Call for public money to be put into building more social homes

Public money is being wasted on “propping up rents in a failing market” rather than on building affordable new homes, it has been claimed.

David Orr, chief executive of the National Housing Federation, has warned that social housing funding is in “crisis” and that the tragic fire at Grenfell Tower shows it “can no longer be ignored”.

A report released by the organisation, which represents housing associations and social landlords, found that funding for new social homes fell from £11.4 billion in 2009 to £5.3 billion in 2015 and that since 2011, no government money had been made available to build homes in England for low-paid people to rent.

The report also showed that housing someone in a privately rented home costs an average of £21 more than in a social home.

As he prepares to deliver a speech at the conference of the National Housing Federation on Tuesday, Mr Orr said: “It is absurd that we’re spending less on building social housing than we did in the nineties – there are even more people today on housing waiting lists than then, despite increasingly stringent criteria.

“We know we need more, better quality social housing. And yet, rather than putting public money into building the homes we need, we are propping up rents in a failing market. Ultimately, this is poor value for the taxpayer and has a knock-on effect on everyone struggling to rent or buy.”

The report also said that while the amount of money going into building new social homes had fallen, more than ever was being spent to support people to live in costly rental properties through housing benefit.

Over the last 20 years, spending on housing benefit has risen from £16.6 billion to £25.1 billion.

Mr Orr added: “After the tragic fire at Grenfell, this crisis can no longer be ignored. The Government must be bold and make a break with the past by making money available to build genuinely affordable homes. There’s more than a billion pounds that remains unspent on Starter Homes. Let’s put this money to use and let housing associations build 20,000 of the genuinely affordable homes the nation needs.”

A Department for Communities and Local Government spokesman said: “Building more homes is an absolute priority for this Government and we are continuing to work closely with the sector. We introduced Affordable Rent in 2012 to maximise government investment and build more homes for below market rent.

“We’ve already delivered nearly 333,000 affordable homes since 2010 and have announced an additional £1.4 billion for our Affordable Homes Programme, increasing the total investment to £7.1 billion.”