"Future housing policy should be sufficiently flexible to recognise regional variations with grant funding directed towards supporting new homes that will have the biggest impact on people’s housing challenges"
- Steve Partridge - Savills
Global real estate services provider, Savills has found that more social rented homes are “needed everywhere”, with a significant step up in delivery. However, affordable housebuilding appears to have peaked.
Currently, there is an annual affordable housing shortfall of 128,000 homes which is set to grow, with construction starts in the alternative sector (predominantly affordable housing) down by just over a third in the 12 months to September 2024.
Savills said this was based on the government’s recently proposed changes to the standard method for housing needs, adding up to 373,000 homes per year across all English local authorities.
The greatest affordable homes gap is in the south of England. Here, an additional 62,600 affordable homes are needed each year.
Savills’ research points to policy measures to address the shortage. These include restoring financial capacity to housing providers through a long-term rent settlement and clear direction for planning policy. The report also suggests that funding and decision making is devolved to local authorities and regional mayors.
Following the Budget, the government is consulting on a five-year rent settlement, with social housing rents to increase in line with the Consumer Price Index + 1%.
Savills also said that social rented homes should be provided alongside other affordable tenures, including intermediate rent or affordable home ownership options.
Steve Partridge, head of Savills Affordable Housing Consultancy, said: “Unmet affordable housing needs are enormous, and they vary between and within regions. Future housing policy should be sufficiently flexible to recognise regional variations with grant funding directed towards supporting new homes that will have the biggest impact on people’s housing challenges.
“Affordable homes of all tenures are required if we are to build the homes people need and solve the housing crisis. This is important to consider as the government creates a new housing strategy for England from Spring 2025."
