Lord Best: ‘Boosting affordable housing supply would be the best long-term budget decision’

Next month’s Budget is an opportunity to give a dramatic boost to the supply of desperately-needed affordable housing.

Such a move would also be good politics: a YouGov survey in January showed housing to be the fastest-growing major issue for British voters.

A week ago, Michael Gove told Laura Kuenssberg that he is pressing the Chancellor to help address acute housing shortages.

The Secretary of State has also announced his own measures to increase supply. He wants to make planning consent much easier for development on brownfield land in the twenty largest cities (particularly London).

And he is proposing a further relaxation of planning requirements for conversion into homes of unwanted shops and offices everywhere.

It is unlikely, however, that speeding up brownfield planning processes will compensate for the retrograde step of removing compulsory housing targets for Councils.

And reducing planning requirements for converting commercial buildings needs tough enforcement of Building Regulations and of “prior approval” conditions. Otherwise, we will simply get brand-new slums.

What is really needed is a long-term plan for extra homes, with a clear emphasis on “social rent” for the half of the population on average or below-average incomes.

On 6 February, when Michael Gove appeared before the Lords Select Committee on the Built Environment, I asked him what proportion of the government’s target of 300,000 homes should be for social rent. He replied: “We need to aim to have a net addition of 30,000 homes for social rent every year.”

He noted that some would regard this as unambitious and advocate at least three times as many homes at these rent levels. But his aspiration sets a far higher target for the social landlords – housing associations and some Councils – than has prevailed in recent years.

So why this big interest in boosting numbers of socially-rented homes?

The first reason, no doubt, is political: with the General Election on the horizon, polls suggest housing issues are now a widespread concern.

A new survey of the electorate from Savanta for the social housing provider The Hyde Group shows more than half of all voters and almost two thirds of 18- to 34-year-olds say they are more likely to support a political party which invests more in affordable and social housing.

This is unsurprising when the poll shows that over 40% of these younger households have postponed life decisions – such as starting a family – because of their housing circumstances.

Even amongst the age group most likely to be comfortably housed – homeowners over the age of 55 – polling shows around half would vote for the party that invests more money in affordable/social housing.

The second reason for government engaging more strenuously with this issue is the urgency and magnitude of a problem that only social housing can solve.

The best barometer of the crisis is the escalation in numbers of households being placed in Temporary Accommodation – the extreme cases where the local authority has a statutory duty to find a home. These are the families with simply nowhere else to go.

There are now almost 140,000 children living in these insecure, unsuitable properties that deeply affect schooling, employment, health and well-being, costing the NHS and Care Services billions and harming the wider economy.

The growing use of Temporary Accommodation is also busting the budgets of Councils that already face severe financial difficulties.

As Chair of the Devon Housing Commission, I can report the use of costly temporary accommodation has more than doubled across the county in just a couple of years.

Now Councils are running out of options.

Yet research by Hyde shows their social homes alone have, for example, saved the NHS £93m a year as decent housing has meant fewer A&E visits, reduced childhood asthma (so often caused by damp living conditions), fewer GP visits, and improved mental health.

To create a brighter future for the hundreds of thousands deeply affected by the absence of a decent, affordable home, the Chancellor could support the social housing providers in three ways:

  1. Increase the Affordable Homes Programme and extend its duration from five to ten years. This would unlock additional private sector investment and prevent the stop-start approach which slows delivery at the start and end of spending cycles.
  2. Give rent certainty for ten years. A ten-year rent settlement with government would enable providers to invest more in maintaining homes. It would provide the certainty the sector needs to borrow capital at cheaper rates and would give investors more confidence to invest in the sector.
  3. Create a National Housing Conversion Fund. Both to meet emergency needs and to increase long-term social housing provision, the Affordable Housing Commission recommended the creation of a fund for housing associations and Councils to buy and modernise unfit rented properties. Now is the time to purchase from private landlords exiting the market because of higher interest rates, rises in maintenance costs, less favourable tax treatment and necessary, additional regulation.

Positive, concerted, long-term decisions by Jeremy Hunt and Michael Gove could dramatically boost housing provision and make a very real difference to today’s deep-seated housing crisis.

And politicians should note that this would also be very popular with the wider electorate.

Politics.co.uk is the UK’s leading digital-only political website, providing comprehensive coverage of UK politics. Subscribe to our daily newsletter here.