Government urged to boost social homes and restore LHA rates

A think tank is urging the government to ringfence its £39 billion Social and Affordable Homes Programme (SAHP) for social rented homes.

Research by the Resolution Foundation suggests that using the full £39 billion to build council homes for social rent would still leave the government around 5,000 homes a year short of its target to deliver 300,000 affordable homes annually by 2036.

The think tank is also urging the government to unfreeze Local Housing Allowance (LHA) rates.

Need to strike a balance

Hannah Aldridge, senior research and policy analyst at the Resolution Foundation, said the government must balance building more homes with keeping them affordable.

She said: “Andy Burnham has put boosting affordable housing centre-stage and with 134,000 families in temporary accommodation in England and 1.3 million on the housing waiting list, this ambition is welcome and necessary.

“The government will need to strike a balance between affordability for tenants and building at scale. By making careful use of the Social and Affordable Homes Programme, private developer contributions and the National Housing Bank, the new government can boost the supply of social rent housing and build more affordable housing overall.

“But building takes time. Close to one million low-income renters already face a shortfall between their rent and housing support, and that gap will hit a record high this autumn. With housing support frozen for the rest of the decade, the shortfall in support will get deeper unless action is taken swiftly. The new Prime Minister should commit to relinking housing support with local rent levels in the upcoming Budget.”

Restore LHA rates

The Resolution Foundation argues the government could increase the number of affordable homes by giving developers greater flexibility over the mix of housing they build during periods of weak demand. It estimates this approach could deliver around 2,000 extra affordable homes a year.

It also urges ministers to restore Local Housing Allowance (LHA) rates to the 30th percentile of local rents, warning that low-income families already face an average 20% gap between their rent and the housing support they receive.