|As UK house prices continue to rise, the question of how to create sufficient affordable housing is voiced continuously within the property sector and beyond. Advantage has looked at why there’s currently a shortage of homes available to buy and at some of the steps the government is taking to facilitate more homebuilding.
However, despite the government’s ambitious housebuilding targets, and various interventions and incentives to encourage the construction of more affordable homes, many would argue that to make the progress needed over the coming years, investment and engagement from the private, as well as the public sector, will be needed.
In one recent example of non-government funded investment in affordable housing, Inside Housing reported that a pension fund manager and a social impact investor have joined forces to direct nearly £200m to help increase the supply of affordable homes.
BSC said the UK has a housing crisis that is unlikely to be solved through public investment alone
Big Society Capital (BSC) and Cardano plan to put £195m towards real estate fund strategies addressing the UK housing crisis.
Both firms are calling on real estate fund managers to participate in a joint request for proposals (RfP) aimed at increasing the supply of good-quality affordable housing in the UK, alongside generating a market rate financial return.
This £195m pot of money will be made up of £45m from BSC and £150m from Cardano, while both firms will assess proposals on a fully independent basis.
In a release, BSC said the UK has a housing crisis that is unlikely to be solved through public investment alone, given that there are currently more than one million people on social housing waiting lists.
90,000 more social homes need to be built each year to meet demand
According to the Guardian, a study by Heriot-Watt University estimated that 90,000 more social homes needed to be built in England every year to meet demand.
But in the year 2020-21, housing associations built 26,010 new homes in England, which was the lowest level since 2016-17, while only 1,650 council homes were built – the fewest since 2014-15. The official figures mean affordable homes accounted for just 18% of new housebuilding. Home ownership among 25 to 34-year-olds has fallen from 51% in 1989 to 28% in 2019, according to the Resolution Foundation.
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