Real Estate

Ministers urged to back big housebuilding programme


A high-profile cross-party commission has urged ministers to embark on a government-backed housebuilding programme to deliver 3.1m new social homes in the UK over the next two decades. 

The 20-year programme would cater for the homeless and those in need of housing but also families otherwise “trapped” in private rented homes and over-55 renters, said the commission, which was formed by the housing charity Shelter. 

The 16 commissioners were brought together in the aftermath of the Grenfell Tower fire in London, which highlighted problems in the housing sector. They include Edward Daffarn, a survivor of the disaster, former Labour party leader Ed Miliband, and Faiza Shaheen, who heads Class, a think-tank that supports Labour leader Jeremy Corbyn.

But they also include prominent Conservative party figures such as Sayeeda Warsi, Jim O’Neill and Ryan Shorthouse, director of the Tory think-tank Bright Blue. The recommendations come despite a reluctance on the part of the government to commit large resources to social housebuilding in recent years. 

Lord O’Neill said: “There needs to be a profound shift to see social housing as a national asset like any other infrastructure. A home is the foundation of individual success in life, and public housebuilding can be the foundation of national success. 

“It is the only hope the government has of hitting its 300,000 homes-a-year target.” 

The programme of construction in England would cost a total of £213bn, or about £10.7bn a year, said Capital Economics, which analysed the proposals. 

But because of savings on housing benefit and higher tax revenue, the total cost would average out at £3.8bn a year over the 20 years, it said — an increase of just over 2 per cent in public sector net debt. 

The programme would break even after 39 years, according to Capital Economics. The homes would be delivered by a mixture of housing associations and local authorities; the plans assume private construction would continue at its current rate but not rise significantly. 

The recommendations come as the UK faces a housing affordability crunch. Almost 280,000 people in the UK are homeless, according to Shelter; a steep rise in rough sleeping has made the crisis increasingly visible on city streets. Meanwhile, Shelter says that half of young people have no chance of ever buying a home. 

A shortage of social housing, and corresponding rise in more expensive private renting, has added to the government’s benefits bill. Total housing benefit spending in 2018-19 is expected to reach £23.4bn, or 2.9 per cent of public spending, according to the Office for Budget Responsibility. 

The commission — which held a consultation involving 31,000 people and heard views from a range of housing groups — said its proposals would cater for 1.27m people in “the greatest housing need” but would also add 1.17m homes for families who cannot save to buy homes while paying private rents, and another 690,000 for older private renters. 

It said the proposals would represent “a decisive and generational shift in housing policy”.



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