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Social housing

By 2040 councils will have a bigger role in providing city social housing, but (barring a radical change of policy) housing associations and PRS landlords will still be in the lead in 2040

Social housing

Historically, social housing was provided by local authorities who, in the 1950s and 1960s, were building around 170,000 homes each year. However, during the 1970s, the rate of local authority house building declined and by the end of the 1980s had effectively stopped. This was primarily driven by a succession of Housing Acts (the 1974 Housing Act, 1980 Housing Act and the 1988 Housing Act) which changed the way social housing was funded.

Since the 1990s, housing associations have been almost fully responsible for building new social housing. However, this sector typically delivers housing completions of below 30,000 per annum, which is less than a fifth of the councils’ long-term average in the post-war period. 

Figure 1: Social housing completions, selected periods and English cities, 1980 to 2018

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Source: Ministry of Housing, Communities and Local Government

The trend has been replicated at city level. In Liverpool, social housing completions fell from 1,050 in 1980-1981 to just 40 last year. In London just over 5,000 social houses were built last year, compared with just under 19,000 between 1980-1981.  This has had a marked impact on the level of social renters within cities and, as we write elsewhere, homelessness.

23_social_housing_pullquote_270x110The lack of new social housing in our cities means that numbers of households on waiting lists has risen. This is despite a significant fall in numbers in 2010 following the 2011 Localism Act, which allowed councils to exclude those without a connection to the area from waiting lists. The increase is most marked in Liverpool, where the number of households on waiting lists have increased fourfold. In London, Newcastle and Manchester the number has increased by about a third. So many traditional social renters are now reliant on private housing, with 1.5 million private renters claiming housing benefit.

Figure 2: Number of households of waiting lists, selected English cities, 1997 and 2017

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Source: Ministry of Housing, Communities and Local Government

Looking back 20 years, the story is one of increasing demand for social housing, with supply struggling to keep up. All of the increase in the English dwelling stock since 2001 has come from the private sector. Despite policies requiring a percentage of housing to be ‘affordable’, the number of social rented homes fell from 4.2 million homes in 2001 to 3.9 million in 2008, but recovered to 4 million homes by 2017. Capital grants for house building have been cut from around 90% in 1998 to around 25%, and thus much housing association building is funded from private borrowing.  

Still, there has been a gradual uplift in council homes following enabling legislation in the Localism Act; around 2,700 homes have been built by local authorities per annum since 2011. Councils are exploring alternative ways of delivering housing and just under a half of councils have set up local housing companies.

There might also be significant (and potentially gentrifying) estate regeneration allowing existing estates to be rebuilt with even more homes, as part of local authority regeneration and placemaking objectives. However, estate regeneration is not without its own challenges. Proposals for financing such schemes, and delivering additional social housing through maximised densities and increased development, often conflict with the views of local residents. The move to ballots and local referendums to decide the outcome encapsulate this tension.

By 2040, councils seem likely once again to have a bigger role in social housing delivery, alongside housing associations and others. However, a huge resurgence in social housing build looks as unlikely in the next 20 years as it has been in the last two decades. The trend is towards more private rented provision (PRS) and a professionalisation of PRS landlords as we write elsewhere. However, the major shortfall in supply means we can’t rule out a radical change in policy of the sort promoted by Jeremy Corbyn.

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