October 22, 2020

New survey shows extent of social and affordable housing crisis

Housebuilders are struggling to build enough social and affordable housing to meet demand, according to a new survey released today (Friday 23 March).

At a time when social housing is high on the public agenda, housebuilders expect just 16% of the total number of properties they will build over the next year to be classed as social housing and just 20% as affordable homes (19% in London).

The survey of more than 400 housebuilding companies in England – including 100 in the capital – was carried out for McBains, the leading construction consulting and design agency.

The findings in detail: Social housing

According to the latest government statistics published in January 2018, local authorities in England owned 1.6m dwellings in 2017 – a fall of more than 50% since 1994 when the number stood at 3.67m.

The survey carried out for McBains therefore asked housebuilders how many council homes they had built over the last two years and how many they expect to build over the next 12 months.

On average, respondents had been contracted to build 191 homes in the last two years (rising to 263 in London).  But of these, just 16% on average were social housing.  In London – where demand is greatest – it was just 15%.

Housebuilders said they expected, on average, to build 181 houses over the next year (255 in London).  But just 16% of these on average (and 16% in London) are expected to be classed as social housing.

The findings in detail: Affordable housing

Similarly, housebuilders were asked about the number of affordable homes they had built over the last two years and how many they expect to build over the next 12 months under Section 106 legislation.

Section 106 is intended to guarantee that developers provide a certain proportion of affordable housing in developments of more than 10 homes: normally this is intended to range from 35% to as much as 50% depending on the local authority in question, but often it is less than this in practice.

Of the homes built by respondents over the last two years, just 22% on average (and 22% in London) were affordable homes built under Section 106 legislation.

Neither are rates expected to increase over the next year, with housebuilders expecting just 20% of these to be classed as affordable homes.  In London – again, where the shortage of affordable homes is most acute – it was just 19%.

According to the latest figures published last month by the Office for National Statistics, the average house price in England is £244,000 but £484,000 in London.

Michael Thirkettle, Chief Executive of McBains, said: “Our survey suggests that local authorities are not commissioning social housing in anywhere near the numbers needed to meet demand.

Michael Thirkettle

“Similarly, the chronic need for affordable homes, in London especially, is not being met with less than one in five homes classed as affordable.   It means those most in need of housing will find it harder than ever to find accommodation within their budget.

“Developers are frequently accused of stifling the construction of new homes by ‘landbanking’ – sitting on land so that site values increase.  But often the reason is that obtaining planning permission can stretch on for months, if not years, while the developer has already invested heavily in the project.  Streamlining the planning system to help developments get off the ground quicker is required.”