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The ARCH annual report for 2015-16 is now available to view.

 

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NAO publish Housing in England report 02/02/2017

A new report from the National Audit Office (NAO) comments on the government's ambition of delivering one million new homes by 2020. Surprisingly, it concludes that it does not require a substantial increase in current levels of housebuilding.

 

Download the"Housing in England" report

 

The report concludes that:

 

  • "The need for housing in England has in recent years grown faster than its supply. To keep up, housebuilding needs to increase across the country, and undergo a step change in London. Housing has become more affordable for existing homeowners. In contrast, social rents have risen faster than wages, as have private rents in London. Housing is less affordable for a first-time buyer now than it was in the 1990s. Homelessness has also increased over the past five years."
  • "Housing is a key priority for the Government, and it has responded to the housing situation in England by putting in place a range of policies designed to increase the supply of housing and to increase home ownership, largely through support to private housebuilders. At the centre of the Government's plans is its ambition of adding one million new homes by 2020, achievement of which does not require there to be a substantial increase in current levels of housebuilding."

 

In commenting on the increase in social rents, it attributes this to the fact that since 2011 the government has allowed local authority, and particularly housing association landlords, to set rents at "affordable rent" levels, which it defines as up to 80% of local market rents. The report finds that new tenants paying affordable rents in London typically paid 60% more than new tenants paying traditional social rents.

 

The report also highlights the potential for government housing policies to have conflicting objectives leading to tensions in delivery, referring specifically to the mandatory four year 1% rent reductions which reduced the ability of social housing providers to finance the construction of new housing.

 

On the objective of delivering one million new homes by 2020,it comments that the Department for Communities and Local Government (DCLG) measures new homes as "net additions" not solely newly-built homes. It goes on to say that delivery of the government's objective will require 174,000 net additions each year which is lower than the 190,000 net additions added to the housing stock in England in 2015-16.

 

The report highlights that:


  • Since 1981, the number of owner-occupied homes in England has increased from almost 10.5 million to 14.7 million.
  • In 2015, there were almost five million private rented homes, up from 2 million in 1981.
  • In contrast, the number of local authority and housing association homes for rent has fallen, from 5.5 million homes in 1981 to four million homes in 2015.
  • Total estimated government spending on housing in England was approximately £28 billion in 2015-16 but the most significant element is housing benefit. In 2015-16 there were 4.1 million claimants in England costing around £20.9 billion.

 

In a press release accompanying the launch of the report, Amyas Morse, Head of the National Audit Office said: "The need for housing in England has in recent years grown faster than its supply, and housebuilding needs to increase across the country. The government has responded to this by putting in place a range of policies to increase housing supply and home ownership. Central to this is an ambition to increase the supply of housing by one million homes by 2020, largely through support to private housebuilders. Delivery of this target will not require a substantial increase in current levels of housebuilding."

 

Download the"Housing in England" report.

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