When Andy Burnham took to the stage of the People’s History Museum in Manchester this summer to announce “the biggest council housebuilding programme since the postwar period”, he sent a clear signal: he wants to be the Prime Minister that finally relegates homelessness to the history books.
My organisation works on the frontlines of a housing emergency that has been spiralling for decades. Homelessness is at record-high levels. Almost 5,000 people sleep on the street on any given night.
And this is just the tip of the homelessness iceberg. There are more than 176,000 children in England growing up in often grotty and unsuitable temporary accommodation – that is equivalent to the population of Norwich.
We have been banging the drum for new social homes to address the devastating shortage of safe, secure and affordable homes in this country. That’s why the new Prime Minister’s words were music to my ears.
Social homes are the only genuinely affordable type of homes for homeless households, with rent typically 33 per cent of the market private rent.
They are affordable and also come with lifetime tenancies, which gives security for families, and is the basis on which people and communities have the foundations to thrive.
The council housing revolution Burnham has promised is essential to ending the housing emergency.
How did things get so bad? It is due to failed housing policy and blunt refusals from politicians of all stripes to address the root cause of the issue. Since the 1980s, Britain has lost almost 1.5m council homes, mostly though Right to Buy, and successive governments have failed to replace them.
The results have been catastrophic. Homeless families are crammed like sardines into tiny, dank, one-room bedsits, watching damp and mould climb the walls, and without any space to cook, play or for children to do their homework.
And that temporary accommodation is increasingly located miles outside of the local area. London families are being shipped to Blackpool or the south coast, where they are suddenly cut off from certain jobs, schools and their support networks, which has devastating consequences for their wellbeing and mental health.
More than one million households are stuck on social housing waiting lists. Rocketing private rents are pushing more people into poverty and pulling money out of the wider economy.
At the moment, it would take a whopping 119 years to clear existing housing waiting lists. But none of this is inevitable, and building social homes in the numbers needed is possible. In the 1960s and 1970s, councils built over 2.2m homes in total – 40 per cent of all homes delivered in that period. It is that level of radical ambition that the Prime Minister’s pledge must speak to.
Some real progress on housing has already been made since the 2024 general election. Alongside limiting Right to Buy and the passage of the important Renters’ Rights Act through parliament, the government established a new Social and Affordable Homes Programme, investing £39bn over its ten-year lifetime.
In its current formation, 60 per cent of the new funding programme is earmarked for social rent – amounting to 18,000 new social homes per year. While this is a good start, to end the housing emergency we need 90,000 social rent homes built a year for ten years.
The Prime Minister should consider reversing the massive drop-off in the delivery of homes directly by local councils. Last year, councils were only able to deliver around 4,000 new social rent homes.
While this is the highest level since the 1990s, it remains a steep decline from their role as major housebuilders at the height of the post-war period.
This lack of building is not because councils don’t want to build. The most recent government figures show that councils spend an annual £2.8bn on temporary accommodation for homeless households, up 22 per cent in just one year.
The reason councils can’t build the homes is because of the way finances for housebuilding are currently structured. Almost all councils which own homes have a Housing Revenue Account (HRA) – a ringfenced account that covers income and expenditure of a council’s housing stock.
In the 1980s, new restrictions came into play for councils that massively slowed down their ability to build social homes using the HRA.
Alongside this, the introduction of Right to Buy further disincentivised building as councils would often see homes sold off faster than they could build them.
Then in 2012 there was a further blow to council’s ability to build. Councils were given a new council house financing agreement that involved taking on historic debt from central government.
Unfortunately, successive governments repeatedly broke their side of the deal, forcing councils to sell off more homes through heavily discounted Right to Buy sales than they could afford to replace.
This has left councils with mounting interest payments and a huge debt to pay back, which has now reached a staggering £31.8bn, cutting off their ability to invest in building new social homes.
Shelter, along with more than one hundred councils in England, argue the HRA debt should be removed from council balance sheets.
Modelling done by Savills for Shelter found that for every £1bn of debt written off, up to 8,900 new social rent homes could be delivered.
It shows that removing the debt in full would unlock the capacity and potential for councils to deliver up to 284,000 social rent homes nationally, while crucially still being able to invest in their existing stock.
Action on HRA debt will allow the Prime Minister to deliver the vision he set out at the People’s History Museum.
Other measures should include access to low interest loans for councils, amending the fiscal framework to encourage investment in council building and bringing forward spending in the Social and Affordable Homes programme to ensure desperately needed social rent homes get built within this parliament.
Finally, the government must commit to an overall target for social rent homes. This will provide a way to measure success and a guide to housebuilding across the country.
The Autumn Budget is a crucial window for the Prime Minister to make good on his promise to deliver a mass programme of council housebuilding. He and the Chancellor must use it to tackle the HRA debt and get councils building again. From that, hope and a pathway to ending homelessness will come.
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