WHY WE HAVE A STRUCTURAL DEFICIT IN OUR SOCIAL RENT HOUSING SUPPLY

Social Rent Housing playbook series

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Image courtesy of Resonance

According to research commissioned by Crisis and the National Housing Federation, we need to build 90,000 social rent homes a year in England to address the chronic shortage across the country and alleviate decades of undersupply. Instead, in 2021/22 the 7,528 new homes built were outpaced by the demolition and sale (including sale through Right-To-Buy) of social housing stock resulting in a net loss of 14,100 social rent homes.

In effect, we’ve turned the tap of social rent homes down to a trickle, having also taken out the plug. This has led to a structural deficit in UK social rent housing.

Eliminating the structural deficit requires a new model

The current system of housebuilding will not build high- quality, zero-carbon social rent homes because they are not financially viable within the current development model. While some say a national government injection of £12.5 billion a year would fix the problem through the current supply chain, in our view this is a fallacy.

We believe this level of grant funding is not only politically untenable, but in the current system there is a risk that it would only increase the competition for land, inflating land values and passing the investment of public subsidy on to landowners. Instead, a joined-up ecosystem solution is needed, and this will be the focus of the Playbook.

Why is there a shortage of social rent homes?

Since the late 19th century, local authorities and housing associations have built and managed social rent homes to provide truly affordable, decent homes to those unable to buy or rent from the private market. In the 35 years after the Second World War, an average of 126,000 social rent homes were built every year. Over the past 10 years, an average of 8,400 social rent homes have been built each year, a drop of over 70% compared to the previous decade. With an average of 24,900 social rent homes sold or demolished each year in the same period (a net loss of 16,500 homes), the overall stock of social rent housing is in decline.

As of March 2023, it was estimated that there were 3.8 million social rent homes, compared to 5.5 million in 1979.

With a chronic lack of social rent housing, more households rely on the private rental sector for housing, increasing the demand in an already oversaturated sector. With private rents increasingly unaffordable and a lack of social rental alternatives, a growing number of households are being forced to turn to local authorities for assistance. Providing TA for homeless households cost local authorities £1.74 billion in 22/23, a 62% increase in the past 5 years.

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As you engage with the Playbook, we encourage you to reach out to the contributing organisations to inform your learning. No single organisation’s product, process or passion can fix the problem. Change will come through creativity, collective wisdom and the will to roll up our sleeves, get involved and work together to do things differently!