Parliamentary Committees and Public Enquiries
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Government must invest in building new social homes to tackle chronic housing shortage, say MPs

The range of financial pressures facing social housing providers has resulted in the building of less social housing and exacerbated a chronic social housing shortage in England, says the cross-party Levelling Up, Housing and Communities (LUHC) Committee in a report published today (Wednesday).

The Finances and Sustainability of the Social Housing Sector report finds that, at a time when the country has a serious shortage of social housing, competing financial pressures are causing social housing providers to cut the amount they spend on building new homes. Most of the grant available is to build affordable rent and shared ownership homes, where residents pay more, and not the social rent homes that have the lowest rents.

The report calls for the Government to invest in the social housing sector to ensure that 90,000 new social rent homes a year can be built per year in England and to re-examine how much funding is allocated to social rent homes. As a first step, the Government should set and publish a target for the number of social rent homes it intends to build each year.

The report also recommends the Government use land value capture and reforms to grants and funding to support social housing, and help the sector deliver energy efficiency, decarbonisation, and fire safety improvements.

Chair's comment

Clive Betts, Chair of the Levelling Up, Housing and Communities Committee, said:

“The social housing sector is crucial for providing shelter and support for millions of households. Social landlords are, however, buffeted by a range of serious financial pressures. There is a chronic social housing shortage. There are pressing demands to invest in improving homes, so they are not blighted by mould, damp, and leaks, and to decarbonise the housing stock, and fix building safety defects. More social homes are needed. The Government must act to fix this situation by committing to focus investment on building the social homes the country needs.”

The Committee’s report highlights the potential role of private investors in funding the building of more social homes and calls for these investors to be properly regulated to help ensure they are committed to long-term investment in the social housing sector.

The report also highlights the failure of the Government to provide the social housing sector with the same funding as the private sector for fire safety work and calls on the Government to give social housing landlords the same access to funds for building safety remediation as private landlords.

Recognising the level of financial risk varies significantly across the sector, the report recommends the Regulator of Social Housing takes a more proactive approach to regulating individual providers: where registered providers have significant financial reserves, the Regulator should be encouraging them to finance repairs and other works residents need but where registered providers face more financial risk the Regulator should be engaging with them more regularly.

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