Plan to increase council house building unveiled

council house building
New housing development under construction (Image: Dreamstime)

A plan to ramp up the building of new council homes has been unveiled by the not-for-profit Housing & Finance Institute (HFI) and think tank Localis.

Their report – Public Rental Homes – a fresh perspective – suggests partnering private developers with councils in a public/private partnership in a new way.

It starts by asking what percentage of private homes need to be built to produce sufficient public rental homes (PRH).

This is opposed to councils negotiating the percentage of affordable homes in a private housing development.

Backers describe this as a ‘bottom-up’ rather than ‘top-down’ approach.

Councils would be responsible for identifying suitable sites for housing. Once the PRH homes are built councils would rent them at half the market rate.

Developers would assume 100% of the risk and get a 20% margin on both the PRH homes and their own private units.

Chair of The Housing and Finance Institute Board, Sir Steve Bullock, said: "Thousands of families and individuals, both young and old, are caught in the trap of being unable to afford to buy or rent privately, but finding no alternative that they can possibly afford either.

“More people are falling into this trap each month yet the supply of new affordable homes is actually diminishing.

“The impact of the cost-of-living crisis makes finding a response ever more urgent and the HFI has commissioned this research to offer a way forward that can attract support on a cross party basis.”

Not truly affordable

The new approach is designed to tackle the problem that most ‘affordable’ housing is not actually affordable, and councils have years-long housing waiting lists.

Of the 52,000 new homes listed as affordable in 2020/21 by local councils just 6,000 homes actually were affordable. At the same time, 1.2 million people were on housing waiting lists.

Bullock added: “Putting the emphasis on building new social homes has the potential to be a win–win, with homeless people having a better chance of moving to decent properties that they can afford and make into homes while the economic impact of the construction will have wider benefits.

“Doing this at pace will need a different mindset at all levels of government and the HFI will press for that and work with councils, government and developers in the coming weeks to make this happen.”

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