95p of every £1 in Government housing cash goes on benefits, not new homes - report

Posted On: 
21st March 2018

Less than 5% of government housing cash is being used to support housebuilding compared to 82% in the 1970s, new research has revealed.

The vast bulk of government cash is spent on benefits not housebuilding, according to new research.

According to the Chartered Institute of Housing, in 2015/16 the bulk of the government's £25 billion housing spend was ploughed into housing benefit, with mortgage interest support accounting for around £200m.

While during the same period just 4.3% was put towards housebuilding initiatives.

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The organisation revealed that this is a marked shift compared to 1975/76 levels of housing investment, when 82% of the £22.1 billion total was spent on increasing housing supply.

The CIH review also found that real terms investment in social housing has fallen from £13.7 billion in 1979/80 to 5.1 billion in 2016/17.

It added that of the government's £53 billion housing budget up to 2020/21 only one fifth of it will go on affordable housing, with the rest focussed on the private sector.  

Responding to the findings, shadow housing secretary John Healey said: “After eight years of failure, the Conservatives have no plan to fix the housing crisis and build the low-cost homes the country needs.

“You can’t make housing more affordable without building more affordable homes, and the number of new social rented homes being started has fallen from 40,000 with Labour to fewer than 1,000 last year.

“A Labour Government will build 100,000 genuinely affordable homes to rent and buy each year, including the biggest council housebuilding programme in more than 30 years.”

CIH chief executive Terrie Alafat CBE said: “The government has pledged to deliver 300,000 new homes a year.

“That is absolutely the right ambition, but we are never going to reach that target unless more investment is switched to bricks and mortar.

“Investing in new homes would help make housing more affordable for people who are struggling – and it is also the only sustainable way to cut the housing benefit bill in the long-term.”


The Federation of Master Builders has responded to this article saying “The Government must target more of its spending on building new homes because in the long run, this is the only solution which will lift the UK out of the housing crisis',​  Read the full response here

The National Federation of Builders has responded to this article urging the government 'to take another look at how they can better encourage and fund the construction of new homes'. ​Read the full response here