Government set to miss its targets for the number, area and type of new homes

7 December 2022

No target set for affordable homes amid national housing crisis

Government is likely to fall short on its affordable homes housebuilding targets says the Public Accounts Committee in a report today. Government is likely to deliver 32,000^[1] homes short of the aims of its 2016 and 2021 affordable homes building programmes. The Department for Levelling Up, Housing and Communities admits it does not expect to deliver the intended benefits of the 2021 programme and has already downgraded its forecast, expecting to achieve 157,000 new homes in its 2021 programme of house building against a public target of up to 180,000. The Committee says that DLUHC does not seem to have a grasp on the considerable risks to achieving even this lower number of homes, including construction costs inflation running at 15-30% in and around London.

Government has committed to building 300,000 new homes overall every year by the mid-2020s. It says some of these homes will be delivered through the Affordable Homes Programme, but there is no target for how many of the new builds should be affordable.

Homes for social rent are the only affordable option for many people and provide the highest value for housebuilding money. Government recognises the saving on future housing benefit costs of building homes for social rent. But a ministerial decision means that half of the homes in the 2021 programme will be for ownership rather than rent.

Government has not calculated potential savings from reducing the number of people in temporary accommodation, though it is costly for taxpayers and potentially disruptive for families. It is also set to miss targets to deliver 10% of homes in rural areas and may struggle to deliver 10% of homes as supported homes - though that would save on social care costs. The failure to set any standards for homes to be net-zero may necessitate “expensive retrofitting in the future”.

Councils face penalties have few powers to insist that housing providers build the right type of homes for local people The committee has called on DLUHC to publish transparent data on where homes are built by local authority, or information about the type or size of homes in annual reports to the Committee.

Chair's comments

Chair of the Committee, Dame Meg Hillier MP, said:

“The Government knows affordable rented homes offer the best value for money. Many people in high-cost areas simply can’t afford to rent privately or buy their own home and there’s a desperate need for affordable, secure rented homes. But amid all the building targets there isn’t one for affordable or socially rented homes as part of government’s overall housebuilding targets.

Local authorities know where and what homes must be built to address the national housing crisis but don’t have the power to act. The human cost of inaction is already affecting thousands of households and now the building programme is hitting the challenges of increased building costs. This does not augur well for ‘generation rent’ or those in desperate need of genuinely affordable homes.”

^[1] Figure 1 on page 7 of the report summarises progress against the home-building targets in the 2015, 2016 and 2021 programmes

Further information

Image: CCO