Rachel Reeves has announced plans to increase social rents for the next decade in order to boost affordable housing
Rachel Reeves has announced that she plans on increasing social rents over the next 10 by inflation + 1%, in order to help affordable house building.
The intent is to encourage affordable home building through giving more cashflow certainty to councils and housing associations.
The move itends to boost affordable house building
Affordable house building has been sluggish for years now, as housing associations, non-profit organisations, have been left to build social housing on their own as local authorities stopped building.
As such, they have both been left to wrestle with unmanageable debts, and a cap on social rents has neutered their ability to build affordable housing further.
The decision is likely to be lauded by housing associations, but will have mixed receptions from those living in social housing as it could negatively impact their living situations through increased living costs.
Specialists in housebuilding have commented on the plan
Sean Keyes, the CEO of Sutcliffe Consultancy, said: “Labour has made big commitments to address the severe lack of quality housing that has left an unacceptable number of people living in temporary accommodation or worse still, on the streets. I have spoken on numerous occasions about how urgent action is needed to ensure more quality housing is being built to meet the ever-growing demand across the UK, and I understand the necessity for the Chancellor to raise social rents, of its current average level of £93 per week, to improve the viability of new-build housing projects, with new houses costing on average £160,000. The numbers do not work.
“However, I am concerned about the potential pressure this will place on those who rely on social housing and the stability of existing social rent levels. I understand that local authorities are struggling with debt and large backlogs, meaning local authority house building has almost come to a standstill. I question if this is the best route to take in the first instance. So, I eagerly await Rachel Reeves’ budget in October to see if alternative funds can be generated.”
