Government need to invest significantly in tackling housing crisis

Government needs to invest significantly more in genuinely affordable homes and be far bolder in its support for councils if it is to meet the ambition to deliver 300,000 new homes a year, according to a major study by the TCPA, funded by the Nationwide Foundation. 

The report has revealed appetite for innovation from councils right across the country, but also concerns from many councils about their ability to deliver genuinely affordable homes available at social-rent levels.

The research, involving a survey of 76 councils, found that social rent is the most in-demand housing tenure among over half of English councils, although in 2016/17 just 5,380 new social rented homes were built in England.2 Further to this, 80% of councils said that increasing grant levels would encourage councils to build more affordable homes, and 2/3 of councils said that lifting the Housing Revenue Account (HRA) borrowing cap would allow them to build more homes (which the government has done in the budget, although this is limited to areas with ‘high affordability pressures’).

The report makes a series of recommendations to government including calling for:

• Significantly more investment in homes available for social rent and other affordable tenures if we are to deliver the step change necessary to meet our nation’s housing need.
• Extending the budget commitment to lifting the HRA borrowing cap on councils in areas of ‘high affordability pressures’ to all authorities with housing stock.
• Enabling councils to retain 100% of their Right to Buy receipts to reinvest into building new affordable housing.

It is clear that councils can and want to do much more to tackle the crisis in affordable housing in their local authority areas, from direct delivery of social-rent homes, new local housing companies and joint ventures through to bringing empty homes back into use and supporting community-led housing.

However, without significant changes to funding for affordable housing, reform of the viability test in the National Planning Policy Framework, and capacity building, the scale of local authority innovation will be limited.

Kate Henderson, Chief Executive of the TCPA, said “The budget has failed to deliver the powers or the funding that councils need to tackle the housing crisis. If government is serious about the commitment to deliver 300,000 homes each year, then it must take the brakes off councils so that they can play a more active role in delivering the homes and communities we need. Alongside calling for a significant increase in funding for affordable housing, councils are sending a clear message to government through this research that the HRA borrowing cap should be lifted for all stock-holding authorities to help them maximise their potential as a major contributor for meeting the shortfall in the supply of affordable housing.”

Leigh Pearce, Chief Executive of the Nationwide Foundation, added “The evidence has shown that there are new approaches to enable councils to build more homes. However, many of these approaches do not meet the need for genuinely affordable homes at social-rent levels, despite most councils identifying this as the tenure that is needed most in their areas. We would like to see councils be given greater freedom by government to ensure that they can deliver genuinely affordable homes in their areas, both on their own and in partnership.”

To read the full report click here.