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Here’s how to tackle Britain’s housing crisis

Without investment in social housing, waiting lists grow – as will the number of people trapped in hotels, hostels and B&Bs.

By Fiona Fletcher-Smith

There are now more than 100,000 households living in temporary accommodation in England – the highest level since records began. This grim milestone includes more than 130,000 children: enough to fill the O2 Arena seven times over.

The latest government figures serve as a stark reminder of the deepening problem of housing supply shortages, decades in the making – and the people it is hurting the most. Housing insecurity is just one symptom of Britain’s housing crisis, which at its heart stems from the chronic lack of homes available for social rent.

The G15 is a group of London’s largest housing associations. Together, members provide a home for one in ten Londoners, and we are the largest providers of affordable housing in the capital. We also see the terrible impacts of Britain’s housing crisis; widespread overcrowding because appropriate accommodation is unavailabl­­­e, and too many people stuck on waiting lists, without hope for a home at all.

According to research from the Building Research Establishment (BRE) consultancy, it is costing the NHS around £1.4bn a year to treat people who are affected by poor housing.

There are also knock-on economic impacts that stem from the housing shortfall. Spending on housing benefits has doubled since the early 2000s, to help fund the cost of housing low-income families in private rented homes. Spending on homelessness services and housing people in temporary accommodation has increased by a staggering 61 per cent in the last five years. All of this is syphoning public money out of the system and significantly increasing costs to the taxpayer.

A national social-home building project would not only reverse this trend, but it would also drive wider societal and economic progress. More housebuilding means more jobs and employment, more demand for skilled workers, more money pumped through local communities, and more opportunities for regional growth. By giving security to millions across the UK, social housing also acts as a springboard to a better life.

As a country, we have delivered sufficient affordable housing at pace and scale in the past.

The housing association sector has traditionally been seen as counter-cyclical and able to deliver in times of economic hardship. During the 2008 financial crisis and recession, increased government investment enabled us to keep on building. So, can the same happen this time? To answer this, we must first ask ourselves: how do housing associations fund development?

In simple terms, it is through a mixture of our surpluses, government subsidy in the form of grants, borrowing from lenders, private market investment and rental income. With inflation at levels not seen in a generation, all these forms of funding are being eroded. As a sector, we are ready and willing to take on long-term investment programmes, but we need political commitment and stability to do so.

Housing associations are natural engines of growth, but as we weather the current economic storm, we are having to do more with less. We’re faced with the challenge of finding the balance between competing priorities, of continuing to deliver new homes at the same time as fixing unsafe buildings, regenerating ageing estates and decarbonising stock.

In a climate of financial constraints, more and longer-term grant funding will only go so far.

Rent increases in social housing were capped at 7 per cent by the government for 2023-24, and the picture of what future caps will be beyond this remain uncertain. While we completely understand the impact of the cost-of-living crisis on residents, there needs to be a consistent approach to rent policy underpinned by a steady and secure income stream. A long-term settlement to secure our financial future, and maintain affordability for residents, will give investors and lenders greater confidence in the viability of the sector.

Another impactful response would be the reintroduction of the rent convergence mechanism. Its absence leads to an annual shortfall in rental income of £67m to G15 members. Reintroducing this would offset some of the impact of the rent cap and create additional resources for providers to build more affordable housing.

Innovative funding models and a fresh look at the way grants can be used would also support development. Replacing outdated homes as part of wider estate regeneration is a vital part of solving Britain’s housing crisis – and we need specific grant funding to support this. G15 housing associations are investing record amounts to improve the quality of existing homes, but there are many properties that are no longer fit for purpose and cannot be restored.

When it comes to keeping land public, a requirement to release land for affordable housing will benefit the public in the long term. Rather than prioritising the one-off sale value of a site, a focus on the best long-term value will unlock the supply of more of the homes we need, all while meeting other service needs and alleviating pressure on the public purse.

We cannot afford to sit back and let the housing crisis continue unabated. Without investment in social housing, waiting lists will continue to grow, and so will the number of people trapped in hotels, hostels and B&Bs.

G15 members have set out our stall to act in our determination to build more affordable housing. With long-term political commitment and collaboration across national and local government and the private sector, we can begin to imagine a future where everyone has a decent place to call home.