0:01 AM, 9th October 2024, About 5 days ago 7
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Councils across England are warning they could face bankruptcy unless more social homes are built.
In a BBC report, the Home Builders Federation, which represents housebuilders, claims their members have at least 13,000 affordable social homes ready to be built immediately.
However, these projects are stalled because no housing providers are available to buy the properties.
Steve Turner, executive director at the Home Builders Federation, told the BBC the problem of housing providers being unable to buy social housing is getting worse.
He said to the BBC: “It is a major and growing problem that is increasingly threatening affordable and overall housing supply.
“Small sites are being prevented from starting and larger sites are being halted as a result.”
According to the BBC, one of the main reasons housing associations can’t buy new properties is that they’re spending more money on repairing the homes they already own.
Many housing associations are spending money on fixing damp and mould problems after a government crackdown on unsafe social housing with Awaab’s law.
The law is named after two-year-old Awaab Ishak, who died from mould-related breathing problems in the family’s social housing flat in Rochdale.
The proposed law requires social housing landlords to check for hazards within 14 days, start repairs within 7 days, and carry out emergency repairs within 24 hours.
Another reason is that many housing associations are making less money from renting social homes.
Marie Chadwick, policy leader at the NHF, told the BBC: “Over the last decade the government has been cutting and capping the rent paid by social housing tenants. This equated to £3bn in lost rental income for housing associations last year.”
Another problem is due to rent levels changing it’s hard for housing associations to predict future income. This uncertainty makes it harder for housing associations to budget for buying new properties and also lowers how much banks are willing to lend for those purchases.
Several councils across England have warned they are spending billions on housing people in temporary accommodation.
According to the BBC, in the past year councils in England have spent more than £1bn on temporary accommodation such as hotels and hostels.
Some councils continue to buy and manage their own social homes, but the financial pressure they’re facing means they can’t afford to purchase the new properties available from housebuilders.
Shelter is calling on the government to build 90,000 social homes every year to tackle the housing crisis.
Polly Neate, chief executive of Shelter, said: “Decades of failure to build enough genuinely affordable social homes has left families struggling to cobble together extortionate sums every month to keep a roof over their heads.
“Those who can’t afford private rents are being thrown into homelessness and then left for months and even years in damaging temporary accommodation because there is nowhere else. To dramatically reduce homelessness, we need every party to commit to building 90,000 social homes a year for 10 years.”
Cider Drinker
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Sign Up9:19 AM, 9th October 2024, About 5 days ago
It’s somewhat ironic that new homes cannot be built because nobody wants to buy them.
If the government made letting property an attractive investment, new homes would sell like hot cakes.
Cider Drinker
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Sign Up9:21 AM, 9th October 2024, About 5 days ago
Fix the ‘population crisis’ and we wouldn’t need so many new homes,
Jo Westlake
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Sign Up10:41 AM, 9th October 2024, About 5 days ago
Social rents are so ludicrously low Social Housing providers can't afford to maintain their existing stock or buy the new houses that building companies are being forced to build specifically for Social Housing providers.
The solution is blindingly obvious. Increase Social rents to at least LHA. The attraction of Social Housing should be security of tenure not half price rent.
Although some Social tenants receive benefits a great many don't. Some earn very good salaries. Why should they get half price rent that people earning far less than them are subsidizing?
Tom Jenkin
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Sign Up11:47 AM, 9th October 2024, About 5 days ago
Reply to the comment left by Jo Westlake at 09/10/2024 - 10:41
Currently a 2 bedroom council flat in Brighton is £540/month versus £1600 for a similar flat in the PRS .
Jo Westlake
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Sign Up12:33 PM, 9th October 2024, About 5 days ago
Reply to the comment left by Tom Jenkin at 09/10/2024 - 11:47
Sounds about right.
In my area an older 2 bedroom Council flat is on their list at £422 per month. LHA is £797. Market rent for an identical flat is £900+
A brand new 4 bedroom Social house is on the list at £729 per month. LHA is £1296. Market rent around £1600+.
It's shocking that the government forced Social Housing providers to lower rents for 4 years and then capped increases for the following 5 years. Then introduced Awaabs law when it was obvious Social Housing providers didn't have the budget to deal with it. Surely politicians should have a slightly better grasp of basic economics?
TheMaluka
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Sign Up13:01 PM, 9th October 2024, About 5 days ago
Reply to the comment left by Jo Westlake at 09/10/2024 - 12:33
If politicians had a good grasp of economics, they would be business men and women, not politicians.
Reluctant Landlord
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Sign Up14:21 PM, 9th October 2024, About 5 days ago
Reply to the comment left by Jo Westlake at 09/10/2024 - 12:33
which is why councils, when they give planning permission to housing developers, there is a caveat in there that says X% have to be built so the council can rent at AFFORDABLE rents only.
The Councils still can't afford the cost of the property so the developer 'offers' it at a lower price (read is told to reduce the cost or no planning permission for the development will be given!). This enables the council to afford to buy it. The rub is they can only make it pay if it is then let at affordable rates (80% of market rate).
The money the developer loses on the sale of this property is then simply added on to the other properties being built for private purchase. So the private purchaser is paying more for their property to subsidise the one sold to the council.
What has happened where I live is that labour and supply costs have risen, making the build more expensive. The price can't be increased on the private properties for sale (for fear of them not selling at all), so ultimately the number of affordable units that can be offered to the council is 'renegotiated' as the worst outcome is that the whole development doesn't stall.
Inevitably now developments where once they said 10 affordable units will be available, they are dropping to 5 or 6 only.
Very little development is also being planned as developers are struggling to sell what they have already built and are laying off trades. Construction companies are giving profit warnings and not buying land either. When they are also buying each other out, it's a sign of tight times for some.
That means LESS of anything being built. The dream of social homes being delivered is pure fantasy. Councils/HA's can't afford to get units built, and can't make enough on social rent levels to even maintain them going forward.