Following the budget, the case for investment in building homes is stronger than ever

Before the Budget, our Chief Exec and Director, Claudia Wood, warned that the Chancellor’s housing proposals were in danger of being ‘a series of half measures’; that failed to address the depth and breadth of the housing crisis. This arguably became a reality when the Budget announcements made in November focused largely on the private rented sector and first-time buyers, including the biggest giveaway, abolishing stamp duty for first time buyers.

Although this measure was contained within a wider £44bn package, which included a target to build 300,000 homes a year, housing experts have questioned whether this goal is realistic given the predominantly demand-side focus of many of the Budget proposals. David Orr, Chief Executive of the National Housing Federation, for example, has argued that the Chancellor’s proposals would only lead to ‘some relatively small growth in the number of new homes built’^[1].

There is a clear need to rethink housing policy. Grants to housing associations have been slashed and local authorities have not been able to readily borrow for a number of years – leaving very little in the pot to build social housing. The commensurate growth in “affordable housing” as a means of cross subsidisation was inevitable, but affordable housing currently stands at 80% of the market rate – beyond the reach of low and modest earners in high rent areas such as London. In 2015, for example, an ‘affordable’ flat went on sale in Hackney for £1 million[2], an astonishing 32 times the borough’s median wage. Even then, the IPPR recently reported a 92% of councils in England were even failing to deliver enough affordable housing.

The capping of the LHA also confines many housing benefit claimants to only the very cheapest, poorest condition properties. As LHAs are frozen and rents continue to spiral in the face of chronic supply shortage, Shelter has calculated that by 2020 80% of the cheapest properties will out-cost the LHA, of which 52% will leave a housing benefit gap of more than £50 a month[3]. Nonetheless, the Chancellor’s Budget mandated to lumber on with the so-far insufficient policy, by contributing £125 million extra in Targeted Affordability Funding to boost LHA. While any extra spending is of course welcome, subsidising rent in the private sector is little more than a sticking plaster solution for the shortage of social housing.

The focus on demand-side policies, also meant the Budget was largely silent on social housing, despite the current waiting list standing at 1.4 million. There’s a need to make the case for not just building more homes, but particularly for growing the stock of social homes. The Chancellor’s announcement contained a range of measures on welfare, health and education, but failed to see the links between these areas of policy and housing. As Claudia Wood explains in a recent blog, social housing could in fact be a vehicle to deliver key welfare services. A recent Demos report revealed that sheltered housing—housing for the elderly and disabled—could save the NHS millions by streamlining state welfare services. It suggests that £300 million could be saved per year from reducing the length of in-patient stays in hospital alone. Furthermore, local councils can capitalise on the pre-built communication lines with their tenants so as to provide benefits more efficiently. Inequality, unemployment, loneliness, addiction and poor health can be better dealt with when the local council or housing association is acting not just as a landlord, but providing an integrated support service. Given the current controversy over the badly implemented universal credit roll-out, it seems a pertinent time to consider an integrated provision for housing and welfare.

As well as delivering top-down services it’s also important to recognise that well-built social housing can facilitate bottom-up social support by providing the foundations for a strong community support network. Communal areas to congregate, living close to people you can rely on, and knowing the local services well can all act as a social infrastructure for daily life. As a Demos report entitled “Ties that Bind” revealed, communities can be an important source of resilience. For single parents, the elderly, and persons with mental or physical disabilities or long-term health conditions, support networks can be vital. For single mothers on low income, social networks often provide a source of informal childcare and support so she can stay in work. Indeed, a recent report by the Institute of Education indicated the importance of informal childcare— a third of all childcare is provided by grandparents, especially for younger mothers[4]. Yet many single mothers are socially isolated – living in social housing could help foster those vital friendships and social links. For older people, forging links in the wider community can be a vital source of help, from learning digital literacy skills to having assistance with DIY. Social networks build resilience and can prove to be life changing for vulnerable groups – and social housing provides the perfect setting in which to foster them.

Yet in addition to providing no real boost to the supply of social housing, the government’s pursuit of demand-side policies can actively undermine the development of such social networks. In 2012 local councils were given the right to force its residents to accept the housing they were offered—no matter where it was. Local people with roots and attachments to their community are being forced to move. In the case of London this has been particularly bad where people are moving either to cheaper and less desirable areas of the city, or out of London altogether. Since 2012, 50,000 families – hundreds of thousands of children – have been moved out of their borough, 6% of which have been moved out of London[5]. As academic and journalist Anna Minton explains in her book “Big Capital, Who is London for?”, these people have all lost most, if not all, of their social infrastructure and are undoubtedly more precarious for it.

The Government’s support of demand-side policies that claim to ‘unlock the market’ for Britons have so far been insufficient. Moreover it seems the argument to build more housing, specifically housing that caters to informal or a more structured forms of welfare, is ever more convincing. Through more supply side-focused policy making housing could be the gateway to dealing with socio-economic issues facing the most deprived in the UK. In marrying issues of welfare and housing, a more streamlined and cost-effective approach could be the resolution to both our housing crisis and other priority areas of social need. If affordable housing and housing allowance have failed to unlock homes for people who most need them, then building social and sheltered housing could be the key.

[1] Gavin Jackson and Aime Williams, Budget will not fix UK homes crisis, say housing chiefs, Financial Times, 2017

[2] Hillary Osborne, ‘Affordable’ shared ownership flat in Hackney on the market for £1m, The Guardian, 2015

[3] Dawn Foster, The rent gap: what is the local housing allowance? The Guardian, 2016

[4] Provision and Use of Childcare in Britain, Institute of Education, 2015

[5] Minton, Anna. “Big Capital. Who is London For.” (2017)