Patrick Mooney explores how social housebuilders are falling far short of targets, with severe underinvestment, rising homelessness, and regulatory pressures undermining efforts to deliver the new homes urgently needed.

A fall in the number of new homes started by housing associations and local authorities across England has highlighted the scale of the problems facing the social housing sector as it struggles to deliver across a wide range of fronts.

As the total for all new houses started in England last year fell to about 108,000, the social housing sector combined to contribute just 29,510 of the total – with councils starting a somewhat miserly 1,300 homes in addition to the 28,210 being built by housing associations. 

The numbers for completions were slightly better at 154,000 in total, with 38,600 provided by social landlords, but the overall picture is a significant concern to politicians in Whitehall, as well as those working in the sector and perhaps most importantly, to the hundreds of thousands who are waiting for a safe, secure and affordable home. 

These totals are nowhere near the 1.5 million new homes target set by the Government for this Parliament, nor are the social homes figures remotely close to the 90,000 figure which experts say are needed to be built each year to meet demand. You do not need to be the most eagle-eyed of readers to notice the huge discrepancies.

And sadly the prospects for this year and next are looking no better as the sector is facing an unprecedented combination of demands on its limited resources. Simultaneously the Government and a variety of regulators are also expecting social landlords to spend considerable sums on improving their existing housing stock and services to residents. 

This is needed to reverse decades of under-investment – to tackle such problems as mould and damp, to speed up the delivery of essential repairs, to retrofit energy efficiency and new health & safety measures, while also bringing houses up to a modern standard. None of this work comes cheaply and the failure to deliver could result in punitive action from regulators and the ombudsman.

Existential crisis

At the same time local authorities are dealing with a growth in homelessness which is threatening the financial stability of many councils and pushing them to the brink of bankruptcy. Last year, English councils spent more than £2.1bn on temporary accommodation – nearly a third more than they did in the previous year and a huge waste of money. 

For the most part, this money is being paid to private landlords who own short-stay hostels, bedsits and B&B hotels. The accommodation is unsuitable, cramped and often unsafe, particularly
for families with children. How much better it would be if the money was being spent on building secure and affordable homes, while paying decent wages to construction staff. 

Instead London boroughs are spending £4m a day on emergency housing – equal to three-quarters of their total housing expenditure, while Hastings in East Sussex, one of the worst hit by the problem, is spending over 50% of its core spending on emergency housing. This is not an isolated problem and a growing list of councils are reporting that the cost of providing temporary accommodation is putting their financial stability at risk. 

Meanwhile it was recently revealed that councils in England, with the most severe shortages of social housing, now have waiting lists exceeding 100 years for a family sized (3+ bed) social home.

This extraordinary finding came from analysis done jointly by the National Housing Federation, Crisis and Shelter who are warning of the critical need to boost investment in social housing in order to end homelessness and tackle the country’s rapidly worsening housing crisis.

The figures reveal a dire situation for struggling families across the country, as the number of families on waiting lists in England has increased by 37% since 2015. In 32 local authorities across England the wait for a family sized home is now longer than an entire childhood (18+ years), with the worst three councils, all in London, having waiting lists exceeding the hundred years figure mentioned above.

Additionally Shelter is warning that without urgent investment, homelessness and its staggering costs to councils will continue to skyrocket. Using historical trends and Government data, Shelter estimates that 206,000 children will be homeless by 2029 and the number of households in temporary accommodation could surge by 44%. Without critical investment in providing new social housing, the charity says that the cost of temporary accommodation is on track to spiral by 71% to £3.9bn by 2029.

No quick fixes

To prevent such outcomes, the Government has been intent on changing the country’s planning framework and trying to make it easier (and quicker) for new housing developments to obtain planning permission. It has begun recruiting and training hundreds of new planning officers, as well as investigating the creation of a series of new towns and increasing the amount of funding available to pay for new affordable housing. 

But given the time taken to design, obtain consent for and to build new houses, it will be several years before we see any significant and positive results arising from these actions. In the meantime housing waiting lists will continue to lengthen and temporary housing costs continue to rise – hence the rather dramatic forecasts given by Shelter.

In fact the picture could even be worse later this decade because firstly the downward trajectory needs to be halted and then it needs to be reversed. This is why policy makers in the sector are calling for “the biggest boost to social housing in a generation.”  

Turning this around will require a package of measures to rebuild capacity, unlocking housing associations’ ability to borrow and build new social homes. For this reason the National Housing Federation has been lobbying Ministers for a 10-year rent settlement, with annual increases linked closely to inflation and a means for the rents of similar properties in the same area to converge over time, removing expensive and difficult to explain anomalies.

These measures are seen as essential if social landlords are to rebuild their financial capacity and to withstand further financial shocks in a more uncertain world. They are also vital if the social housing sector is to deliver an upsurge in housebuilding funded by a boost to development budgets with more generous grant rates.

Because of the challenging environment which social landlords have been working in over the past decade, many housing associations have actually been reducing their development programmes in recent years and their expenditure on Section 106 homes in particular. This mechanism was until very recently one of the most productive and popular ways for associations to deliver new housing, but not anymore. If ever proof was needed that housebuilding is nothing like turning a tap on or off and is more like the massive tankers moving cargo across the oceans, this is surely it.

Speaking ahead of the Spending Review which will answer many of the questions about the Government’s intent, Kate Henderson, the NHF’s Chief Executive, said: “The fact that families in so many parts of the country face waiting lists for an affordable home longer than their children’s entire childhood is a national scandal. Security, stability and the space to learn and play is vital for a child’s development, yet we are allowing hundreds of thousands of children to grow up in damaging temporary homes, in cramped and poor-quality conditions and with little privacy. This is no way for a child to grow up and these children deserve better.

“The social housing sector has faced years of withdrawal of vital funding. This Spending Review is the opportunity for the Government to rebuild the capacity of the social housing sector and commit the investment and the change that is needed, creating a better future for our children and ending homelessness for good. This means delivering co-ordinated homelessness and long-term housing strategies which include a package of measures to support the social housing sector to recover and crucially a big boost in funding to build new social homes.”

The downturn in housebuilding seen in 2024 can be reversed and many of the levers for achieving this are slowly being put in place, but the housing sector needs an awful lot of help and support if it is to ensure that Shelter’s warnings about what could happen with homelessness do not turn into an awful prophecy.