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Labour will miss housing target without more funding for social homes, Rayner told
Labour’s target to build 1.5 million new homes this parliament cannot be delivered without more funding for social and affordable housing, Angela Rayner has been told.
New build projects are already being delayed and cancelled across the country due to “significant financial pressures and uncertainty”, housing providers warned.
The new housing secretary was urged to address “years of policy uncertainty and underfunding” in a letter signed by the National Housing Federation (NHF), the Chartered Institute of Housing (CIH) and the Local Government Association (LGA).
Ms Rayner was told how capped income, debilitating cuts, unfunded new requirements and soaring costs have “decimated” housing association and councils’ housing budgets.
Rental income is 15% lower in real terms than in 2015, while each social home will require up to £50,000 over the next 30 years in maintenance and retrofit costs.
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Reflecting these financial pressures, housing association starts of new homes in England were 30% down last year compared to 2022-23, with “further falls expected this year”.
Housing associations started just 32,705 homes in 2023-24. Meanwhile, the number of affordable home starts fell by 22% to 30,631 in the same period, according to the NHF. This includes just 7,179 homes for social rent, the most affordable tenure.
The situation is even more perilous in London, where grant-funded affordable housing starts fell 90% to just 2,358 in 2023-24.
“At the next Spending Review, we need a long-term plan for new and existing social homes, underpinned by a fair and sustainable financial model developed alongside councils and housing associations,” the letter read.
“Without this, we will not be able deliver our shared ambition to build 1.5 million new homes this parliament.”
Ms Rayner has promised to deliver the “biggest boost to affordable housing for a generation” and “the next wave of social and council houses”, while the Labour Party committed to building 1.5 million homes over the next five years in its general election manifesto.
The NHF has also penned a ‘Social Housing Renewal Plan’, which sets out its key demands from government.
The document calls for the Affordable Homes Programme (AHP) and the Social Housing Decarbonisation Fund (SHDF) to be extended immediately by a year.
The NHF also wants a 10-year rent settlement of Consumer Price Index plus 1% and convergence, and for social landlords to be able to access the Building Safety Fund.
The housing body asked for emergency funding for homelessness and supported housing services to help councils in financial crisis.
It also urged ministers to pause any regulatory changes, arguing that the new consumer standards and tenant satisfaction measures should be given time to bed in before landlords face more requirements.
When parliament returns in the autumn, the NHF said, government should announce a new five-year AHP of £4.6bn a year, boost the SHDF into a £2bn-a-year existing homes investment fund, and allocate £1.6bn a year for supported housing.
In her first speech as chancellor on 8 July, Rachel Reeves said that mandatory housebuilding targets for councils will be restored and a new taskforce will be created to accelerate stalled housing sites.
She also said the government would “call in” big planning applications that are stuck in limbo – fast-tracking around 14,000 homes in Worcestershire Parkway, Liverpool, Cambridgeshire and Sutton Coldfield – and hire 300 new planning officers.
The letter comes after 20 of the largest local authority landlords in the country called on government to save council housing through five key solutions.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “We are committed to delivering 1.5 million new homes by the end of this parliament, with the biggest increase in social housing and affordable housebuilding in a generation.
“This government will also work in partnership with councils, housing associations and the wider sector to ensure we hit our ambitious target and build the homes Britain needs.”
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