Today’s Budget represents a missed opportunity to make an impact upon the nation’s housing crisis.
The Campaign for Social Housing welcomes the Chancellor’s announcement of an additional £2.7 billion for the housing infrastructure fund and the proposal to lift borrowing caps in “high demand” (yet to be defined) areas. However, the government’s proposals appear to offer no new investment in social rented housing during this Parliament.
The Campaign for Social Housing has consistently made the case that investment in 100,000 social rented homes each year is one of the most effective ways to solve the nation’s housing ills. Not only would it help to slash the wasteful £25 billion spend on Housing Benefit each year but it would help to bring the housing market back to some kind of sensible stability. This would not happen overnight, but our research shows that over the course of a generation the Treasury could save more than £ 1 trillion from the Housing Benefit bill. This investment makes economic, social and political sense.
Housing Benefit effectively supports high rents in both the social and private rented sector. It is a waste of public money and benefits no one, least of all those who find themselves trapped on benefits in over-priced properties.
High housing costs and the lack of affordable housing underpin most of the ills in our society, including poor productivity, poverty, homelessness and lack of economic investment. High rents and house prices suck money out of the economy. Investing in social rented housing will have multiple benefits. It stimulates the economy and over the long term it will draw hundreds of thousands of people out of the unpopular private rented sector into high quality affordable homes, helping to bring down real house prices and private rents at a managed, sensible pace.
This is the solution to our housing crisis that the Chancellor has rejected today. Relaxing stamp duty is likely to increase house prices and pumping billions of pounds into the failed Help to Buy programme is not the answer. All the expert evidence shows that this merely inflates house prices and boosts the profits of housebuilders, without having any material impact upon supply.
The government says it want to push housing higher up the political agenda and to make life easier for the priced-out generation but the proposals announced today will do little to boost supply and are likely to push up house prices even further.