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Savills: £7bn in grant funding needed to meet social rented demand

Grant funding of £7bn a year is needed to house all those in need of "sub-market" housing in social rented homes, Savills has concluded.

Theresa May recently announced an extra £2bn across four years for affordable housing.

 

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Savills: £7bn grant funding needed to meet social rented demand #ukhousing

96,400 households each year can't afford to buy or rent in open market #ukhousing

Shortfall of 55,000 affordable homes per year, 90% in London and the South #ukhousing

In its report, Investing to Solve the Housing Crisis, Savills said grants should be treated as public investment rather than simply as a cost.

Grant funding for new affordable homes should be treated as a public investment because it could slash the housing benefit bill by some £430m a year.

Robert Grundy, Savills head of housing, said: “Grant funding for housing could be considered an investment where it can deliver long-term savings on the housing benefit bill and understanding the range of needs in different locations is a vital prerequisite.”

The report said there were 96,400 new households each year that could not afford to buy or rent in the open market and that 300,000 new homes were needed annually in England to meet housing demand, a third at sub-market prices.


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But in each of the past three years 55,000 fewer affordable homes had been built than were needed, with 90% of this shortfall coming in London and the South.

Providing the required number of social rented homes would cut the housing benefit bill by £430m annually, giving a saving of £23.9bn based on current 30-year gilt rates at 1.8%, the consultancy said.

However, it would be necessary to tailor policies to local conditions. Savills research director Chris Buckle said: “A one size fits all housing policy fails to address the variety of issues faced in different regions.

“In markets where affordability is the most pressing issue, greater supply across a range of tenures is needed to meet the varied needs of local households unable to access the market. In other areas, housing quality is more of an issue, including a need to renew poor-quality private rented housing.”

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