All available funding should go to social rent homes – £3.9 billion a year is insufficient to resolve the housing crisis
The delayed Spring Spending Review included the announcement that the Affordable Homes Programme would provide £39 billion over ten years, an average of £3.9 billion a year. Whilst this is an improvement on the Tories AHP, it is nowhere near enough to begin to resolve the housing crisis.
The £2 billion previously announced for 2025/26 was said to offer funding for 18,000 homes. On the same basis £3.9 million would support 35,100 homes a year. This is way short of the 90,000 social rent homes a year that Shelter and others say is necessary to begin to resolve the housing crisis. Moreover, this money is for “social and affordable homes”. The government is maintaining the Tory definition of “affordable housing”. So Homes England will continue to offer funding to “affordable rent” (up to 80% of market rents1), the various forms of “affordable ownership”, and “affordable private rent”, as well as social rent.
How many of the 35,100 homes would be social rent, and council housing, is not clear. The head of Homes England has said that currently 60% of grant is going to social rent homes. If the same ratio was to apply to the £39 billion, then social rent would comprise only 21,060 homes a year. You would then have to factor in the number of homes lost through Right to Buy and demolitions to get a figure for ‘net additional’ social rent homes.
What is clear is that the charade of “affordable housing” should be ended. Whatever funding is available, all of it should be devoted to social rent housing, the most economic and affordable for tenants.
In relation to rents the government has announced that it will penalise already poor tenants by giving them 10 years of above inflation rent increases. This is very bad news for tenants who don’t have their rent covered by housing benefit. Arrears for council tenants in England have risen from £203 million in 2015/16 to £397 million in 2023/24. A decade of above inflation increases will make matters worse. It is a substitute for adequately funding Housing Revenue Accounts.
The consultation on “rent convergence” is also bad news. The policy was introduced by the New Labour government to drive council rents up to the higher level of housing associations rents2, in the hope that if rents for the two tenures were the same then tenants would be less inclined to oppose ‘transfer’ (privatisation) of their homes to housing associations.
Talk of “a historic turning point” is wishful thinking. To begin to resolve the housing crisis more than £10 billion a year is necessary for social rent homes. With 126,000 households in temporary accommodation, including 165,000 children, and 1.3 million households on the waiting lists, the government should make council housing its first housing priority.
Campaigners for council housing need to campaign against above inflation rent increases and ‘rent convergence’, for all funding to go to social rent homes, and for an increase in funding way beyond that proposed.”
Martin Wicks
Secretary, Labour Campaign for Council Housing
1In 2024 the average social rent in England was £99.75 as compared to the “affordable rent” of £150.32.
2HA rents were roughly 20% higher than council rents because HAs borrowed money from private sources at commercial rates, whereas councils borrowed from the Public Works Loans Board at lower rates of interest.
Labour Campaign for Council Housing 