England is not building enough homes. Recently released estimates of housing need show that of the 265,936 homes needed in 2015-16, only 189,650 were built – a 29% shortfall.
The greatest shortfall is in building what’s needed most: affordable housing. Our recent report found that 92% of local authorities aren’t building enough, with significant consequences for those who most need it.
Even when “affordable” homes are built, all too often people are priced out. Affordable housing has become detached from earnings, and tied to runaway market house prices. In the West Midlands and Greater Manchester, for example, where private rents are 12% below the English average, an affordable rented home would still be unaffordable to single people on low incomes.
There is still a need for genuinely affordable housing, built with subsidy and let at well below market rates.
Figures show that the number of homes built at social rent with government subsidy made up just 13% of the total affordable housing stock in the last year. This is the lowest rate since the government broadened the definition of affordable housing in 2010. This is well established, and it has been widely acknowledged that decisive action needs to be taken. But what the government has pledged so far will almost certainly fall short of what is needed to truly address the housing crisis.
Communities secretary Sajid Javid has announced that he wants make a leap forward in house building and take action against those councils that are not doing enough to build the homes we need.
It is true that in many areas there are not enough homes. But Javid is wrong to think this lack of supply is due to an absence of willing among local authorities. The Local Government Association’s housing spokesman Martin Tett argues that councils are keen to get on with the job of delivering all types of homes, including those for affordable and social rent. but says they lack the borrowing powers need to truly play their part. The chancellor should use this week’s budget to address this, by giving local authorities the means to act.
The government has already announced that it is reclassifying housing associations as private bodies, thereby freeing them to borrow. While this is a welcome step, to truly tackle the housing crisis the government must extend the right to borrow to local authorities, allowing them to invest in building a new generation of council homes.
The government’s rhetoric on tackling the housing crisis is strong, but it looks as though the budget will contain little more than tinkering at the edges.
The housing crisis is not going away, and sooner or later a government will have to take the bold action needed to address it. The chancellor should realise that local authorities are a key asset in tackling the housing crisis, and work with them to deliver the housing we need.
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