The National Federation of ALMOs (arms-length organisations that many councils contract out their housing to) and SHOUT commissioned Capital Economics to look at how a housebuilding programme would affect the benefits bill.
They warn that at current trends, the UK will be spending nearly £200bn a year on housing benefit – mostly for private tenants. This is clearly unsustainable and the report sets out a business case for investing in social housing, accepting that extra borrowing will be required, but arguing that financial markets will welcome it because it creates valuable assets that will last. The report also highlights the educational and health benefits of social housing, and addresses issues of capacity in the construction industry.
They have gone further than their colleagues in the housing association world and are calling for 100,000 new homes a year by 2020, let on a “social” rent. This policy will start paying for itself by 2034.
While borrowing is one option, this second report suggests creating a housing investment bank and harnessing individuals’ savings to fund more social housing – an idea Generation Rent supports.
It’s good to see serious thinking about the practicalities of building a new generation of social housing, but the trouble is none of this will help the millions of private tenants who are struggling now, and can’t wait another second for respite.
Many would benefit from a move to social housing, but the vast majority will remain, paying extortionate rents. Much bolder action is required. We’re calling for a living rent for private renters, set at local levels and with an option for landlords who want to charge a higher rent to pay into a local fund to build new social housing (see more on pp6-7). This will bring immediate benefits to the millions languishing on council waiting lists, while also providing the means to jump start housing supply.
Please support our petition for 21st Century rent control here.