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Wed, 8 July 2020

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Coronavirus crisis will see ‘catastrophic’ drop in new social housing, ministers are warned

Coronavirus crisis will see ‘catastrophic’ drop in new social housing, ministers are warned

Labour said the report showed that the Conservatives had made a “nonsense” of the concept of affordable housing.

4 min read

The coronavirus pandemic will lead to 84,000 fewer homes being built this year and a “catastrophic” fall in social housing starts, according to new analysis.

Research carried out for charity Shelter by the estate agents Savills predicts that overall output will tumble from 255,000 new homes built last year to just 171,000 this year, exacerbating the country’s housing crisis.

A cut in capacity on building sites who have to follow social distancing rules, reduced demand for market sale homes, and a heavy reliance on private over social housing are all blamed for the steep fall.

Shelter predicts that construction of homes at social rent could tumble to a “catastrophic” low of 4,300 units a year, the smallest number since the second world war.

The warning came as polling for the Institute for Public Policy Research think tank found that one in five (21%) Britons are worried they will not be able to afford their rent or mortgage amid the pandemic.

Meanwhile 13% said they had had to cut back spending on essentials in order to pay their rent or mortgage, while 10 percent said they had run out of money a week or more before the end of the month.

Labour said the report showed that the Conservatives had made a “nonsense” of the concept of affordable housing. 

Shadow Housing Secretary Thangam Debbonaire said: “Even before the Covid crisis, millions of households were living in homes costing more than a third of their income. These homes are too often poor quality and insecure.
 
“Everyone should have a decent home and nobody should lose their home because of coronavirus. Yet the Government has failed to implement simple measures to help people who have lost work to continue to pay their rent. As a result, many are already in arrears.
 
“The government urgently needs to expand the supply of truly affordable, high-quality, safe, secure and carbon-neutral housing so that everyone can afford a decent home.”

As Boris Johnson gives a major speech in Dudley promising to “build, build, build” to tackle the Covid-19 slump, Shelter is calling on the Government to bring forward £12.2bn of affordable housing spending already pledged over the next five years over two instead.

Shelter chief executive Polly Neate said the Government had “a perilously short window to avert a lengthy housebuilding crash that will wipe out tens of thousands of new homes and jobs”.

She added: “By bringing forward planned spending and building social housing the government has the chance to avert disaster.
 
“There are over a million households on social housing waiting lists, and even more likely to join them as the recession bites – making the case for social homes self-evident. The pandemic has shown that a safe home is fundamental, but just not enough people have one.”

The IPPR meanwhile wants the Government to tackle the crisis by bringing in a type of social housing subject to “living rent”, which would see rent levels tied to average local incomes.

They are calling for the initial round of these homes to be aimed a Covid-19 key workers including nurses, shop workers and cleaners who may not qualify for regular social housing. The IPPR’s polling shows 78% would support such a move for those on the coronavirus frontline.

IPPR research fellow Jonathan Webb said: “For too long the cost of housing has been determined by the market and not by people’s ability to pay. The current pandemic has shown how this approach leaves people vulnerable to unexpected and unprecedented changes in their income.

“To build a fairer and more affordable housing system, we need to ensure that ability to pay is the key principle in housing, not profit. Building more social housing whilst also ensuring rents are linked more closely to incomes will help ensure we have enough homes that are genuinely affordable.”

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