A report just published by the think tank, Capital Economics, commissioned by a range of organisations including of the Local Government Association and the fantastic campaign group Social Housing Under Threat (SHOUT), has reported that if the government was to invest in 100,000 new social rented homes a year, it would generate savings to the public purse of between £102 billion and £319 billion over a 50 year period. Click here for the full report.
The report allows for differing economic performance post Brexit, hence the difference in the projected savings.
The reason for these savings is because people claiming housing benefit would be paying lower rents in social housing than the more expensive and ever increasing rents in the private rented sector.
What the report does not comment on is the impact of these savings should these new homes be subject to the Right to Buy. Around 40% of former council houses are now ending up in the private rented sector, with rents three to four times those of the rents charged by councils.
The evidence provided by Capital Economics is basic common sense and offers compelling economic logic. It makes it all the more bewildering that in the government’s latest funding announcements for 2016 to 2021 nothing is allowed for social rented housing. It is all going on initiatives such as Starter Homes and much attention, time and effort has been focused on extending the Right to Buy to housing associations.
What Capital Economics did not assess are the additional savings to health, education, etc. that other research has shown is derived from the provision of good quality and affordable social housing.
Perhaps someone could explain to me just why housing policy is so wedded to policies that benefit the few and make no economic sense. I just don’t get it.