It was good to see that the latest funding announcement from Homes England of £7.5B included indicative allocations of 50% for social and affordable rent properties. This was a significant success for the sector who had lobbied for funds for discounted rent against indications of a programme which may have previously only supported home ownership products. However the Government have also indicated that they expect with some restrictions these properties would have a ‘Right to Shared Ownership’ rule applied to them, which while providing a pathway for those renting into home ownership, may further erode supply of rental properties in the future.
The publication of the NHF’s report ‘People in Need’ gives an indication of the challenge if we are to really resolve the affordability crisis in housing and provide the range of housing needed to meet demand, with 8 million people in some form of housing need, of these it estimates that for 3.8 million of these people (1.6 million households), social rented housing would be the most appropriate tenure. Further with the likely differential impact of the pandemic on lower paid occupations this is forecast to further increase the demand for affordable housing. The analysis went beyond existing waiting list analysis as this underestimates need given the eligibility criteria, hence issues such as:
- Concealed households – where individuals or family units are living within another household, including adult children who wish to move out.
- Overcrowding – where a home is not big enough for the number of people living in it.
- Affordability – where a home is too expensive.
- Suitability – for instance where a family with children is in a home with no outside space, or where a home is not adapted to an older person’s needs
- External condition – where a home appears to be in poor condition
were also take account of in determining the levels of housing need. While this differs from traditional demand analysis it provides a very stark reminder of the levels of housing need and the continuing requirements for discounted rental models
Traditional models of provision will not meet this level of need and the NHF with wider partners, are exploring different approaches through their ‘Homes at the Heart’ initiative.
Alongside the announcement of the new affordable housing programme were indications of proposed changes to the shared ownership housing model. This for many provides the best means of accessing home ownership due to the lower deposit requirements and has been very successful in meeting a demand from particularly first time buyers. The proposals include:
- Reduces the minimum initial share people can buy from 25% to 10%.
- Allows people to buy additional shares in their home in 1% instalments, with heavily reduced fees.
- Introduces a 10-year period for new shared owners where the landlord will cover the cost of any repairs and maintenance
The intention is to make the model more accessible for a greater proportion of people and a more dynamic and accessible process to staircase while protecting the owner from possible high repairs costs. While these proposals will be subject to consultation, there is concern the additional costs and processes to accommodate these changes may actually see housing providers moving away from this form of supply.
Meeting the challenges of the housing crisis remains one of the biggest challenges in levelling up. In a post pandemic world of difficult choices we will need to redouble efforts to find new and imaginative ways to meet this most fundamental of human need.