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Social housing grant will need to rise due to coronavirus outbreak, CIH says
Grant levels for new social housing in England have fallen dangerously low and will need to rise in response to the economic downturn caused by the coronavirus outbreak, the Chartered Institute of Housing (CIH) has said.
It comes as the institute publishes the 28th edition of the UK Housing Review today, providing an almost 300-page digest of the state of housing policy in the country.
While grants have risen slightly in the past two years, they now cover just 11% of social landlords’ development costs, leaving the rest to be met by borrowing and surpluses. One-third of new homes the sector is delivering are being built without any grant.
The review also shows that only 11% of new homes built in England are at genuinely affordable social rents, compared with nearly 70% in Scotland and more than 80% in Wales. England has lost 181,000 social rented homes since 2012 through the Right to Buy and other causes, even taking into account new build.
Gavin Smart, chief executive of the CIH, said: “It’s clear that one outcome from the coronavirus-related economic crisis, after household incomes and savings have been decimated, will be an even greater need for homes that are genuinely affordable. Social landlords’ finances will also be depleted, and higher levels of investment and levels of grant will be vital to build the new homes that will be required.”
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A chapter on housing expenditure plans summarises the current spending commitments of the government – concluding that £17.98bn is due to be spent on affordable housing and £71.12bn will be spent on private housing between 2018/19 and 2023/24.
This includes £12.38bn of direct grant to private housing and £10.33bn in the affordable housing sector, with the remainder loan and guarantee funding.
However, it does not take into account the March Budget, which announced a £12bn five-year programme from 2021 onwards, putting in an additional £2.44bn a year to affordable housing expenditure.
It also does not take into account any new spending commitments following the coronavirus outbreak.
The largest grant expenditure in the private sector is the Housing Infrastructure Fund, which commits £5.4bn to unlock private sites for housing. The largest funding of any kind is the £30.7bn committed to the Help to Buy equity loans programme.
The review also contains chapters on the comparison between the housing policy of UK and European countries.
It was primarily authored by housing academics and policy experts Mark Stephens, John Perry, Peter Williams, Gillian Young and Suzanne Fitzpatrick and produced in accordance with Heriot-Watt University
