The range of financial pressures facing social housing providers
has resulted in the building of less social housing and
exacerbated a chronic social housing shortage in England, says
the cross-party Levelling Up, Housing and Communities
(LUHC) Committee in a report published today
(Wednesday).
The Finances and Sustainability of the Social Housing
Sector report finds that, at a time when the country has
a serious shortage of social housing, competing financial
pressures are causing social housing providers to cut the amount
they spend on building new homes. Most of the grant available is
to build affordable rent and shared ownership homes, where
residents pay more, and not the social rent homes that have the
lowest rents.
The report calls for the Government to invest in the social
housing sector to ensure that 90,000 new social rent homes a year
can be built per year in England and to re-examine how much
funding is allocated to social rent homes. 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 report also recommends the Government use land value capture
and reforms to grants and funding to support social housing, and
help the sector deliver energy efficiency, decarbonisation, and
fire safety improvements.
, Chair of the Levelling Up,
Housing and Communities Committee, said: “The social
housing sector is crucial for providing shelter and support for
millions of households. Social landlords are, however, buffeted
by a range of serious financial pressures. There is a chronic
social housing shortage. There are pressing demands to invest in
improving homes, so they are not blighted by mould, damp, and
leaks, and to decarbonise the housing stock, and fix building
safety defects. More social homes are needed. The Government must
act to fix this situation by committing to focus investment on
building the social homes the country needs.”
The Committee's report highlights the potential role of private
investors in funding the building of more social homes and calls
for these investors to be properly regulated to help ensure they
are committed to long-term investment in the social housing
sector.
The report also highlights the failure of the Government to
provide the social housing sector with the same funding as the
private sector for fire safety work and calls on the Government
to give social housing landlords the same access to funds for
building safety remediation as private landlords.
Recognising the level of financial risk varies significantly
across the sector, the report recommends the Regulator of Social
Housing takes a more proactive approach to regulating individual
providers: where registered providers have significant financial
reserves, the Regulator should be encouraging them to finance
repairs and other works residents need but where registered
providers face more financial risk the Regulator should be
engaging with them more regularly.
ENDS
Further information
- The social housing sector in
England houses around one fifth of households in the country. It
provides eligible tenants with homes at a lower rate than the
open market. The
level of discount varies: the social housing sector includes
social rent homes, where rents are on average 50% cheaper than
market rent, as well as affordable rent homes, where rents are
between 50–20% cheaper than the open market.
England's roughly 4.1 million social homes are largely provided
by housing associations (private not-for-profit organisations who
are responsible for around 2.5 million homes), local authorities
(1.6 million homes) and a small number of for-profit companies,
who have begun to provide social housing in recent years (21,000
homes).
This information and footnotes for the sources can be found in
paragraphs 1 and 2 of the report (on p.2). A more detailed
explanation of the different types of housing are included in the
annex to the report.
- The report summary is on p.3. A
list of the report's conclusions and recommendations can be found
on p.42. A list of the public evidence sessions for this inquiry
(and links to the transcripts in each case) can be found on p.52
of the report.
- The Levelling Up, Housing and
Communities (LUHC) Committee scrutinises the spending, policies
and administration of the government department for Levelling Up,
Housing and Communities. The LUHC Committee is not a government
committee but a select committee of the House of Commons with a
key role in holding ministers to account. Any of our inquiries
would correctly be described as a ‘parliamentary inquiry' and not
a ‘government inquiry'.
