total of 534.
“We have a long-term commitment to ensuring all generations can live in a home they can afford – we can and want to do more and the additional £2bn funding announcement will go some way to help.
“Housing associations can play a vital role beyond fixing the ‘broken’ housing market, doing what matters most – creating thriving and sustainable communities.
“Now we must continue to forge strong relationships with local authorities and combined authorities as well as private housebuilders, as we look to utilise this extra funding and deliver the homes this country needs.”