The government plans to boost funding for affordable homes by providing £9.1 billion – up by £2 billion – of public funding as part of its Affordable Homes Programme, which housing associations and councils can bid for.
It envisages that the extra £2 billion investment would supply around 25,000 more homes at rents affordable for local people.
However, while Steve Collins, chief executive of affordable rent-to-buy homes provider Rentplus, welcomes the new plans, he says they don’t go far enough.
‘We must be realistic about the scale of the challenge. Figures from [analyst] TwentyCi show that the number of 18- to 35-year-olds buying a home has fallen by a staggering 21.6 per cent in the last quarter,’ he says.
The government reports that since April 2010, around 333,000 affordable homes have been delivered, including 240,000 for rent, but Mr Collins points out that in the past year, the number of affordable homes built has been only slightly over 1,000.
He explains: ‘The additional £2 billion will only lead to a further 5,000 affordable homes a year being delivered out of a target of 200,000 new homes every year for five years – or 2.5 per cent of the total needed. Given the number of homes we built for social rent fell from 40,000 in 2011-12 to 1,102 in 2016-17, the funding boost is welcome, but ultimately it is a mere drop in the ocean.’
Social rent deals
Ministers also confirmed plans to set a long-term rent deal for councils and housing associations in England from 2020, with the focus on areas where working families are struggling with the costs of rent and some are at risk of homelessness. To give social tenants more security, increases to social housing rents will be limited to the Consumer Price Index (CPI) measure of inflation plus 1 per cent for five years from 2020.
This is article was originally written by our sister publication Moneywise.
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