Inquiry into how much new housing will be affordable to rent overdue

It has always seemed like a figure plucked out of thin air with plenty of warnings that such a target is not on track to be met and question as to whether it is actually achievable. Indeed, there were no clear distinctions about the kind of homes that would be constructed.

Now the Housing, Communities and Local Government Committee has launched a long reaching inquiry into the long term delivery of new social and affordable rented housing, pointing out that at the moment just 3% of the 300,000 are set to be social homes.

Housing charity Shelter has said that over three million new social home would need to be built over a 20 year period to address social housing need. Amounting to 150,000 new social homes per year this is significantly higher than the Government’s current plans.

The new inquiry will investigate the effectiveness of the Government’s current strategies to boost social and affordable rented housing provision. This will include the adequacy of funding levels, as well as programmes and incentives for key stakeholders, such as local authorities and housing associations, to stimulate delivery.

The Committee will also look at the challenges facing different areas of the country and consider what lessons can be learnt from successful schemes in other countries. It says that social housing has been left to drift for too long and there needs to be a coherent long term strategies to remedy this.

But there also needs to be a culture change, a change so that renting is not seen as inferior to owning a home. There are benefits for tenants, highlighted by the banning of fees in England which the Secretary of State for Housing, James Brokenshire, says will save renters £240 million a year, up to £70 per household.

There has been a lot of moaning and suggestions that it will mean rents rising. All I will say that the ban on fees already exists in Scotland and there has been no evidence of a corresponding rise in rents.

The Act also caps the tenancy deposits that renters pay at the start of their tenancy at the equivalent of five weeks’ rent. This gives people the assurance that, legally, they cannot be expected to pay more than this, where the total annual rent is less than £50,000, to secure a property.

But there are other changes in the lettings sector. A new piece of research shows that young people are being forced into smaller rented homes because of the cost and again if they buy due to the high price of property in the UK.

The study from financial firm Hargreaves Lansdown also says that many under-35s looking to downsize are thought to be tenants in parts of Britain where rents are going up quickly. They are forced to move to smaller properties each year because their wages are not increasing at the same pace.

And there is not much good news for home owners as the latest lender index shows that the annual rate of house price growth in the UK was below 1% for a sixth month in a row in the year to May 2019, and down 0.2% month on month.

Robert Gardner, Nationwide’s chief economist, said that new buyer enquiries and consumer confidence have remained subdued in recent months but tries to be optimistic by adding that indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable.

But he acknowledged that the high level of deposits needed for many first time buyers is still a barrier even although first time buyer numbers reached 359,000 in the 12 months to March, just 10% below 2006 peaks, and the cost of home borrowing is still low.