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.