Government urged to centre housing funds on affordable homes

27 Jun 18

The government must refocus its housebuilding spend on affordable homes and suspend the right to buy scheme, according to the Chartered Institute for Housing.

A CIH report, published on 26 June, noted that 79% of the government’s £53bn housing budget up to 2020-21 was directed towards the private market, with just 21% going to affordable housing.

CIH analysis found that since 2012, England has lost 151,000 of homes offered at the lowest social rents.

The report said: “This is through a combination of sales to sitting tenants who have the right to buy, converting vacant homes from social rents to ‘affordable’ rents at up to 80% of local market rates, and demolition.”

The CIH said it expects a further 230,000 social homes to be lost in England by 2020.

It called on the government to suspend right to buy in order to stem this loss of affordable homes.

Terrie Alafat, chief executive of CIH, said: “We can only truly start to tackle the chronic shortage of affordable housing in this country by putting social housing at the centre of government plans to solve the housing crisis.”

The CIH recommended that social housing rents should be linked to local incomes.

“Yes the government needs to make some big changes but landlords must step up and take action in a number of areas without waiting to be told what to do. The sector must own its future” Alafat added.

The report coincided with confirmation from housing secretary, James Brokenshire, that the government would allocate £1.67bn to deliver 23,000 affordable homes, of which 12,500 will be for social rent. Councils will be invited to bid for this funding.

Councils can also bid for a share of £1bn extra borrowing, and this borrowing cap raise will be split equally between London and the rest of England.

The bidding process is explained in the Housing Revenue Account Borrowing Programme paper.

Brokenshire called the funding a “milestone” that would pave the way for a “new generation” of council houses.

He said: “The majority of these new homes will be in high cost areas helping to ease the burden of rent on hard working families and delivering stronger communities.”

Martin Tett, the Local Government Association housing spokesman, said the announcement would trigger a “renaissance in council house building”.

He added: “For councils to be able to resume their historic role as a major builder of affordable homes, we need to see initiatives that support house building in local communities – that means borrowing to build with no added restrictions, keeping 100% of receipts from right to buy sales and granting greater flexibilities on right to buy discounts to local communities.”

Earlier this week, a new centre right think-tank called for councils to be given more power to buy and develop land for housing.

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