Grant levels need to rise to pump-prime social housing investment

UK Housing Review 2020 shows grant levels for new social housing in England have fallen dangerously low and will need to rise to boost investment in response to the economic downturn caused by the coronavirus outbreak.

While grants have risen slightly in the last two years, they now cover just 11 per cent of housing association’s development costs, leaving the rest to be met by borrowing and surpluses. One-third of new homes are being built without any grant.

The review also shows that only 11 per cent of new homes built in England is at genuinely affordable social rents, compared with nearly 70 per cent in Scotland and over 80 per cent in Wales. England has lost 181,000 social rented homes since 2012 through right to buy and other causes, even taking into account new build.

To meet the backlog of housing need, CIH and a coalition of housing and homelessness organisations has called for a ten-year investment programme of more than £12 billion a year to deliver 145,000 new homes annually, 90,000 of which would be at social rent.

These are some of the post-CV19 outbreak questions raised by the data in this year’s review, which was published by the Chartered Institute of Housing this morning.

CIH’s annual publication is packed with statistics and analysis about housing, households and welfare benefits across the UK and internationally, making it the prime source of information and analysis for all concerned with housing policy and finance.

This year’s review features chapters by leading analysts including:

  • an overview of housing supply in the UK, looking at how it has evolved across the private sector and the two parts of the social sector
  • a review of the funding of UK housing associations and how it has changed and continues to adapt in response to new circumstances
  • lessons we can learn from Europe, in particular from the housing systems in Sweden and Germany
  • analysis of recent comparative statistics on affordable housing across the four UK countries produced by the Office for National Statistics

The review also has 200 tables covering a wide range of housing data relating to tenure, social housing stock, housing expenditure, and the private rented sector.

CIH chief executive Gavin Smart said:

It’s clear that one outcome from the coronavirus-related economic crisis, after household incomes and savings have been decimated, will be an even greater need for homes that are genuinely affordable. Social landlords’ finances will also be depleted, and higher levels of investment and levels of grant will be vital to build the new homes that will be required.”

Review editor Mark Stephens, professor of public policy at Herriot Watt University, said:

The review has analysed change in our housing system through periodic crises, most notably the global financial crisis. This year’s review records where we are after a decade of austerity and will be a vital marker for how we respond to the ramifications of the CV-19 crisis. Our analysis of how the system changed – and in some cases did not change – after the last crisis can inform how government and housing professionals respond to this one.”

CIH policy adviser John Perry, one of the review’s authors, said:

“Over the last decade we’ve seen seismic changes in the way UK housing is built, funded and occupied. The findings in UKHR 2020 have clear implications for the way the sector adapts to the challenges of recovering from the current CV19 outbreak, continues to deliver the homes people want at prices they can afford and works with government to solve our housing and homelessness crisis.”