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A new report by the Resolution Foundation has urged the UK government to adopt a revised funding and policy approach to achieve its goal of delivering the largest council and social housing programme since the Second World War. The think tank has recommended directing the government's long-term housing funding exclusively towards social rent homes, easing social housing obligations for private developers during weak market conditions, and offering low-cost loans to housing associations. It said these measures could modestly increase the supply of low-rent homes, although significantly higher public investment would still be required to address the country's housing shortage.
The Resolution Foundation has urged the UK government to adopt a different strategy alongside increased funding if it is to fulfil Prime Minister Andy Burnham's commitment to deliver the country's largest council and social housing programme since the Second World War.
In a report released over the past week, the think tank said the government should redirect existing housing grants towards council and social rent homes while providing greater flexibility to private housebuilders. It recommended allowing developers to build fewer social rent homes, which are comparatively expensive to deliver, during periods of weak buyer demand, while encouraging the construction of more affordable rental homes instead.
The report also proposed providing low-cost loans to housing associations through the National Housing Bank to support the delivery of affordable housing projects.
Among its key recommendations, the Resolution Foundation said the government's 10-year Social and Affordable Homes Programme, valued at GBP 39 billion, should be used exclusively to fund social rent homes. It also proposed establishing a GBP 2.5 billion low-cost loan facility through the National Housing Bank to encourage housing associations to increase affordable housing construction.
According to the think tank, these measures could raise annual construction of low-rent homes to around 66,000 units, representing an increase of between 1,000 and 3,000 homes each year. However, it noted that this would remain well below the levels achieved during the post-war period, when local authorities were delivering around 100,000 homes annually.
The report added that a substantial increase in affordable housing supply would require additional public funding beyond the proposed policy changes.
Burnham has pledged to increase the availability of council housing and social rent homes as part of efforts to address the country's housing shortage, reduce homelessness and lower long-term welfare costs. Social rent homes generally offer rents that are around 50% lower than prevailing market rates, making them one of the most affordable housing options available to low-income households.
The Resolution Foundation highlighted the scale of the housing challenge, stating that around 134,000 families in England are currently living in temporary accommodation, while approximately 1.3 million households remain on waiting lists for social housing.
The report also suggested that the government should consider restoring the link between housing benefit payments and local rental levels. Hannah Aldridge, Senior Research and Policy Analyst at the Resolution Foundation, said such a move could improve housing affordability for lower-income households. Housing support has previously remained frozen for extended periods despite rising rental costs, prompting policy experts and charities to call for benefits to better reflect local market rents.
The UK has faced persistent shortages in affordable and social housing for several years due to rising construction costs, limited housing supply and increasing demand. Successive governments have introduced funding programmes to encourage affordable housing delivery, but industry experts have consistently argued that higher levels of public investment and policy reforms are needed to bridge the widening gap between housing demand and supply.
Source Reuters
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