In her first major statement to the House of Commons on 30 July,
Deputy Prime Minister Angela Rayner said:
"In the coming months, the government will publish a
long-term housing strategy. For how we will transform the housing
market, so it delivers for working people."
We understand that the Government intends to publish the
strategy in the spring, possibly alongside the next Budget, as one
significant outcome of the Spending Review currently underway.
ARCH submissions to the last three Spending Reviews have
consistently called for a long-term strategy. Councils are expected
to plan for future housing needs and to operate 30-year business
plans for the homes they manage. Both require a planning horizon
far longer than the three years of a typical Government Spending
Review. Our latest submission argued:
Although the time horizon for the Spending Review is the next
three years, we argue that its decisions should be informed by a
longer-term strategy covering at least the next two Parliaments.
Even the last Government acknowledged that the English housing
market is broken, and there are no quick fixes. Our submission
concurs with the conclusion of the recent
Southwark report (1) that the financial system for council
housing is broken, creating a 'black hole' in councils' housing
budgets that will continue to widen unless action is taken.
Our submission provides an independent estimate, commissioned
from Savills, of the size of this deficit. There are several
options for tackling it, but all involve a substantial increase in
public spending in the short term, as does action to kick-start the
'revolution in council housing' promised by the Deputy Prime
Minister. However, as
research we have previously commissioned-and similar studies by
organizations such as the NHF, Shelter, the Building Research
Establishment, CaCHE, and the Joseph Rowntree Foundation have
repeatedly demonstrated-this is an investment that can save public
money, perhaps not within the next three years but certainly within
the next decade (2). The principal savings
derive from increasing the number of households who can move from
expensive, unsafe, and unsatisfactory temporary or privately rented
accommodation into safe, secure, and affordable council homes. For
households receiving help from benefits, this yields immediate
savings in welfare spending, as well as indirect savings from the
positive impacts on health, safety, and employment
opportunities.
While our submission largely focuses on council housing, we see
our proposals as an integral part of a long-term strategy covering
housing in all tenures. For the last decade, the goal of a
zero-carbon economy by 2050 has served as the test by which we
judge policies for the short and medium term. We argue that the
Government housing policy should also be shaped by a clear vision
of where it wants housing to be by the same date. While an argument
for clear long-term goals can be made in many policy areas, it is
particularly strong in housing where we are planning investment in
assets that are expected to endure for many years. For the
fifth-largest economy in the world, we suggest the following
ambitions should be regarded as both reasonable and achievable by
2050:
• As part of a zero-carbon economy, every household should
be able to enjoy a home meeting a new Decent Homes standard, with
the investment necessary to achieve this being a key driver of
renewed economic growth.
• To achieve this, the Government will need to meet its
commitment to build 1.5 million new homes over this Parliament, but
this alone will not be enough.
• Four out of five households aspire to be homeowners -
and this proportion has remained broadly constant for
decades. The over-50s have achieved this aspiration; younger
households have seen it slip increasingly beyond their reach.
By 2050 this trend should have been halted and reversed. To
achieve this turnaround, we believe a fresh look is needed at
policies to support and sustain home ownership.
• Those who do not wish to become homeowners, whether for
now or forever, should not be condemned to second-class housing,
but enjoy the same standards, dignity and esteem as others, at a
rent they can afford.
• By 2050 we expect there to be substantially fewer,
but better, homes in private renting. Private tenants should be
able to expect homes that meet the same high standards as social
housing; some accommodation, and some landlords will prove unable,
or unwilling to achieve this. Nor can the aspirations of
young homebuyers be met through new building alone.
The central point of our argument is that the Government must
have the courage and foresight to plan over at least two
Parliaments and recognise that the fruits of the additional
investment that is desperately needed in the short term are real
and substantial but will mainly fall in the second part of the next
decade. ARCH will be taking every available opportunity to
press this argument over the coming months.
References
(1) Securing the Future of Council
Housing: Five solutions from over 100 of England's council
landlords, commissioned by Southwark Council, https://www.southwark.gov.uk/assets/attach/293669/Securing-the-Future-of-Council-Housing-Report.pdf
(2)
Centre for Economics and Business Research The economic impact
of building social housing: a CEBR report for Shelter and the
National Housing Federation, February 2024.
https://www.housing.org.uk/globalassets/files/cebr-report-final.pdf.
Building Research Establishment, the cost
of ignoring poor housing, July 2023.
Housing Subsidy's long-term shift from
supply to demand and what might be done about it, Prof. K. Gibb, UK
Collaborative Centre for Housing Evidence, June 2024. Joseph
Rowntree Foundation, the links between housing and poverty,
2013.