Minister confirms social housing investment boost

A multi-billion pound boost to social housing across England has been confirmed by Secretary of State for Communities, The Rt Hon James Brokenshire MP.

Around 23,000 new affordable homes will be delivered through a £1.67 billion government investment deal. This will include at least 12,500 social rent homes in high cost areas in a move to support families struggling to pay their rent.

Although the announcement was widely welcomed, many also pointed out that the funding allocation would not sufficient to make up the significant shortfalls in housing stock and more still needed to be done.

The move is part of the government’s £9 billion investment in affordable homes, £1.67 billion of which was announced in March 2018 for London. This latest funding will deliver homes across the rest of the country.

Responding to the Housing Revenue Account borrowing programme prospectus, Cllr Martin Tett, Local Government Association Housing spokesman, said: “The LGA has been clear that councils must be given greater freedom to borrow to build desperately-needed new homes in their local areas and play a leading role in solving our housing shortage.

"(This) announcement is a positive step in the right direction towards triggering the renaissance in council housebuilding that we urgently need to ensure more affordable, secure and stable homes for everyone.

“The next step for the Government now is to accept the calls of the LGA and the influential Treasury Select Committee to scrap the cap on council borrowing in every community across the country. This would free councils to make the investment decisions that will boost housebuilding in their local areas unencumbered from rules and regulations created in Whitehall.

“It is generally accepted that the country needs to build 300,000 homes a year to keep up with demand. The last time this country built the amount of homes it needs each year, councils were responsible for 40 per cent of them.

“For councils to be able to resume their historic role as a major builder of affordable homes, we need to see initiatives that support housebuilding in local communities – that means borrowing to build with no added restrictions, keeping 100 per cent of receipts from Right to Buy sales and granting greater flexibilities on Right to Buy discounts to local communities.”

And RIBA President Ben Derbyshire described the announcement as a welcome boost, and that it was pleasing to see that progress is being made on delivering new homes for social rent.

"The Secretary of State and the Treasury are to be commended for listening to calls for investment in social housing from across the country – but £1.67 billion investment to build 23,000 new affordable homes will not solve the UK-wide problem," he added.

"We know that investing in thoughtfully designed and well-built new homes is one of the best long-term investments the public sector can make, but we will only see the scale of investment we need if Mayors and Councils are given powers to borrow to build. While we welcome today’s announcement, the stark truth remains that the housing crisis will not be solved without major direct investment by the Government, who must release funds for local authorities across the UK.”

The Communities Secretary also heralded a new generation of council housing by inviting local authorities to bid for a share of £1 billion extra borrowing to build much-needed homes. This £1 billion borrowing cap raise will be split equally between London and the rest of England.

Local authorities have requested this extra financial flexibility, which will be allocated to those in areas with the highest affordability pressures to ensure homes are built where they are needed most.

These new measures are part of the government’s ambitious plans to build 1.5 million new homes by 2022 through planning reform and targeted investment.

The Rt. Hon James Brokenshire MP, Secretary of State for Communities, said: "The government has ambitious plans to fix the broken housing market and build the homes our communities need.

"(This) announcement is a further milestone. It will secure the delivery of an additional 23,000 much-needed affordable homes as well as paving the way for a new generation of council houses.

"The majority of these new homes will be in high cost areas helping to ease the burden of rent on hard working families and delivering stronger communities."

A bidding process will now begin for both programmes, with successful bids for the affordable homes funding notified throughout the year. A list of successful councils who have had their borrowing caps increased will be announced in due course.

But Lois Lane, Research and Policy Advisor at the Campaign to Protect Rural England, said rural communities are in danger of being left even further behind and added: "For those struggling to find a home that they can afford to live in, this new fund is simply not enough.

"The scale of the challenge is enormous and this investment will provide only 23,000 new ‘affordable’ homes, of which just 12,500 will be for social rent.

"With more than one million families on social housing waiting lists in England, this barely scratches the surface of the problem. We urgently need new social housebuilding programme that will deliver on a significant scale, with properly proportioned grant funding for rural areas.’"

CPRE are calling for:

• further substantial investment in social housebuilding from the government;
• a proportion of grant funding for use in rural areas to be ring-fenced in line with the proportion of the population living there;
• a commitment to for social housing to be prioritised over market housing.