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Homeowners get lion’s share of government subsidy – CIH
Homeowners get more government support than private or social renters, according to a new report published this morning by the Chartered Institute of Housing (CIH).
The CIH described the report (attached below) as “an exhaustive analysis of government spending, taxation and regulation of the housing market”, and concluded that homeowners benefit from the most taxpayer support.
It took account of government commitments to guarantee debt funding and loans, as well as direct spending through grant and housing benefit, and tax relief.
It showed the government is directing £8bn annually to private housing, with half supporting homeownership initiatives and the remainder subsidising the market.
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Direct funding on social housing totalled £2bn a year, the report said, although this did come in the form of grant – rather than loans to private companies which often turned a profit for the Exchequer.
The report calculated that homeowners received a net £29bn in tax relief, while benefit payments primarily funded social housing (£15bn a year) and private renters (£8.5bn a year).
Overall the report, Dreams and Reality? Government Finance, Taxation and the Private Housing Market, concluded that homeownership was the most “subsidised” tenure, followed by social housing and then the private rented sector.
The research was carried out by housing finance experts Steve Wilcox, former professor of housing policy at the University of York’s Centre for Housing Policy, and Peter Williams, departmental fellow in land economy at the University of Cambridge.
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Terrie Alafat, chief executive of the CIH, said: “This report demonstrates just how much government support is going to the private market, and to homeowners in particular. It takes a comprehensive look at the way the government supports our housing system – and we would urge ministers to do the same.
“Currently, just 21% of government investment is going to affordable housing. Rebalancing this budget to support people on lower incomes who can’t afford to buy could make a big difference. It is vital that the government supports councils and housing associations to build more homes for social rent.”
The research, funded by trade body UK Finance, builds on work the CIH has done to show how almost four-fifths of government grants, loans and guarantees now go to support the private sector.
