Andy Burnham's pledge to kickstart the largest council-house building program since post-World War II has raised concerns among government and housing industry insiders. While Burnham aims to dedicate the $39 billion Social and Affordable Homes Programme entirely to council homes, insiders warn this could reduce the total number of affordable homes built. This is because social rent homes, which council houses often are, have higher upfront costs compared to other affordable tenures, potentially derailing existing projects and impacting developers who have already bid on them.
The Resolution Foundation, a think tank, suggests a three-part solution to navigate these challenges and deliver more affordable homes within the current budget. First, they propose allowing private developers to build fewer social rent homes when private sales demand is weak, in exchange for delivering more affordable rent units (80% of market rate), which require less subsidy and could add 2,000 affordable homes annually. Second, they recommend ringfencing the $39 billion Social and Affordable Homes Programme specifically for social rent homes. Third, they advise utilizing the unused $2.5 billion low-cost loan facility at the National Housing Bank to fund housing associations, potentially adding another 4,000 to 6,000 affordable homes per year.
Combined, these proposals could increase total affordable housing supply by 1,000 to 3,000 homes annually, reaching a total of 66,000 affordable homes per year. This figure, though matching recent highs, is still significantly lower than the 100,000 homes built annually by local authorities in the post-war era. The Foundation emphasizes that achieving a genuine "gear change" in affordable housing will likely require additional funding beyond the current budget. Furthermore, challenges remain regarding the availability of skilled workers in the construction industry, which has seen a 4% decrease in employment over the past 12 months and a 14% decrease compared to 20 years ago.
Currently, 134,000 families in England live in temporary accommodation, and 1.3 million households are on the housing waiting list, highlighting the urgent need for increased housing supply. While Burnham's plan to decentralize control to regional authorities through a "No 10 in the North" has been welcomed by some as a "big deal" for devolution, others express skepticism about the capacity of regional authorities to manage such large-scale housing projects. The "housing first" model, similar to Finland's successful approach to homelessness, is central to Burnham's 10-year program, aiming to provide unconditional access to social housing and support services.
