In July, we published Decent and affordable homes for all: five proposals for a fairer housing system. This is our call to the government, urging them to show bold action and transform UK housing through five clear recommendations for change.
This blog comes after a series of government announcements on housing, some of which are included here. With our vision for everyone in the UK to have access to a decent and affordable home, we stand willing and ready to work with the government to tackle the ongoing housing crisis.
Our second recommendation is:
Why does the government need to increase the supply of genuinely affordable homes?
Accessing an affordable home is essential for our physical and mental wellbeing and the foundation of a healthy, stable life. But today, far too many people struggle with ever-escalating housing costs. Private renters are hit the hardest, with 29% finding it difficult to pay their rent.
The lack of truly affordable homes impacts our health. Worries about paying the rent are a significant source of stress in many people’s lives, and the need to spend so much of our incomes on housing leaves less room for spending on food, social participation and other means of health promotion. Those least well-off are generally the worst affected: 26% of households on the lowest incomes spend over a third of their pay on housing, while only 3% of those on the highest incomes spend the same proportion on housing.
How can the government increase supply?
We welcome the government’s recently proposed changes to planning policy which could provide greater flexibility on rental tenures, in addition to amendments to right to buy receipts for housing associations. We also eagerly await the Spending Review for further commitments to investment in social and affordable housing.
However, to achieve the housing targets over the lifetime of this parliament, we also need to look at existing housing stock, with three key policies to consider:
Support the conversion of private rented sector properties to social/genuinely affordable rented Homes.
To increase supply, as well as building more genuinely affordable homes, we need a stronger focus on existing housing stock. The government should create a fund for local authorities that supports the conversion of private rented sector properties to social or genuinely affordable rented homes. The fund should also include retrofit measures to improve energy efficiency and overall sustainability and could also be extended to convert long-term empty properties for affordable housing purposes. Converted homes should be exempt from Right to Buy to ensure this increases social/genuinely affordable homes capacity.
Reform the compensation system for landowners to address windfall gains and promote more sustainable and equitable housing development.
The current system of land compensation leads to inflated land costs. When planning permission is granted, there is a stark gap between the land’s agricultural value and residential value of around 100 times its original value outside of London, which is ultimately passed on to homebuyers and renters, making housing unaffordable. Landowners and developers are making significant profits on land sales and have too much influence over how much affordable housing gets built. Further, as the Letwin Review acknowledged, the current system incentivises landowners and developers to delay development to maximise profits.
To ensure the delivery of affordable housing, the government should establish a Land Commission on a permanent basis for England and Wales. This body would provide a coordinated and strategic approach to land management, with a remit to reform land markets, land compensation and compulsory purchase orders. By playing a more active role in acquiring and bringing forward land for development, the government can retain the added value for more social homes and community-led developments.
Replace ‘affordable rent’ with income-linked ‘living rent’.
The concept of ‘affordable rent’ needs to be reviewed. Over the last decade, almost all new affordable homes for rent have been built under the system of “affordable rent”. This is a form of rent that is linked to the price of local equivalent private rentals, set at least 20% lower than the local rental market rate. Yet, where private rents are high, it often fails to live up to its name and people are priced out. Setting rents linked to income, rather than rent price, is a much fairer system of rent setting in the social housing sector. Government should design and approve the next Affordable Homes Programme to include a new intermediate housing tenure, ‘living rent’, to replace affordable rent. This would require transitional funding to social landlords who have built and converted homes to affordable rent, so they can be converted back to social rent or ‘living rent’ when tenancies end.
What are our other recommendations?
Our five proposals for a fairer housing system:
- Reimagine our housing system: agree a long-term vision to achieve Homes for All
- Increase the supply of genuinely affordable homes
- Transform the private rented sector to better protect tenants
- Support the growth of community-led housing to diversify the housing market and deliver more homes at prices people can afford, in places where they are needed and wanted.
- Place tackling health inequalities at the heart of housing policy
You can read all the proposals in more detail on our website.