This report estimates the subsidy required for housing associations and local authorities to build the social homes required to meet housing need over the decade from 2021. It does so by modelling the costs and funding for such a programme at local level across England.
- To meet housing need in England over the decade from 2021, it will be necessary to build 145,000 social homes each year, including 90,000 for social rent.
- To meet social housing need will require an average of £14.6bn in capital grant from Government each year for ten years (£12.8bn per year in today’s prices), to unlock a total housebuilding programme worth £46.2bn per year on average. For the grant-funded homes, this grant would cover 44% of total scheme costs.
- Predicted build cost inflation and the limits of the cross subsidy model both necessitate higher grant levels than have been available in recent years. In addition, the size of the proposed programme, the high proportion of social rent homes, and the geography of need are all key cost drivers.
- Building this number of homes per year for 10 years could significantly reduce homelessness and rapidly reduce poverty amongst families currently living in the private rented sector. It would deliver substantial economic benefits across the country, and unlock productivity improvements across the homebuilding sector. Given the pressures facing the housing market, it is also the only route to reaching the Government’s target of building 300,000 homes per year.
- Investment on this scale would represent a return to previous high points in social housing spend. In today’s prices, the investment called for here is only slightly above the £11.35bn spent in 1953, which delivered a record output of more than 200,000 council homes. Until 2008 the public grant available for social housing as a proportion of total scheme costs had remained around or above 50% for several decades.
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