The government's plans to boost the building of affordable housing across the UK have been criticised for not going far enough to tackle the ongoing crisis of access to housing by both affordable housing campaigners and the housing industry.
Delivering his first Autumn Statement as chancellor on Wednesday, Philip Hammond told the House of Commons that the government would spend £2.3 billion on a new housing infrastructure fund that will deliver up to 100,000 homes in "areas of high demand" by 2020-21.
Hammond also announced:
– 40,000 new so-called affordable homes to be built by 2020-21, through a £1.4 billion investment;
– 90,000 new affordable houses in Greater London, via a £3.15 billion grant to the Greater London Authority;
– laws to be relaxed to allow housebuilders to build a wider range of different homes. Such restrictions have been blamed for stalling housebuilding in the UK.
Housing minister Gavin Barwell said the new affordable housing schemes would include a mixture of tenures including affordable rent, shared ownership, and rent-to-buy, where renters build up equity in a property over time.
"Affordable" rent typically means that houses are available for 80% of the market rate, meaning that some can be rented out for several thousands of pounds a month – way out of the reach of many low and middle-income families, such as half of those earning the national living wage.
But the list of new affordable housing types conspicuously doesn't include social rent aka council housing, the low-cost housing typically provided by local authorities to those with the greatest need, which has declined sharply in the last decade.
This is in sharp contrast to the situation in Scotland, where the devolved government has promised 35,000 homes available for social rent.
An influential House of Lords report said earlier this year that England would need at least an additional 300,000 new homes to alleviate the price rises that are locking millions of people out of the housing market.
And while campaigners have welcomed Hammond's new commitments, some called on the government to go further.
Dan Wilson Craw, policy manager at the Generation Rent pressure group, said: "The government’s previous obsession with home ownership meant that funding wasn’t getting to the people most in need of affordable housing.
"By giving builders more flexibility over what tenure of homes they build, the government has made it easier to provide homes for people on the lowest incomes, but there’s still more they could do. The 40,000 homes to be built over four years won’t make a big difference – through new taxes on landlords the government is raising enough to fund 40,000 new homes every year."
Campbell Robb, chief executive of Shelter, the housing charity, said: “This extra investment will be welcome news for many of the ‘just about managing’ families crying out for homes that are genuinely affordable. It’s promising to see restrictions on funding relaxed, which should help to build the homes that those struggling actually need – including affordable homes to rent.
“At Shelter we see the impact of our chronic shortage of affordable homes every day, with increasing numbers of people left with no choice but to fork out most of their hard-earned wages on expensive private rents, and wave goodbye to the chance of a stable home.
“As always the devil will be in the detail, and we looking forward to working with the government to make sure that this funding helps provide homes for those struggling with high housing costs right across the country.”
The National Association of Estate Agents was cautious about the government's ability to deliver on its housing promises.
Mark Hayward, the group's managing director, said: "The measures announced during the Autumn Statement today to boost housebuilding go some way to making the housing market work for everyone, but quite frankly do not go far enough.
"The Housing Instructure Fund, as well as the fund to build 90,000 affordable homes in London, will act as catalysts to start closing the gap between supply and growing demand, but what we really need to see now is properties being built quickly."
Nick Davies, head of residential development at the London estate agents Stirling Ackroyd, was similarly cautious on the plans: "Sadly the Autumn Statement was a letdown for first time buyers and for Londoners. It seems Starter Homes have been put on the backburner, and the government failed to take decisive action on stamp duty, ducking the opportunity to get the market moving.
"First-time buyers already find it almost impossible to save for their deposit without the help of relatives and this Autumn Statement has done nothing to cut the cost. The top of the market is also flat thanks to the government’s reforms, with landlords also being pushed out of the market by the 3% surcharge."
Labour’s shadow housing secretary, John Healey MP, said the new commitments didn't go far enough.
“Six years of Conservative housing policy have led to the lowest level of new affordable housebuilding in 24 years. Today’s announcement is too little and too late.
“Too little to make good the huge cuts in housing investment from 2010, with investment still only half the level left by Labour. The reality is ministers’ deep cuts have left a funding shortfall of over £17 billion compared to the plans I left as Labour’s last housing minister. Today’s announcement doesn’t even make up a tenth of that.
“The government have no long term plan to fix the housing crisis and if they’re serious about trying they should back Labour’s plans to build tens of thousands more affordable homes to rent and buy each year.”