Spring Statement is not enough to close social rent gap

by Victoria Galligan, Housing Association Magazine editor

Chancellor Philip Hammond’s affordable housing guarantee scheme means that housing associations can borrow up to £3billion to deliver 30,000 new affordable homes in England.

This is not additional funding, but merely the OK for HAs to borrow more money.

And it is not enough to provide the number of social rent properties which are so desperately needed.

For more than 20 years now, the social housing waiting list has remained at just over 1million families. In 2016 the total number of homes built by councils across Britain totalled just 1,840 – although this was the second highest number since 2012. But nowhere near the number which Shelter have recommended to end the scenarios it is seeing now. One in seven children – 1.6 million in Britain – are growing up homeless or in poor housing that damages their health, education and future chances in life.

Chancellor Philip Hammond, who announced the Spring Statement

Shelter recently published a report, after a cross-parliamentary review which also had housing experts and community leaders on the panel. The report stated that 3.1million social houses would be needed in the next 20 years – that’s 150,000 new social houses per year.

Shelter underlined the need for new homes for “trapped renters”: those young families who would not qualify for social housing under the current system who are stuck with expensive rents and little prospect of being able to buy their own home. Through RTB, they would have that option with a property rented from the council or a housing association.

Meanwhile, the Chancellor also announced £717million from the Housing Infrastructure Fund to unlock up to 37,000 new homes across west London, Cheshire, Didcot, and Cambridge plus a Future Homes Standard, signalling the end of fossil-fuel heating systems in new-build houses from 2025. The latter is huge news for providers of heating systems in new social housing and other new-build properties and will no doubt drive forward manufacturers’ R&D on producing electric and hydrogen hybrid boilers. The need for renewable energy to heat homes and reduce emissions is imperative – efficient heating also means lower energy bills for tenants.

So while the Spring Statement is positive for housebuilders, and will allow housing associations to borrow more cheaply in order to fund the new affordable homes, there is still more to be done in terms of providing housing for the families most at need – the 1million-plus families who are still on the social housing waiting list.

More industry comments on the Spring Statement:

Paul Hackett, chair of the G15 and chief executive of Optivo housing association: “Brexit uncertainty and the deepening UK housing crisis underlines the need for longer-term funding for affordable housing.

“The new funding announced today for the affordable homes guarantee programme is welcome, but our sector’s cross-subsidy model of delivering affordable housing is broken and a new funding deal is imperative if the Government wants to hit its target of 300,000 new homes a year.

“The Government must invest in this essential infrastructure to give the country the high-quality, genuinely affordable homes it needs.”

Shelter chief executive Polly Neate: “While this is good news, it has to be noted that we can’t deliver social housing on the scale we need on borrowing alone – 3.1m social homes are needed in the next 20 years to tackle the housing crisis at its root and lift thousands of families out of homelessness. We need much more grant funding for social housing in this year’s spending review to get a grip on our ever-growing housing emergency.”

Alex Goodfellow, board director of Stewart Milne Group: “The Government’s planned introduction of a Future Homes Standard by 2025 - to ensure all new build homes are future-proofed with low-carbon heating and world-leading levels of energy efficiency - is welcome news for the housebuilding and offsite timber frame industry.

“In order for Government energy/carbon and housing targets to be met efficiently, it’s important that the initial focus is on the energy efficiency of the building fabric before adopting low and zero carbon technologies. Offsite timber frame construction is a proven energy-efficient, cost-effective and modern building system, as timber is a carbon neutral building material.”

Brian Berry, Chief Executive of the FMB: “Today the Chancellor claimed to support housing delivery but actions speak louder than words and the burdensome and poorly thought-through biodiversity targets for developers will bring yet more costs and more delays for builders. Just as the environment for SME house builders starts to improve, these measures could end up stalling our progress.

“Rather than hampering the building of new homes, if the Government wants to be ‘more green’, it should focus instead on retrofitting the more than 24 million homes that have already been built and which account for around one fifth of the UK’s greenhouse gas emissions. This will not only help reduce the UK’s carbon footprint but will also tackle the scourge of fuel poverty.”

Dr Anna Dixon, Chief Executive, Centre for Ageing Better: “This £3 billion towards the building of 30,000 new, affordable homes is hugely welcome – but it is imperative that we grasp this opportunity to ensure these new homes are fit for the future and meet our needs as we age. In the coming years there will be many more older households.  

“Currently just 7% of our housing stock meets basic accessibility requirements. Unsuitable housing can cause problems for people with disabilities and cause injury and falls. This has an impact on both individuals and our health and care services.”