Shadow housing minister Jack Dromey pledged to bring back grants to build social housing if the party gets into power in 2015.
Speaking at the launch of a Smith Institute report on the future of housing associations earlier this week, Dromey said: “The government made a terrible blunder cutting £4bn from affordable housing and the recent Budget did little either for affordable housing, particularly here in London, or the supply of housing. In fact, the latest government incentives, including its Help to Buy scheme might have a perverse outcome, creating a new housing bubble, but not increasing supply.”
In the last round of social housing grants to 2015, associations were only given a grant for a fraction of the cost of developing a new home. Instead, associations were expected to take out greater loans paid for by charging much higher rents. They will have to wait until the comprehensive spending review in the summer to see if government grants for development will return – with many expecting it not to. Instead, the government has thrown its weight behind developing the private rented sector and providing equity loans to help people get on the housing ladder.
Dromey said that it was right for housing associations to develop a wider portfolio of housing, with 15 so far signed up for the government’s private rented scheme.
Labour MP and former cabinet minister Liam Byrne reiterated the party’s intentions in an interview in the Evening Standard. He said the party would look to cut the cost of housing benefits by reinvesting in capital grants.
His top priority over the next six months, he said, would be “to show how savings can be made on housing benefit by increasing the amount of homes there are for people to go to”. He did not go into details, but a study by the Institute for Public Policy Research has proposed phasing out housing benefit in favour of affordable housing grants to local authorities.
“Billions are spent with private landlords yet we ask nothing in return,” said Byrne. “We are spending £24bn on housing but are hardly building any houses. No wonder rents are soaring. We simply cannot go on like this.”
Meanwhile, a new report by the RIBA revealed the average one-bed new build is only the size of a London Underground carriage as it launched a campaign for new space and light standards to be introduced into new housing.
An upcoming ministerial review could result in the government reducing or even abolishing the UK’s limited housing standards, RIBA warned.
The RIBA report, The Case for Space, recently revealed that the average one-bedroom new build home in the UK is 46 sq m, making them the smallest in Western Europe.
Currently, London is the only place in the UK to have introduced legal minimum space standards for both public and private housing. Outside of the capital, minimum space standards only apply to publicly funded social housing.
