Inside Housing – Commentary – UK Housing Review asks questions about how England should finance housing provision

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Here is the breakdown of affordable housing supply in England over the past 20 years.

The production of social rents has fallen to less than 7,000 housing units per year against a need for 90,000, and even this overestimates the real situation since the stock has in fact fallen by 208,000 (5%) since 2012 thanks to the right to purchase and conversions into affordable housing. to rent.

“Analysis of the review of current state support through grants, loans and guarantees reveals that 56% (£23bn) is for the private market, compared to 44% (£18bn ) for social rents, affordable rents and low-cost home ownership.”

Housing associations now own over 280,000 affordable housing units (11% of their stock) and municipalities over 30,000. Yet, as the chapter points out, any hope that they would somehow respond another to “a more diverse part of the population” has long been wiped out and “there is no group of self-sufficient households that can afford higher affordable rents without government assistance”. ”.

Production of social rents could increase over the next few years (Savills expects 11,000 to 12,000 by 2026) thanks to greater production in London and by local authorities, but even that could be hampered by government plans aimed at diverting developer contributions to the first houses instead.

And the chapter covers in detail the competing demands on social landlord finances for building safety works and the decarbonisation of the existing stock and the pressure of rising inflation.

A final section examines affordable homeownership and emerging evidence that the private sector could play a greater role even as homebuyer assistance is phased out.

Whether that will be enough to meet the government’s target of bringing two million more households to homeownership by May 2024 remains to be seen, but the chapter makes a point about shared ownership that I hadn’t fully appreciated until ‘now.

It seems clear that co-ownership provided via Section 106 will be seriously threatened by early houses, but there is also growing evidence that for-profit providers and others are turning to what has traditionally been a monopoly of housing associations. The chapter argues that there is potential for “a radically transformed shared ownership market”.

At the same time, homebuilders are developing an alternative purchase assistance program called Deposit Unlock which will support 95% of mortgages on certain new builds underwritten by mortgage security, and there are also complementary private loans and equity loans.

All of this raises the question of whether the government can focus more on affordable rental housing when the market offers more to support homeownership.

It would be about time, given that analysis of the review of current state support via grants, loans and guarantees reveals that 56% (£23bn) is for the private market, compared to 44% (£18 billion) for social rents, affordable rents and lower cost home ownership.

A return to investment in affordable (let alone social) housing for rent may seem long, but the chapter outlines the consequences of failure. More low-income households will be forced to turn to the high-rent, low-quality private rental sector and homelessness will increase with higher costs.

But, just in case the government isn’t listening, it will struggle to level a country in which the biggest loss of affordable housing in the past three decades has been in the north of England .

It’s part of the long-term legacy of procurement assistance – the subject of another chapter by Alan Murie which tells a not always obvious story about a policy that has had impacts far beyond its initial objectives.

This is just a preview of what to expect in the UK Housing Review 2022. Find more details on how to get a copy here.

Jules Birch, columnist, Inside Housing

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