A report by the cross-party Levelling Up, Housing and Communities committee has called on the government to increase the delivery of social rented homes to 90,000 a year.
The report sets out the need to “support, regulate and invest in” the sector, setting and publishing targets to help boost delivery.
Findings of the report showed that financial pressures had resulted in social housing providers reducing the amount being spent on building new homes, which had seen local authority waiting lists grow by 2% to 1.21 million in 2021/22. This is compounded by just 9,561 social rent homes being built in 2022/23.
The report went on to criticise the government’s use of grants to fund predominantly shared ownership housing and affordable rent, which overlooked social rent homes that provide the lowest rents for tenants. The committee described the funding model as “inefficient” saying that “these homes can be financially viable with no direct grant”.
The report said: “We recommend that the government should conduct an early assessment of the adequacy of grant funding allocations and how much social rent is to be supported.”
“The government should also assess the role of appropriate private investment providing affordable rent or other forms of tenure in order to free up grant funding to better support more social housing provision.”
In a bid to provide “a clear direction for the social housing sector”, the committee called for the government to implement targets, saying:
“As a first step the government should set and publish a target for the number of social rent homes it intends to build each year.”
The committee warned that the sector is facing increased operational costs due to a number of reasons including higher borrowing costs, energy prices and legacy Covid-19 costs due to delayed maintenance, while it is also required to spend significantly to achieve lower-carbon goals and fire safety measures, and provide a higher standard of living.
The report also recommended:
- The government and local authorities should more actively use planning powers to ensure that the price of land does not inhibit the development of new social homes
- Urgently bring forward the next tranches of the Social Housing Decarbonisation Fund
- Review the role of private investment in meeting net zero and set out funding plans beyond 2025
- Provide social landlords with the same access to building safety remediation funds as private landlords
- The Regulator of Social Housing (RSH) should proactively assess how registered providers use their reserves to indicate financial viability, value for money and governance
- The RSH should regularly review its own ability to scrutinise new financing models in the social housing sector
In response to the published report, a spokesperson for the DLUHC, said: “Our Long-Term Plan for Housing will support the delivery of more homes, including additional social housing. ”Since 2010 we have delivered over 696,100 new affordable homes, of which 172,600 are for social rent, and we are on track to deliver on our target for new social homes.”
