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LGA urges building for social rent

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The government has wasted billions of pounds by failing to invest in homes for social rent, the Local Government Association (LGA) has said.

According to the LGA, building 100,000 social rent homes a year over the past 20 years would have saved money from the housing benefit bill – since social rents are lower than private sector ones - and generated tax income from increased work for the construction industry.

Tenants would also have enjoyed higher disposable incomes by avoiding being pushed into costly and insecure private rented homes.

The LGA said its new research provided evidence that the government should use the spending review - expected this year - for a “renaissance in council housebuilding needed to increase housing supply, boost affordability and reduce homelessness”.

It said the number of homes built for social rent fell from 40,000 in 1997 to 6,000 in 2017, which had sent people to the private sector led to an inflated housing benefit bill for the government.

Research by Cambridge Economics found that if two million social rent homes had been built over 20 years, rents would have been £1.8bn lower so reducing claims for housing benefit.

The homes would have cost an extra £152bn in government borrowing but every pound spent would have generated a £2.84bn return welfare savings and increased tax revenues.

LGA housing spokesman Martin Tett (Con) said: “Every penny spent on building new social housing is an investment that has the potential to bring significant economic and social returns.

“Now is the time to reverse the decline in council housing over the past few decades. This is the only way to help families struggling to meet housing costs, provide homes to rent and reduce homelessness while also providing economic growth and lowering the housing benefit bill.”


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Readers' comments (1)

  • I doubt that "...every pound spent would have generated a £2.84bn return..." - that would be quite some investment! I presume you mean a £2.84 return.

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