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Housing: The state of the Nation

Friday 28 April 2017

The Public Accounts Committee has responded to Government housing plans saying that the Department for Communities and Local Government are too dependent on current housebuilding market leaders and lack ambition.

In its report, Housing: State of the Nation, the Public Accounts Committee has examined the Governments housing policy and highlighted the growing problem of housing need and homelessness in England.

In many areas of the country, housing has become increasingly difficult to afford. First-time buyers now on average need to borrow over three times their income, and private tenants in London have seen rents go up twice as fast as earnings in a decade. Homelessness has risen dramatically since 2009–10, with more than 70,000 families in temporary accommodation at the end of March 2016.

The number of homes built in England has lagged behind demand for decades, with the need for housing growing faster than its supply in recent years.

With more than half of all new homes now built by just eight of the UK's largest firms, the future of housing is dependent on the existing market and a handful of dominating private developers to realise its ambition.

Whilst the Department for Communities and Local Government acknowledges the scale of the ‘housing gap’ between supply and demand, its ambitions do not come even close to addressing it. The human costs are emphasised by the growing problem of homelessness, with the number of families living in temporary accommodation rising from 50,000 in 2011–12 to 72,000 in 2015–16.

The National Audit Office (NAO) report Housing in England: overview found that in 2015–16, councils’ spending on temporary accommodation amounted to £840 million, a rise in real terms of nearly half (46%) in just five years.

The total estimated government spending on housing in England between 2015 and 2016 was approximately £28 billion, with the most significant element of this being housing benefit. In 2015–16 there were 4.1 million claimants in England, costing around £20.9 billion.

In order to keep up with population growth, between 225,000 and 275,000 additional homes are now needed each year. Despite this, the DCLG's ambition of overseeing the construction of one million additional homes over the next five years equates to an average of only 200,000 net additions per year.

Even if the government's target of a million new homes is achieved, the Department acknowledges that a considerable gap between the rate of housebuilding and actual housing need would remain, thus problems of affordability and homelessness are likely to persist for some years to come.

In recent days however, the Homelessness Reduction Act which places a new duty on local authorities to help prevent homelessness has been given Royal Assent and is now an Act of Parliament - so does this mean change is on the horizon?

Well we will have to wait and see. Due to the general election on 8 June 2017, the Committee has now closed the inquiry and Government responses to committee reports are expected to be published in the next Parliament.

The Government has produced a selection of factsheets which provide background information and advisory measures to the Homelessness Reduction Bill.