Election special: Liberal Democrats – we want to build 150,000 social homes a year

The party said it “consulted with numerous homeless and housing charities to understand the scale of the social housing deficit” in deciding on the 150,000 homes figure.

The 49-year-old says not investing in social rent is a false economy, because of how much housing benefit is paid out to private landlords. “Yes, once you start to build those homes it’s expensive, but once you do, it starts to pay off pretty quickly.”

According to analysis by the New Economics Foundation, England paid £9.75bn to private landlords in housing benefit last year and will pay £57.7bn over the next five. If these claimants were to move to social rented housing, where rents are cheaper, the benefit bill would fall.

The government’s analysis shows that social housing pays back 69% of the grant used to build it within 30 years, and 110% within 60 years through reduced housing benefit expenditure.

Ms Morgan also highlights how a lack of social housing builds additional costs into the economy, especially in areas such as schools, and health and well-being. “For people in temporary accommodation, the impact on their mental health is extraordinary, and they often end up not working because their mental health is too poor,” she says. “There are all sorts of knock-on effects around the health and well-being of people if they’re not in a safe and secure home.”

A report recently published by academics at University College London estimated that a boost of £4bn annually to expenditure on social rented housing would deliver a net saving to the exchequer of £1.5bn a year, due to reduced costs not just in benefits, but also in homelessness services and healthcare expenditure.

It said this figure is likely to be an underestimate because of the added beneficial effects on economic growth and productivity, employment and disability benefits, acute and chronic health, the criminal justice system, educational attainment and life chances.

Right to Buy changes

In March this year, the government ended its two-year policy that allowed councils to keep 100% of their Right to Buy receipts, and estimates suggested that the scheme delivered between £180m and £200m to local housing budgets in England.

The size of the discount was increased in 2012 under a relaunch of the scheme, to a maximum of £87,200 across England and £116,200 in London. Until recently, councils previously had to give a proportion of the receipt from any Right to Buy sale to the Treasury, typically between 20% and 25%.

On this issue, Ms Morgan explained that her party would reinstate the policy for councils to keep 100% of the receipts, but also for councils to be able to set their own discount level, but where they have acute need to be able to suspend the policy altogether.

“We don’t think the government should take away the right for individuals to buy their social homes, but local authorities should be able to manage the policy as they find appropriate,” she added.

Given the latest polling, the MP for North Shropshire drew a wry smile when asked if her party was preparing to be the second-largest following an election.

The former chartered accountant said: “Ultimately, our job is to make sure that we get as many of us Liberal Democrats elected so that we can put real good and meaningful pressure on whoever forms the government to get more of our policies implemented.”

Her party’s wider offer for the sector includes plans for a 10-year emergency programme to insulate Britain’s homes, ensuring developers build appropriate infrastructure needed for new housing developments, plus new powers for local authorities to control and manage second homes and holiday lets.

On some of the thornier issues of legislative reform of late, Ms Morgan said that the Liberal Democrats would abolish leaseholds for residential properties and effectively end ground rents by cutting them to a nominal fee.