Increase grant levels to boost social housing investment

Grant levels for new social housing in England have fallen dangerously low and will need to rise to boost investment in response to the economic downturn caused by the coronavirus outbreak.

While grants have risen slightly in the last two years, they now cover just 11 per cent of housing association’s development costs, leaving the rest to be met by borrowing and surpluses. UK Housing Review 2020 shows that one-third of new homes are currently  being built without any grant.

The review also shows that only 11 per cent of new homes built in England is at genuinely affordable social rents, compared with nearly 70 per cent in Scotland and over 80 per cent in Wales. England has lost 181,000 social rented homes since 2012 through right to buy and other causes, even taking into account new build.

The Chartered Institute of Housing has called for a ten-year investment programme of more than £12 billion a year to meet the backlog of housing need and deliver 145,000 new homes annually, 90,000 of which would be at social rent.

Gavin Smart, chief executive of the CIH, said: “It’s clear that one outcome from the coronavirus-related economic crisis, after household incomes and savings have been decimated, will be an even greater need for homes that are genuinely affordable. Social landlords’ finances will also be depleted, and higher levels of investment and levels of grant will be vital to build the new homes that will be required.”