My three wishes for the comprehensive spending review 2019
In her latest blog, CIH's head of policy and external affairs Melanie Rees sets out the top three housing issues she'd like CSR19 to address.
It’s no understatement to say that a lot has happened since Philip Hammond, then Chancellor of the Exchequer, announced that there would be a comprehensive spending review over the summer, concluding with the autumn Budget.
There’s some debate about whether the review will cover a three-year or a 12-month period. Some are even wondering if it will happen at all given everything else that’s going on now!
So what are the ‘top three’ housing-related things I’m hoping to see?
1. Increased grant funding for homes at social rents
We know we need around 90,000 new homes each year at the lowest ‘social’ rents - in 2017/18 we built only 6,466. Added to this, our modelling shows that we’ve lost 165,000 of the most affordable homes since 2012 through a combination of Right to Buy sales and conversion of social rented homes to affordable rents when they become empty. So we’re actually going backwards.
That’s why CIH has joined forces with the National Housing Federation, Shelter, Crisis and the Campaign for the Protection of Rural England to call on government to provide subsidy of around £12.8 billion per year over ten years to build the homes we so desperately need. This might sound like a lot of money to ask for, but it represents around 44 per cent of total build costs, with the biggest contribution coming from a combination of private borrowing, cross subsidy from sales, the implied cross subsidy from section 106 contributions by private developers, and discounted land values.
We also need to bear in mind that government has already committed £51 billion to housing with 79 per cent of it supporting the private market through schemes like Help to Buy. Redistributing existing funding so that new social rented homes get a fairer slice of the cake would go a long way towards investing in our country’s future.
There are early signals that our new Prime Minister sees housing as a priority – but is that just shorthand for increasing home ownership? With such strong evidence of need, it’s important that we continue to bang the drum for homes at social rents.
2. More help with housing costs so that people can find a decent, affordable place to call home
Various welfare policies and cuts since 2010 have made it very difficult for people on low incomes to find a decent, affordable place to call home.
One of the biggest problems lies in the freezing of local housing allowance (LHA) rates since April 2016 following years when increases were well below rising rent levels. Our research shows that, while LHA rates used to allow people receiving help with their housing costs to afford any property in the bottom 30 per cent of their local market, this is no longer the case in 90 per cent of local authority areas. In the worst affected areas, as few as 5-10 per cent of properties are now affordable for tenants in receipt of LHA.
So CIH is asking government to restore LHA rates to a level where they cover 30 per cent of local rents and make sure that they keep pace with future rent increases.
3. Funding for new and existing supported housing
Supported housing is a vital resource which not only enables people to live well and safely but also prevents and reduces demand on public services, like social care and health, which are already under pressure.
Along with the rest of the sector, CIH welcomed government’s confirmation that people living in supported housing would continue to have help with their housing costs through the welfare system. This gave certainty to residents and providers. But, following a 69 per cent cut in housing related support budgets between 2010 and 2017, many vital services, including provision for people fleeing domestic abuse, have been greatly reduced or lost altogether.
We need to be able to meet people’s specialist housing needs and give landlords and support providers the reassurance they need to invest in new and existing supported housing. So CIH is asking government to provide a national, ringfenced funding stream to make sure that this happens.
You can see CIH’s full submission to the comprehensive spending review here.