An early glimpse into the new edition of the UK Housing Review, to be published at the start of February, reveals that investment in social housing has reached its highest level for 20 years but is due to plummet again when the cuts take effect in April 2011.
The review describes how overall gross social housing investment in Great Britain rose again in 2009/10, to the highest level in real terms for almost 20 years – up by over 80 per cent since the previous decade. The strongest annualised growth was seen in Scotland. Taking account of all private finance investment, the Review concludes that “the last two years have seen overall investment in social housing at its highest sustained level (in real terms) for three decades”.
“Going right back to the 1970s, in only in one earlier year – 1989/90 – was expenditure higher. This resulted from a coincidence of exceptional factors – peaking right to buy receipts in the late 1980s housing market boom, together with landlord action to pre-empt government spending restrictions that were announced before they took effect.”
For the Chartered Institute of Housing, which trailed the Review this week, Director of Policy and Practice Richard Capie said: “The last two years have seen record investment in social housing across Britain, both from central government and importantly through private finance. This allowed the provision of more homes, essential community regeneration and important improvements in existing homes. We have now entered a very different era, with 50 per cent cuts in cash terms to housing budgets in England and around 19 per cent in Scotland. We are in the midst of a housing crisis with fewer than half the homes we need being built. This latest research shows the sheer scale of the dramatic cuts we are now seeing in new housing. These are a body blow to first time buyers, low income households and the construction sector.”
Figures on cuts to housing investment for 2011-14 for England are taken from the National Affordable Housing Programme which was £8.4bn in 2008-11 and will be £4.5bn in the three years from 2011/12. Accounting for the inclusion of mortgage rescue and the recovery of empty homes this represents a cash terms cut of 50 per cent. In Scotland the draft budget prefigures a cut in housing and regeneration spending from £488m to £393m, a cash cut of 19 per cent. The Scottish Federation of Housing Associations estimates that allowance for spending brought forward in 2010/11 means that the real reduction in 2011/12 will be over 30 per cent.
The starkness of the figures adds strength to the points made by Tony in his post on how the anti-recession stimulus is running out with potentially dire consequences for the construction sector of the economy.
The website of the UK Housing Review is http://www.york.ac.uk/res/ukhr/index.htm 2010-11 and contains a wealth of statistical and financial information about housing in the UK. It is edited by Professors Steve Wilcox and Hal Pawson.