Government plans fall short of 600 extra low-cost rented homes a week needed

New analysis from the independent Joseph Rowntree Foundation (JRF) shows how nearly 600 additional low-cost rented homes need to be built every week in order to fix the broken housing market and help low-income families escape poverty.

Plans announced by the Government will deliver less than 100 new low-cost rented homes a week, one-sixth of the extra supply needed – a level deemed to fall far short of the number required.

Unless the Government ramps up the supply of low-cost rented homes, England will see a shortfall of 355,000 affordable homes by the end of the Parliament, following successive years of undersupply between 2011 and 2022.

JRF is calling on the Government to use its forthcoming Social Housing Green paper to commit to building 78,000 affordable homes a year so more families can enjoy a decent and secure life.

Doing so would ease the pressure on families trapped in the expensive and insecure private rented sector.

Across the country, low earners face eye-watering private rents, in particular in London, the South East and Home Counties, where rents are eating up to 40% of their earnings, more than twice the national average. Many are constituents in some of the country’s most marginal parliamentary seats, as well as in areas represented by Government Ministers and Shadow Cabinet.

Campbell Robb, chief executive of the independent Joseph Rowntree Foundation (JRF), said:

“The Prime Minister has recognised that the housing market is broken and it’s welcome that the Government wants to get the country building the homes we desperately need. But this must include homes that people on low incomes can afford. The Government’s existing plans risk falling far short of the numbers of affordable homes required to ease the strain on families facing eye-watering private rents.

“Voters across all wage brackets want to see action on housing and it is simply not right that so many people in our country are locked out of the opportunity to build a decent and secure life because of crippling housing costs.

“The forthcoming social housing green paper must commit to increasing the supply of low-cost rented homes. The Government can start by building 78,000 genuinely affordable homes a year. By fixing our broken housing market, we can help release people from the grip of poverty.”

The JRF analysis shows:

  • 78,000 low-cost rented homes are required in England every year to meet demand, or 1,500 every week. But on average 47,520 affordable homes have been built in England each year since 2011, leading to a cumulative shortfall of 182,880 homes over the last six years. It means 577 new affordable homes are needed every week to make up the average 30,000 shortfall.

Affordable housing delivery England 2011/17

  • If this rate continues, the shortfall will reach 335,000 by 2021/22 and will result in more people struggling to make ends meet because of their housing costs. The Government has made some steps in the right direction. For example, the announcement of an additional £2bn of investment in 2017. However, it is only expected to deliver around 5,000 additional social rented homes each year – less than 100 a week.
  • Private rents are unaffordable for low earners in over half (53%) of the country. The analysis shows that in 171 out of 323 English Local Authorities even the cheapest rents are unaffordable for residents in the bottom 25% of local earnings. In these areas, the cheapest 25% of rents would cost people on low wages more than a third of their earnings every month, a common measure of housing affordability.
  • The London Borough of Westminster has the most unaffordable rents, at 79% of the pay packet of a low-paid resident, followed by Kensington and Chelsea (77%). Monthly rent-to-earnings ratios run at over 40% in much of the South.
  • 20 areas are held by Cabinet members, junior ministers and whips among the Conservatives – including the Prime Minister Theresa May and Boris Johnson. Eight members of the Labour shadow cabinet, including Jeremy Corbyn, represent areas where rents are unaffordable for people on low wages.
  • There are 19 seats targeted by Labour where low earners are paying more than a third of their earnings on rent. For the Conservatives, there are 11 seats on their target list where low-earners are facing high housing costs.