We need to build 3m new social homes by 2040

Eagle eyed readers may recall that last month we blogged about the number of new build completions rising by 6.4%. Here at Advantage Insurance, we recognised this as being good for the construction industry as well as being welcome news for those keen to get their foot on the housing ladder.

However, despite these encouraging figures, the challenge of addressing the country’s long-term housing undersupply crisis is ongoing and is a topic which continues to hit the headlines at the start of 2019.

A cross-party commission has told the government that:

“England must launch the biggest council and social house building drive in its history to rescue millions of people from a future in dangerous, overcrowded or unsuitable homes”.

As reported in the Guardian on 8th January:

“More than 3m new social homes are needed in the next 20 years, more than were built in the two decades after the end of the second world war, according to a year-long housing commission launched in the wake of the Grenfell Tower disaster. Its commissioners include the former Conservative party chair, Sayeeda Warsi, the former Labour leader Ed Miliband and the former Conservative Treasury minister and Goldman Sachs chief economist Lord Jim O’Neill.


“The call represents a direct challenge to Tory ministers to dramatically increase social house building from its current level of just over 6,000 homes a year. The number of new homes proposed is equivalent to seven times more houses than there are in Birmingham and 27 times more than in Milton Keynes.”

Housing Minister Kit Malthouse told The Times that “it’s time to keep calm and keep building” and that building more homes for ‘generation rent’ is “an urgent moral mission” in an interview on 4th January.

Although the cross-party commission has stressed that the government must do more in order to build more than 3m new social homes within the next 20 years, Kit Malthouse’s recent speeches and interviews appear to show a similar sense of urgency within government regarding the under-supply of social rented housing.

Speaking at the Savills Conference in November 2018, Kit Malthouse said that the current percentage of social rented housing being built is not sufficient to meet the nation’s needs.

However, he was optimistic that Theresa May’s decision to scrap the cap on how much councils can borrow against their housing revenue account assets to fund new developments (which was announced at the Conservative Party Conference last October) would pave the way for ‘more, better and faster’ house building.

Back in October, May told the conference: “Solving the housing crisis is the biggest domestic policy challenge of our generation… It doesn’t make sense to stop councils from playing their part in solving it… So today I can announce that we are scrapping that cap.”

Kit Malthouse said he hopes that scrapping the HRA debt cap will prompt a new wave of council house building creating low-cost rental accommodation.

Inside Housing reported that:

“Government figures revealed that of the 222,190 net additional dwellings to be created in the 12 months up until 31 March 2018, only 6,463 were new social rent homes – just under 3% of all new dwellings.


“When asked at the seminar whether 3% social rent was enough as a percentage of net additional dwellings, Mr Malthouse said that it was not.


“However, he was reticent to provide a number for what the level of social rent homes the government should be targeting by 2020.”

Mr Malthouse told the conference:

“I can’t sit and give a Whitehall directive target for the nation’s homes, [3% isn’t enough] and that is why we have removed the HRA cap… we hope that this will kickstart a new generation on council houses in particular that are at social rent.”

Social housing is classified as accommodation let at low rents to those most in need of a stable, affordable home. It is usually provided by councils and not-for-profit organisations such as housing associations and enables people on low incomes to live in areas where there are jobs.

Mr Malthouse said we must build “More, Better, Faster” in 2019 to tackle the shortage of affordable housing and kickstart the creation of a new generation of council houses, in particular those that are social rent.

Earlier this year, Housing Secretary James Brokenshire announced that the government will invest £1.67 billion in delivering 23,000 affordable homes in England.

Of those 23,000 homes at least 12,500 have been designated as social rent homes, which will be built in high-cost areas to help families who are struggling to pay their rent. This funding is part of the government’s £9 billion investment in affordable homes.

However, as reported in the Guardian this week, the commission, convened by the housing charity Shelter, is arguing that council houses and social housing should be available to more than just the people in greatest need and those saving to buy. As well as the 1.3 million people it estimates are in greatest need because of hazardous homes, overcrowding, homelessness and disabilities, they say that the new homes should be accessible to a further 1.2 million young people and 700,000 older people trapped in private rent. The commission puts the provision of housing on a par with health and education.

Advantage Home Construction Insurance offers a competitively priced and flexible service to housing associations, as well as providing structural defects insurance to builders, developers and homeowners.

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Advantage Home Construction Insurance (AHCI) provides structural defects insurance – operating nationally with offices in Warrington, London and Birmingham – offering development-related insurances and a service designed to give customers peace of mind.

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