Housing affordability and housing want are in an acute state of disaster in England. The variety of households ready to maneuver right into a social residence has grown yearly because the pandemic, peaking at 1.34 million households in 2025, an 18% enhance in simply 5 years. The power scarcity of social housing, mixed with a rising unregulated non-public rented sector (PRS) and a freeze on native housing allowance (LHA) has pushed greater than 135,000 households into non permanent lodging. This has an immense social value for households and forces councils into unsustainable financial positions.
In June 2026, shortly after securing his seat in parliament, Andy Burnham pledged to supervise “the largest council housebuilding programme because the post-war interval”, a dedication he has reiterated since changing into prime minister. To ship council houses on the scale promised, the federal government should construct on promising progress revamped the previous few years. On the centre of its latest efforts to recentre non-market housing is the 10-year £39 billion Social and Inexpensive Houses Programme (SAHP). Whereas the SAHP supplies much-needed longer-term funding certainty, it isn’t designed to ship the extent of council housing that the prime minister has dedicated to.
If the federal government is severe about delivering report post-war ranges of council and social housing, the SAHP should be scaled up. Funding should be front-loaded inside the 10-year programme and paired with reforms to extend entry to low-cost land and financing. Additional funding can be wanted in rebuilding hollowed-out council supply capability. Assembly the size of the prime minister’s ambition will want extra grant funding to be dedicated instantly and at future spending opinions. Inside the present spending evaluation 2025 interval (2026‒27 to 2029‒30), a top-up to the SAHP of £7.9bn that’s ringfenced for council and social housing may assist the supply of 104,000 council and social houses, a 64% enhance on present supply targets. That charge of development would put England on observe to ship 90,000 council and social houses per 12 months by 2032‒33, the minimal degree of social housing provide that organisations equivalent to Shelter and NEF assess as required to satisfy present want.
To make sure that a rise within the whole funding bundle and tempo of disbursement has the best social and financial affect, additional reforms are wanted to convey extra present dwellings into public and neighborhood management, and rebuild councils’ capability as drivers of supply. Acquisitions of present housing inventory can play a precious function in quickly boosting social housing provide and mitigating the fiscal value of the non permanent lodging disaster. The federal government additionally recognises the significance of range within the non-market housing system; a brand new Cooperative and Group Housing Fund can present seed funding to this section of the sector. Devolving additional powers to mayors will give areas the autonomy to reply to native want. This, paired with additional funding in native authorities supply capability, will assist re-establish councils – of their capability as publicly managed and democratically accountable establishments – as the first car for housing supply. Rebuilding council capability will take extra than simply time; it can depend upon structural reforms to the fiscal guidelines to make sure that council borrowing will not be handled unfavourably in comparison with lending to housing associations.
On this paper, we argue that social housebuilding since 1980 has misplaced its skill to behave as a counterweight to cycles of low demand within the non-public housing building sector, which it very successfully fulfilled earlier within the twentieth century. The post-war mannequin – whereby the monetary dangers and rewards of public housebuilding sat with the general public sector – separated the sources for constructing council houses from demand for market housing, making a countercyclical supply of housing provide that would proceed to ship during times of weak market demand. It supported a scale and tenure combine – usually near 100% social housing – that’s hardly ever achievable below right now’s supply mannequin, which is structurally geared in the direction of a lot decrease ranges of supply. With much less public subsidy, social housing provide relies on recycling earnings from non-public growth, both by Part 106 (s106) agreements with non-public builders or by councils and housing associations “cross-subsidising” social housing by constructing market houses. The result’s a elementary reversal of the post-war supply mannequin to at least one that’s primarily pro-cyclical.
Boosting the SAHP and bringing allocations ahead within the programme timeline implies discovering important extra capital in a fiscally constrained setting. In contrast to most different classes of capital spending, nonetheless, housing acts like a monetary funding in addition to a public asset. Capital spending on council housing provides the state a stake in any rises within the worth of land it acquires. It additionally builds an enduring public asset, which reduces long-run spending on housing advantages in comparison with right now: at current public spending subsidises the non-public rental market by way of social safety and nightly charges for emergency lodging, whereas acceptable spending on housing ought to scale back this invoice in future. That is the “bricks” versus “advantages” trade-off, the place capital funding builds an enduring public asset whereas income spending covers the price of not having constructed it. Extra broadly, the fiscal framework should assist, not discourage, funding in productive public belongings.
This paper’s total view is that attaining the federal government’s laudable ambitions for report council and social housing will solely be doable if it brings collectively a daring mixture of financial, monetary, and financial devices, to not point out tackling different non-financial constraints on housebuilding. Relying on its priorities, the federal government would possibly search to fund this programme with new revenue-raising insurance policies; whereas not the main focus of this paper, it factors to viable choices to offset extra spending on housing, like structural reforms to capital positive aspects tax and levying nationwide insurance coverage contributions on funding earnings. Latest programmes such because the £39bn SAHP are landmark steps in restoring an sufficient degree of social housing provision in England, however delivering “the largest council housebuilding programme because the post-war interval” calls for one other degree of coverage motion totally.
