Top sector voices say £12.8bn of investment a year is now needed to tackle the housing crisis – and tell government that would be money well spent.
With Housing 2019 underway, the NHF has released research reinforcing the 10-year potential of such investment to kickstart the building of around 1.45m homes for social rent or shared ownership.
Now, a coalition of leading housing groups and charities is calling for the government to make such investment real – this includes the NHF, Shelter, Crisis, CPRE, and the Chartered Institute of Housing.
Collectively, the coalition argues that, by investing £12.8bn per year (in today’s prices), the government would take spending levels back to those last seen under Churchill’s government in the early 1950s, when enough homes were being built to meet the country’s needs.
“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,” said NHF chief executive Kate Henderson.
“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,” she said.
Her CIH counterpart, Terrie Alafat CBE, said: “Our national housing crisis is spiralling out of control and demands urgent attention. It creates a terrible cost in terms of both social instability and wasted money.
“But this research shows it doesn’t have to be like this.
“There is a solution, a solution that would add billions to our national economy and help millions of our fellow citizens build stable lives and strong families in sustainable communities.”
The coalition’s case is that over the course of 10 years, the government investment would amount to £146bn, including inflation, covering 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 £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.
There is scope, too, to cut the 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, the coalition says, 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 NHF and the homelessness charity Crisis, which showed that England needs to build 145,000 social homes[i] every year for the next decade to both 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.[ii]
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.
Some 1.3 million children are currently living in poverty in PRS accommodation.
“Charting a course to build a new generation of social homes must be a key test for whoever walks through the doors of Number 10,” said Shelter chief executive Polly Neate.
“The race to eradicate homelessness and provide millions with a stable home is a race that every politician should be trying to win.”