Public expenditure on housing: the shift from capital spend to housing allowances. A European trend?

This briefing explores the growing crisis of affordability across Europe in the context of a shift in public expenditure on housing, from a comparative European perspective. It shows that while there has been a shift from capital funding towards housing allowances across the EU, this shift is particularly pronounced in the UK.

17 October 2017

Key findings:

  • There is a growing affordability problem across the EU, especially among younger people and those living in urban areas, but in particular among private renters and low-income households.
  • Housing cost overburden rates  are higher in the UK than across the EU, in particular among private renters.
  • Despite the lack of affordable housing options, public expenditure on new housing development has declined across the EU.
  • Total expenditure on housing development in the EU has declined by 44%, from 48.2bn Euros in 2009 to 27.5bn Euros in 2015. 
  • Over the same time period, expenditure on housing allowances in the EU has increased from 54.5bn to 80.8bn Euros. 
  • There is been a significant shift in overall public expenditure on housing, with a growing proportion being spent on housing allowances at the expense of capital funding.
  • This shift has been particularly pronounced in the UK, where 85% of all public money on houing is spent on housing benefit.
  • The UK now has the highest per capita spend on housing allowances across the EU.