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New analysis from the Chartered Institute of Housing (CIH) has revealed that government investment in building new homes has plummeted while spending on housing benefit has soared.
The UK Housing Review 2018 shows that just 4.3 per cent of the government housing subsidy went towards measures to boost new building in 2016 (down from 82 per cent in 1975/76) while 95.7 per cent went on housing benefit and support for mortgage interest (up from just 18 per cent). According to the CIH, the vast majority went to housing benefit, with support for mortgage interest accounting for around £200 million.
Additionally, investment in social housing has dropped from £13.7 billion in 1979/80 to 5.1 billion in 2016/17, with central government spending on private housing ‘dwarfing’ support for social housing. The report claims that 79 per cent of its £53 billion budget up to 2020/21 is directed towards private housing, with just 21 per cent going to affordable housing.
Terrie Alafat, chief executive of the CIH, said: “The government has pledged to deliver 300,000 new homes a year. That is absolutely the right ambition, but we are never going to reach that target unless more investment is switched to bricks and mortar. Investing in new homes would help make housing more affordable for people who are struggling – and it is also the only sustainable way to cut the housing benefit bill in the long-term.
“We need to increase the number of homes we are building but it’s not just a numbers game – we need to make sure we are building the right homes, in the right places, at the right prices. For many people on lower incomes, the only truly affordable option is social rent. Our analysis shows that more than 150,000 homes for social rent were lost across England between 2012 and 2017. It is simply unacceptable that we are losing so many of our most affordable homes at a time when more and more people are in need.”
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