Sajid Javid has promised a review of the issues facing the housing sector as a new report warns that the government urgently need to invest cash in social rented homes.
The study, carried out by the National Housing Federation, claims that the amount of money spent on building new social homes has fallen by such a large degree that taxpayers are spending more than ever on housing benefit to support people in costly rental properties.
And with the cost of housing someone in the private rented sector estimated to add an extra £21-a-week to the bill, the amount of housing benefit going to private landlords has almost doubled in the last decade to a total of £9.1bn in 2015/16.
It is also insisted that the nation’s commitment to building homes has fallen from £11.4bn in 2009 to 5.3bn in 2015 – a drop from 0.7 per cent of total GDP to just 0.2% – with more than one million families still on housing waiting lists.
This has led to spending on the benefit to rise from £16.6bn 20 years ago to 25.1bn, according to the federation.
Communities Secretary Javid responded to the study at the National Housing Federation’s Annual Conference today by promising a “top-to-bottom review” of the housing sector.
“Over the past few weeks the Housing Minister, Alok Sharma, has been meeting with social housing tenants right across the country,” Javid said. “And from those conversations it’s already clear that they want us to look again at the quality and safety of what’s on offer.
This will kick off a nationwide conversation on what has gone wrong with social housing, why it has gone wrong
“To look again at the way tenants are listened to and their concerns acted on. To look again at the number of homes being built, at community cohesion and more besides. And that’s exactly what this government is going to do.”
Javid added: “We will be bringing forward a Green Paper on social housing in England. A wide-ranging top-to-bottom review of the issues facing the sector.
“It will kick off a nationwide conversation on what has gone wrong with social housing, why it has gone wrong and – most importantly – how to fix it.”
— DCLG (@CommunitiesUK) September 19, 2017
In July, Javid called on the UK to adopt the same approach to the issue as Finland, who have adopted a Housing First concept, while speaking at a special reception for Big Issue vendors at the House of Lords.
The idea is that homeless people are placed in permanent housing before they become afflicted by issues such as addiction and mental illness.
The government made the decision in 2010 to stop funding social rent properties – dwellings for those on the lowest incomes. This choice saw construction drop off from 36,000 social rented homes built in 2010/11 to just 3,000 a year later with housing associations left to deliver homes through cross-subsidy at a lesser frequency.
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With ONS projections estimating the country’s population will rise by 17 per cent by 2039, – a rise of £9m people – it is feared that demand can only rise in the years ahead.
It is absurd that we’re spending less on building social housing than we did in the nineties
The National Housing Federation report suggests the solution of making more capital available to social home-builders and allowing the likes of housing associations to charge rent that is proportionate to the tenant’s income.
Redirecting the £1.1bn fund that has been unspent on the government’s Starter Homes scheme to build homes for social rent is another suggestion with housing associations reportedly able to fund up to 20,000 affordable homes using the cash.
— National Housing Fed (@natfednews) September 19, 2017
David Orr, Chief Executive at the National Housing Federation said: “It is absurd that we’re spending less on building social housing than we did in the nineties – there are even more people today on housing waiting lists than then despite increasingly stringent criteria.
“We know we need more, better quality social housing. And yet, rather than putting public money into building the homes we need, we are propping up rents in a failing market. Ultimately, this is poor value for the taxpayer and has a knock-on effect on everyone struggling to rent or buy.
“The Prime Minister is right that we’ve not paid social housing enough attention. After the tragic fire at Grenfell, this crisis can no longer be ignored. The Government must be bold and make a break with the past by making money available to build genuinely affordable homes.
“We welcome the Secretary of State’s announcement of a Green Paper and we share the Government’s ambition to make social housing a badge of honour for the nation. But there are things we can and must do right now – like restarting public investment in good quality, genuinely affordable housing.
“Immediately reallocating the unspent £1.1bn for Starter Homes would be a step in the right direction, and would in turn bring the housing benefit bill down. We look forward to working in partnership with Government and delivering homes of all kinds for people on low income.“