Tag: Social housing

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A message to Andrew Griffith: cut build costs, not social housing

At the Conservative Party Conference yesterday, Shadow Chancellor Andrew Griffith promised to pare back regulation in a bid to cut the cost of building a new home by £50,000. Pledges include: scrapping changes to improve the energy efficiency of new homes; abolishing Natural England and the Environment Agency; and introducing a new ‘one stop levy’ on developers to replace the much-maligned system for delivering social homes and infrastructure through the planning system.

This blog will focus on the last of these, and why it is a tried and tested dead end for building social homes.

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How do planning obligations work?

Currently, Section 106 (S106) agreements and the Community Infrastructure Levy (CIL) secure a share of social and affordable homes as part of private housing schemes, as well as investment in roads, public transport, schools and doctors’ surgeries. Councils effectively cream off some of the profits from private development to ensure local people see and feel the benefits of new housing.

This system of planning obligations has the significant advantage of delivering social homes and infrastructure alongside private homes, but it also results in lengthy negotiations between councils, landowners and developers about exactly what will be provided, when and where.

These problems are aggravated by site-level viability assessments, which allow planning obligations to be negotiated down if a planned development won’t make enough profit to incentivise landowners to sell and developers to build. Because there is no standardised approach, viability appraisal is often described as a ‘dark art’. In some cases viability appraisals have been submitted showing a site is loss-making to reduce or eliminate social housing before it is sold on for a profit. The mistrust and uncertainty this has created adds time and cost to development.

The Infrastructure Levy: a cautionary tale

There have long been calls from academics, think tanks and others to replace S106 and CIL with a ‘one stop’ cash payment of the kind Griffith has just advocated. In fact, the last Conservative Government had a good go at doing so through its Infrastructure Levy, under which developers would pay a non-negotiable cash tax on the final value of private homes. But they ultimately ditched the deeply unpopular plans, widely seen as unworkable and likely to deliver worse outcomes than S106. 30 organisations – including private developers, councils, Housing Associations, planners and construction industry leaders – wrote to the then Secretary of State Michael Gove in favour or ‘retaining and continuing to improve’ the existing system of planning obligations. The current Shadow Cabinet should take note.

Below are four of the major drawbacks of switching from in-kind delivery to cash payments for the supply of social homes through the planning system.

1.    Fewer social homes in the places where they are needed most

If developers pay a financial levy instead of delivering social homes as part of private schemes, there is no guarantee that replacement homes will ultimately be delivered in the same area. Councils or Housing Associations would have to compete in the open land market for sites. In some places, suitable sites will not be available. Social landlords often struggle to compete with private developers’ land teams, which have greater resources, skills and experience.

S106 secures social homes in precisely the places grant has struggled to reach – places where higher demand for market homes pushes up land prices. Replacing it with cash risks fewer social homes in the least affordable places; more people in housing need moving away from communities, jobs, schools and care networks; more economically and socially segregated communities; and fewer direct benefits from new development for local people.

2.    Lower, slower social housing supply

An S106 home is a completed home ready for someone to move into. Before money raised from a ‘one stop levy’ can become a social home, the council or HA must assemble all the other ingredients needed to turn cash into homes: land with planning permission, a viable package of funding and finance, labour and materials. This is likely to take at least two years from start to finish. The result is fewer homes delivered later.

3.    Inflation and market changes erode the value of cash

Unlike a completed social home, the value of a levy transferred to a council is exposed to changing market conditions. By the time a council has assembled the other ingredients needed to turn cash into homes, construction costs will have increased, land values may have risen, borrowing costs may be higher, grant and other funding may have changed. Tax that would have funded a given number of homes when received will fund fewer homes several years later – a point backed up by research from University College London.

4.    Missed opportunities to rehouse those in need

Most importantly, every year of lost social housing supply is another year in which households remain in Temporary Accommodation, unsafe homes or on the streets. Councils would continue paying high costs for TA or other temporary solutions, and the taxpayer would continue paying high levels of housing benefit into private TA or to private landlords, rather than using the money for permanently affordable homes.

Taking on high build costs

The problem of rising build costs is real and pressing. The Home Builders’ Federation estimates they have risen by £76,000 per home since 2020. Surveys of social landlords likewise flag rising build costs as a key barrier to increasing supply.

Much of this reflects rising material and labour costs as geopolitical shocks have collided with a construction sector held back by stagnant productivity. But it is also true that builders of all types of homes are facing a sharp increase in the costs of policy compliance as many new requirements come into effect over a relatively short period of time: the Future Homes Standard, the Building Safety Levy and Biodiversity Net Gain, to name a few. These policies are needed to clear up the Conservatives’ mess on building safety while improving England’s resilience to the climate emergency. Nonetheless, they contribute to a genuine challenge.

The question is, would binning the Section 106 system help or hinder housebuilding? The recent experience of the Infrastructure Levy suggests the Conservatives’ proposal for a ‘one step levy’ would be wasteful distraction from the real work needed to drive down build costs, absorbing time and resources from industry and all levels of government – and it would, of course, produce fewer social and affordable homes, reducing overall housing supply and curtailing opportunities for innovation in the construction sector.

The Government has undertaken sweeping planning reforms to start controlling costs, with more planned – but planning reforms from central government are unlikely to be enough. Fortunately, there are many other opportunities to bring down build costs, such as smarter procurement, finally catching up with the rest of the developed world in the use of Modern Methods of Construction, and addressing the unusually low productivity of our construction sector.

While there is a role for central government, mayors will be best placed to seize many of these opportunities. As devolution progresses, I’d like to see mayors take on the build costs challenge. Could better organisation of funding and powers across housing, transport, planning and skills at the regional level strip out cost more effectively than any central government initiative? And could mayors do so by working with social housing, rather than against it?

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Housing-led regeneration is the key to unlock hope in left behind communities

“My belief is that your postal code does not determine your worth, value, or capabilities. However, when it feels as though where you call home isn’t worth investing in, people can lose their feeling of connection and their sense of value in ‘place’, subsequently disengaging completely. Through meaningful regeneration, residents in areas in the Gleadless Valley can look across the city and see a real, achievable future before them. A future that, by investing in their roots, can give them hope to grow.”

These are the words of Lara Joyce, Secretary of the Gleadless Valley Resident and Tenants’ Association, taken from the perspectives article she wrote for the Northern Housing Consortium’ s (NHC) Renew inquiry into housing-led regeneration.  

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A few weeks ago, Lara showed myself and members of the South Yorkshire Housing Partnership around her local area as part of one of our Renew site visits. Lara shared how the Gleadless Valley was held up as an architectural triumph when it was first built. More recently, however, it has become one of the UK’s 10% most deprived areas. Change has been promised since 2017 but never materialised, leaving residents frustrated and disillusioned. Now, through the efforts of involved residents like Lara working alongside dedicated council officers, trust is slowly being rebuilt, and at last there is hope. At the end of 2025, the ‘Vision for the Valley’ (developed with residents like Lara) was approved by Sheffield City Council. A community-led approach to reporting and managing fly tipping, anti-social behaviour and street maintenance is being rolled out, alongside a new park, signalling change is finally coming. Longer-term plans include over 1,000 new homes, refurbishment of existing properties, and improvements to community amenities and transport, although funding is not yet confirmed for all elements.

On the site visit, Lara told us:

“I want kids from this estate to look across the city and see a real, achievable future before them, a future that, with investment in their roots, can give them hope to grow.”

The wheels are certainly in motion for Lara’s vision to become a reality. However, Lara and the Gleadless Valley residents are not alone. There are lots of other communities in similar situations across the North, and we must make sure no one and nowhere is left behind. 

Why regeneration needs government support

Hearing Prime Minister Andy Burnham talk about regeneration as one of his top priorities offers hope. We have also seen action: additional flexibility in the Social and Affordable Homes Programme (SAHP) to support regeneration, the National Housing Delivery Fund, the Pride in Place initiative, and the Northern Growth Strategy all promise investment in the North’s cities. Deepening devolution through Rewiring of the State should give local leaders more flexibility to address local priorities, and is something the NHC has advocated for consistently for years. 

However, whilst housing-led regeneration undoubtedly brings substantial benefits to local communities and economies, it is extremely challenging to deliver in the North. With lower land values and high remediation costs, many schemes are simply not viable without Government support. Many successful schemes I’ve seen have only gone ahead because social housing providers have pooled multiple funding streams and invested their own funds at levels that just wouldn’t be sustainable on a larger scale.

Our Renew report, Unlocking 500,000 homes in the North, was based on evidence from providers who own or manage 70% of the North’s social housing. We found that in many areas of the North, housing-led regeneration is an essential part of delivering new homes and making sure no one and nowhere is left behind. 

Making existing funding work harder

There are some simple measures the Government can take now to make housing-led regeneration on estates, in town centres and on brownfield land more achievable. The Government has already pledged to give Mayors more control over SAHP funding. Giving Mayors greater flexibility to fund council and social rent homes, through Continuous Market Engagement, without a cap on regeneration activity, will help them address the housing needs in their local area. Specific KPIs for Homes England around regeneration would also help. At the moment, all Homes England’s KPIs are still around new supply, despite it being the Government’s housing and regeneration agency.

An allocation of National Housing Bank funds for housing-led regeneration would help schemes progress. Extending the National Housing Delivery Fund to ten years would also have a significant impact. We estimate this would allow all of the North’s brownfield land to be remediated, unlocking 320,000 new homes.

Whilst these changes would be welcome, ultimately the substantial gap in support for regeneration can only be filled by a dedicated place-based fund. Our Renew inquiry recommends providing northern Mayors and combined authorities with £500m per year for 10 years in devolved, flexible funding as part of integrated settlements where they exist. This would empower Mayors to bridge viability gaps for strategically important schemes, and would significantly increase the capacity of social housing providers to replace or refurbish homes that have reached the end of their lives. Our research suggests this place-based fund would tackle the vast majority of the 100,000 end of life social homes in the North over the next decade. As well as ensuring thousands of people could live in better quality, healthier homes, this would also reduce repair costs and free up capacity to build more new homes.

Our Renew visits over the summer, have highlighted a piecemeal approach to regeneration, where social housing has been transformed but privately owned properties have been left untouched. Even in areas with high concentrations of social housing, privately owned and rented homes are pepper-potted around estates due to Right to Buy. Dedicated flexible funding would make it possible to buy poor quality private homes, including empty homes, and refurbish them into social housing, making a real difference to whole neighbourhoods.

A new National Centre for Regeneration in the North could spearhead investment in capacity, working closely with Mayors and combined authorities to drive forward regeneration and develop a workforce that’s ready to deliver.

Putting communities at the heart of regeneration

In the words of Lara Joyce, if we want regeneration to give people “hope to grow”, getting community engagement right is a must. The Renew site visits have shown the importance of housing providers and other partners working closely with communities, keeping them up to date and listening to and acting on their feedback. In the coming weeks, we have further work planned around community engagement to feed into policy development.

To unlock growth in every postcode and make sure no one and nowhere is left behind, we must act now on housing-led regeneration. It is the only way to make sure everyone has access to a safe, warm, home in a place they’re proud of.

The NHC is leading the Renew inquiry into housing-led regeneration for northern growth, supported by Homes for North and Muse. The inquiry is chaired by Lord Richard Best OBE DL and the Renew Westminster Group Chair is Andrew Cooper MP.

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How to increase investment in council housing and capitalise on the economic benefits

The Prime Minister has made clear his ambition: to “oversee the biggest council house building programme since the post-war period”. This is a hugely positive step forward for the Government’s housing policy; it marks a generational break with 45 years of housing policy that failed to articulate a clear aim beyond merely maximising overall output – with little regard to affordability for people on low incomes or at risk of homelessness. And, crucially, it will help to capitalise on councils’ knowledge of local housing need, significant land value capture powers, and masterplanning capabilities.  

Yet the decline of council housing was driven not only by housing policy, but by the rise of restrictive fiscal policy that actively constrains government investment in social homes and has pushed Housing Revenue Accounts (HRAs) into existential financial jeopardy. Despite being justified under the guise of ‘fiscal responsibility’, debt-to-GDP spiked sharply during austerity while investment in public assets like social housing collapsed and vital services were cut – demonstrably impoverishing both people and the state.

At the Autumn Budget, to realise its ambitions on council housebuilding, the Government must reconnect political ends with economic means and drive a change in economic consensus that places social housing investment at the centre of national renewal. In an upcoming report on council house building, we argue the Budget marks a clear opportunity for the Government to cancel £31.8bn in HRA debt to unlock councils’ capacity to build, covered in detail here, and do more to bring forward and increase funding – ensuring its fiscal framework supports rather than hinders greater investment in council and social homes.

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The financial and economic case for cancelling HRA debt and increasing investment

Modelling commissioned by Shelter and undertaken by Pragmatix sets out an ambitious scenario for the Government to cancel HRA debt and provide the necessary investment to deliver 284,000 social rent homes within a 10-year trajectory – in addition to those already expected to be delivered through the Social and Affordable Homes Programme. Pragmatix estimates that the economic benefits of the policy would outweigh its costs within twenty years, around a decade after the final homes are built. Over the report’s 60-year appraisal period, the modelling estimates a net economic benefit of £141.5 billion, including substantial savings to the public sector from reducing reliance on more expensive forms of housing. Government departments are estimated to save £64.7 billion over the period, including £26.3 billion for the Department for Work and Pensions, while savings to councils from reducing the number of households in temporary accommodation eventually reach £672 million a year.

Cancelling HRA debt is broadly fiscally neutral; the majority of debt is owed to Treasury, meaning it is largely a series of inter-government transfers, involving cancelling debt that the public sector owes to itself.

The fiscal framework should support rather than hinder investment

Within this Parliament, debt cancellation and delivery, as outlined above, is also compliant with the Government’s ‘investment rule’, using around 56% of the current ‘headroom’ as of the OBR’s 2026 spring forecast. While council and social housing is a more-than-worthy use of investment ‘headroom’, this self-imposed restraint on public investment creates artificial trade-offs with other policy areas and reduces the Government’s appetite to increase funding. More flexibility is therefore needed within the fiscal framework to ensure that the long-term economic net benefit of investing in social housing is recognised.

The Government’s fiscal framework disincentivises social housing investment

The narrow and short-term focus of the current fiscal framework discourages social housing investment and hinders the Government’s aim of delivering a council housing revolution. Firstly, the Government’s rolling target (the ‘investment rule’) requires its chosen debt measure to be falling as a share of GDP in the third year of the OBR’s forecast period – but this disregards the longer-term savings and additional revenue social housing generates.

Secondly, the Government’s chosen debt measure – Public Sector Net Financial Liabilities (PSNFL) – fails to value the physical asset created on the Government’s balance sheet when it funds a new social home.

Thirdly, PSNFL creates a two-tier fiscal system that favours social housing delivery through housing associations and for-profit registered providers over public-led social housebuilding from councils and development corporations. Unlike most EU countries that use a general government debt measure, PSNFL includes the entire public sector. It means that our fiscal rules include the debt of our public social housing providers, even though their debts are paid for by rents and other independent income as opposed to taxation or wider government expenditure – i.e. they are classed by the ONS as ‘market producing’.

Finally, because of this public-sector focus in the debt measure, the central government financial asset recorded under PSNFL when investing in council housing (created by loaning money to HRAs via the Public Works Loan Board) is actually netted off by the liability held by the loan recipient (the council or development corporation) in the national accounts. This leaves only the liability on the Government’s balance sheet created from the borrowing it undertook to ‘fund’ the loan. In contrast, liabilities held by private registered providers to pay back loans to central government are excluded from PSNFL, making these loans more fiscally attractive for central government: the asset (the loan) and liability (borrowing to ‘fund’ the loan) held by central government cancel each other out.

The consequences for social and council housebuilding are stark

Rather than seeing good growth and healthy public finances as the outcome of social housing investment, the current framework forces housing policy towards day-to-day spending on housing benefit and expensive temporary accommodation – which flows outwards from the public sector to private landlords. Investment remains far below what is needed:

  • Social and Affordable Homes Programme grant, while welcome, only enables the delivery of 18,000 social rent homes a year on average – we need to deliver 90,000 a year for 10 years to end the housing emergency.
  • Interest rates from the Public Works Loan Board available to HRAs remain far too high with 50-year maturity lending at around 6%.
  • HRAs and public development corporations are excluded from £2.5 billion in 0.1% interest loans recently provided to housing associations and for-profit providers, a distinction that reflects their different treatment within the fiscal framework.

Fiscal reform is needed to support the scaling up of council housing delivery

To deliver its promise of a council housing revolution, the Government must scale up current grant funding and available low-cost finance to much higher levels. In doing so, it must ensure that councils and development corporations, who were the key players of the post-war social housing boom, are empowered to support the Government’s social housing ambition. In an upcoming report later this month, we argue that, if the Government remains committed to not change the current fiscal rules, it should instead exclude HRAs and development corporations from PSNFL. This would finally end central government incentives to limit their borrowing, devolving power to HRAs and development corporations, and support the Government to provide them with the low-cost loans needed to deliver social housing at scale.

Email your councillor today and ask them to add their name to a letter to the chancellor, urging him to knock down the barriers to getting councils social homes again.  https://campaigns.shelter.org.uk/tell-your-cllr-fight-for-social-homes

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If Andy Burnham is serious about a council housebuilding revolution, what does he need to know about the self-financing settlement for the HRA? 

I was one of the many council housing finance geeks working with councils to influence the self-financing settlement for Housing Revenue Accounts (HRAs) back in 2012.

It was aimed at making council housing finance more accountable and transparent at the local level as well as more business-like and efficient.  The process of moving from a national subsidy system to individual self-financed HRAs was also designed to make the finances sustainable in the long term and allow for growth and investment. 

It was a hard-won deal between tenants, councils and different governments over a number of years that ended up not delivering on its promise from the outset, only to further suffer from a series of policy and financial setbacks in the years following 2012. These have meant that most councils do not have a sustainable HRA – just 14 years after the original settlement.  The sector is now asking the Government to put things right, but there are many options to look at. 

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Why self-financing replaced the ‘tenant tax’

Before 2012, HRA revenue finance was tightly controlled at a national level within the HRA Subsidy System.  The key feature was an annual calculation made to capture surpluses generated by most councils through their rents and redistribute them to others whose rental income did not cover their necessary expenditure. Part of the surpluses also went to the Treasury.

This was dubbed the ‘tenant tax’ by tenant groups who campaigned for change in the years running up to the settlement.  They objected to their rents being used to repair homes at the other end of the country when new homes or improvements could have been made in their areas.  Councils also objected to the lack of control and uncertainty inherent in the annual determinations, which left them with no ability to plan long term or manage maintenance over multi-year projects. 

During earlier years of the subsidy system, the Treasury topped up the pot to ensure that basic management and maintenance could be covered by all councils. But as rents increased and assumed expenditure did not, the overall system went into surplus. By 2008 the vast majority of councils were paying into central government, and the Government was making a surplus on council housing. 

This only increased the arguments for a self-financing deal and could have provided for a more generous and sustainable settlement, had it not been for the financial crash and its impact on wider government finances. 

How a sustainable settlement became unsustainable

The deal that was finally offered to councils by the Coalition Government in 2012 meant most councils had to take on additional debt and did not build in any allowance for investment in new homes. These councils had effectively to buy themselves out of the system to compensate the Treasury for its loss of annual income.  Councils therefore took on debt which the Government calculated would be sustainable for them to hold alongside managing their homes. Collectively, councils took on £8 billion of extra net debt. 

This was not an appealing offer to many councillors or tenants, especially where Housing Revenue Accounts started out debt-free, but ultimately, they agreed it was a price worth paying for a more independent future which would allow them the freedom to make local decisions and plan over the long term. 

Unfortunately, the assumptions underpinning the self-financing deal did not last long –Right to Buy was immediately ‘re-invigorated’ and many more sales were made than assumed, reducing the rental income the 2012 debt calculation was predicated on. 

Rent policy was then changed significantly. Instead of increasing steadily by inflation, rents were reduced by 1% in cash terms each year from 2016 to 2020 taking a significant amount of money out of councils’ budgets.   

Alongside that loss of income have been unforeseen drivers of increased costs; the need for increased building and fire safety work and meeting new decent homes and energy efficiency targets, alongside much higher cost inflation than expected.  Whilst councils were always prepared for some ups and downs, these pressures have pushed some to breaking point. There is simply not enough money in the system to allow council housing to be run properly.

Why debt write-off alone won’t solve the problem

Shelter has recently published further analysis on debt in the HRA by Savills which builds on work they did for CIH in 2024 to look at an updated debt settlement.  Savills conclude that “there is little or no capacity to support the ability for local authorities to contribute meaningfully to the government’s target of 1.5million new homes and therefore to enhance the delivery of social rent homes.” Shelter is therefore calling for the write-off of all HRA debt. 

We agree there is an urgent need for HRA debt to be looked at, but councils’ ability to invest in new homes will still be limited by the needs of their existing homes.  Due to different original rent levels, the type and age of the homes they own and the level of housing need in their areas, each local authority is in a very different position now compared to 2012. London and other inner-city authorities are facing significantly increased costs in dealing with building safety and the need for wider regeneration, whilst others have lost more homes through the Right to Buy and lack the land to replace them.    

A new settlement for a new council housebuilding era

We are therefore calling for the Treasury and MHCLG to be tasked jointly with reviewing these issues to facilitate council house building.  The review should meaningfully engage with councils and tenants as well as sector experts at the earliest opportunity to ensure that key stakeholders concerns and aspirations are fully understood and that lessons from the past are learnt. 

It took almost a decade for councils, tenants and the government to develop and agree the principles for the original self-financing settlement. We urge the new administration to start this work urgently so that councils can be placed back onto a sustainable footing to invest in both existing and new homes.  Tenants have already waited long enough.

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Two things the new Prime Minister could do immediately to boost social rent supply

Andy Burnham’s commitment to deliver the biggest programme of council and social housebuilding since the post-war era is both ambitious and hugely welcome.

For the millions of people trapped in England’s housing crisis, including the 176,000 children growing up in temporary accommodation, that ambition cannot come soon enough.

The good news is that momentum is already building. Thanks to decisions already made by the Government, councils and housing associations increasingly have the confidence, funding and policy certainty to ramp up delivery of social rent homes. NHF figures show a 57% increase in social rented homes started last year.

These are the green shoots of a renaissance in social housebuilding. But they are fragile and progress could easily stall. To sustain momentum and translate ambition into delivery, there are two immediate steps the new Prime Minister could take.

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The first is to immediately confirm successful bids for Strategic Partnership funding under the Social and Affordable Homes Programme (SAHP). These bids have been submitted and assessed and are now awaiting political approval before they can be announced. Councils and housing associations have schemes waiting, planning secured, and just need the funding confirmed to get building tens of thousands of homes. A summer of delay and uncertainty on grant funding could bring the current momentum to a halt. This creates a real risk that providers will be forced to delay, scale back or even abandon development opportunities, ultimately leaving families trapped in unaffordable temporary accommodation or private rent for longer.

The second is to top up the funding for this and subsequent years of the SAHP – either via redirecting existing budgets immediately or via new funding at the next fiscal event. The £39bn for social housing announced at last year’s spending review was a generational shift in support, but it is spread over 10 years, with the funding profile weighted toward later years, while many schemes are ready to proceed now.

We could build more homes, more quickly, on schemes that are ready to go, if more funding was available early on, for both Continuous Market Engagement and Strategic Partnership funding routes.

Doing these two things immediately would sustain momentum, get spades in the ground and more households into desperately-needed social rent homes as quickly as possible.

There are opportunities to go much further, to deliver the increase in social housebuilding we need, whether through seizing the opportunities of devolution, New Towns, Land Value Capture, reforming council housing debt rules, or exploring new models of public ownership. Councils and housing associations stand ready to work alongside communities and the government to unlock these opportunities, but they will take time to bear fruit. In the meantime, we must maintain and accelerate the progress already being made.

England’s housing crisis is one of the defining social and economic challenges of our time. It damages life chances, drives homelessness, places unsustainable pressure on public services and undermines economic growth. The government has laid important foundations for a new era of social housebuilding. The priority now is to turn that ambition into delivery – building more homes, more quickly, for the people who need them most.

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Britain Needs Better Homes

Over the past weeks, we have all sought shelter in our homes from abnormally high temperatures. Households will have struggled to keep their home cool, just as they struggled to keep their property warm last winter. Many people were stuck inside properties suffering from damp, mould, poor ventilation, and general disrepair. The extreme heatwave has been a stark reminder that we don’t just have a problem with the number of homes being built, but a significant housing quality crisis too.

For millions of households, their home actively harms the health, wellbeing, and life chances of everyone who lives there. According to the English Housing Survey, 15 per cent of properties fail the Decent Homes Standard. Those who rent privately are twice as likely to occupy a non-decent home (22 per cent), compared to those who live in a home for social rent (10 per cent). This could be due to hazards like fire dangers and trip hazards, poor energy efficiency, or broken roofs and windows.

While every part of the country has non-decent homes, there are significant geographical differences. Nearly one in five properties in the South West and Yorkshire (18 per cent) are non-decent. This is twice as high as the North East (9 per cent), and significantly higher than London (13 per cent). And the problem is often worse in more rural areas, as local authorities like Westmorland and Furness, Cornwall, and North Yorkshire have large proportions of people living in substandard homes.  

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Labour’s record

Since 2024, the Labour Government has acted on poor-quality homes. The Renters Rights’ Act will apply a new Decent Homes Standard to the private rented sector, and Awaab’s Law will tackle damp, mould and other hazards in social and private rented homes. The long-term social rent settlement will enable providers to invest in existing stock, while they build thousands of additional high-quality homes.

But the next Prime Minister must go further. While building 1.5m new homes is a necessary ambition, improving existing stock so everyone has access to a safe, secure and accessible home should be a priority too.

This would speak to our history as a party. For more than a century, Labour in government has focused on raising housing standards. The first Labour Government passed the Wheatley Act 1924 that delivered a wave of high-quality council housing, providing an alternative to the slums. The Attlee Government repaired hundreds of thousands of existing homes in six years, while the Wilson Government provided grants to improve housing stock of every tenure. And New Labour’s Decent Homes Programme delivered a sustained programme of public investment that improved around one million social homes. 

It is also something that the public favours. Our survey with YouGov found 66 per cent of English adults supported investment to ‘improve existing properties to meet basic housing standards, even if it means reducing the number of homes that are built each year’. Just 15 per cent favoured building more homes at the cost of neglecting improvements to existing properties.

Building while improving

However, the Government does not have to choose between more homes and improvements in existing stock. There is an enormous opportunity to target public investment in streets, blocks of flats, or entire estates for regeneration that builds decent homes in every community. Indeed, the Northern Housing Consortium has estimated over 500,000 good quality homes in the North alone can be created through housing-led regeneration.  

The Fabian Housing Centre has set out how we can improve homes in every part of the country, with a specific focus on tackling poor-quality rented accommodation.

The Government should invest £470m a year over a decade specifically to replace and regenerate homes across streets, flat blocks, and whole estates. All funded regeneration projects should be required to show no loss of homes, particularly for social rent. Where affordability challenges are highest, these regeneration projects should be required to increase the number of homes through greater density – particularly for social rent. This funding should be devolved to strategic authorities to deliver estate renewal, in partnership with local councils.

This should be accompanied with specific funding for improvements and maintenance in the social housing sector. A new long-term fund to provide investment over ten years, in predictable waves, will enable all social renters to live in a safe, secure, warm and accessible home. And by helping social housing providers with their maintenance and improvement bills, the Government can unlock financial capacity to build new social homes.

The Government has rightly prioritised housebuilding in the first half of this parliament and must continue to do so. But existing homes need investment too. Funding for regeneration and social housing improvement is required. The next Prime Minister must deliver this to tackle the housing shortage and the housing quality crisis together. That can be a legacy for Labour to be proud of.

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Can England afford (not) to build council homes?

Before the 2024 General Election, I had the privilege to work with England’s largest council landlords on Securing the Future of Council Housing. The report set out five key recommendations to allow councils to once again play a major role in housing supply, and to refurbish and improve existing homes and neighbourhoods after decades of under-investment.

It is an ambitious vision for a new, better relationship between central government and council landlords. Over 100 councils led by different parties across the country backed the report, laying the ground for a powerful coalition which has successfully influenced Government policy since. Every council involved has been essential in raising the volume of council housing’s voice, but particular credit should go to the London Borough of Southwark under Kieron Williams’ leadership for kickstarting the campaign, and to Sheffield City Council and Leeds City Council for helping it spread.

On Monday, Andy Burnham pledged the ‘biggest council housebuilding programme since the post-war period’ – a period when councils delivered over 4 million homes in 36 years. Since that time, more council homes have been sold than new ones delivered. It’s been a long wait, but it may finally be time for a renaissance in council housing.

But can we afford it?

Yet serious questions are being asked about whether we can afford it. This is not just because it costs money to build low-cost social homes. It is because councils are public bodies, and their borrowing is ‘on balance sheet’. Most social homes in England today are owned and delivered by non-profit Housing Associations, whose borrowing is ‘off balance sheet’. It doesn’t count towards public debt. That difference has shaped housing policy for decades.

In this blog, I’m going to try to demystify the impact of council housing on public debt, and how the UK’s fiscal rules change things.

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How council housing came under financial attack

Council housing is treated differently from all other council-owned assets in accounting terms. Council landlords keep rental income in a Housing Revenue Account (HRA), which is kept separate from other council income. This is to protect social tenants’ money, so it doesn’t get used to fund general council services.

In 2012, the Government and councils agreed a ‘self-financing settlement’ aiming to make HRAs more independent and more sustainable. The settlement was supposed to give councils the financial certainty to invest in their homes, but it was quickly ripped up. Social rents were cut and capped with little notice, borrowing rates for councils were increased overnight, and councils had to sell more homes with bigger discounts following Right to Buy reforms. Top it all off with a pandemic, geopolitical turmoil and rising inflation and interest rates, and the unsurprising result is that most HRAs are in poor financial health. A 2024 report from Savills and the Chartered Institute for Housing suggested that debt cancellation of £17bn would be needed to make HRA borrowing sustainable across the board. This means many council landlords cannot invest in homes in the ways communities need.

Accounting for council housing

In the UK’s national accounts, all HRAs are consolidated and treated as a single ‘non-financial public corporation’. This means they count towards public debt for the purposes of the UK’s fiscal rules. Fiscal rules are the Government’s self-imposed limits on how much it can borrow, spend and accumulate debt. They are designed to reassure financial markets that the public finances will remain sustainable and so keep the Government’s borrowing costs lower.

Before the 2024 autumn budget, the UK used Public Sector Net Debt (PSND) for our fiscal rules. Council housing performed particularly poorly under this measure. Borrowing to finance public investment – including in council housing – increased the headline debt figure, even if the Government acquired valuable assets in return.

The current Government switched from PSND to Public Sector Net Financial Liabilities (PSNFL). The new rules still count debt the Government owns, but they also count financial assets the Government owns – though not physical assets like homes.

This is where things get interesting for council housing.

By far the largest source of borrowing for council housing is from the Public Works Loan Board (PWLB): effectively, councils borrow money from the Treasury, which raises the money by selling gilts on the international markets. When the Treasury lends to council landlords in this way, under PSNFL it actually creates an asset for the public sector: the money councils owe to HMT.

The result is that investing in council housing is a lot easier than it used to be. Let’s say the Treasury agrees to ‘forgive’ £100 million of unsustainable HRA debt to give councils some breathing room, and councils then take out £100 million of new PWLB loans.

Under the old debt rules, this would have looked like the Government simply taking on more debt. Under the new PSNFL rules, it is treated more like cancelling an old loan and then making a new one. The council owes the Treasury £100 million, but the Treasury also owns a £100 million loan. That new loan is recognised as a public financial asset and is largely netted off public debt.

So there’s no reason not to invest in council housing?

Not quite.

New PWLB borrowing for council housing still increases the size of the Government’s balance sheet and the amount of money the Treasury has to raise from investors to finance the new PWLB loans: HMT has to borrow to on-lend to councils. It is unclear how markets would react to a large-scale increase in investment for council housing using the current model. That depends partly on the scale of new PWLB lending, but above all on investor expectations of the UK’s wider fiscal position.

There’s another problem for council housing. While PSNFL makes investing in council homes easier, it also makes other models of delivering social housing even more fiscally attractive. In February 2026, the Government announced a £2.5 billion scheme to provide loans to Housing Associations at 0.1% for 25 years. Incidentally, that’s a much better deal than councils are getting from the Public Works Loan Board at the moment!

Under PSNFL, these loans to HAs are ‘financial transactions’ because the Government acquires a financial asset (a loan) in exchange for cash. But unlike councils, when HAs take out loans from the Government it does not create a liability for the public sector, because their borrowing is ‘off balance sheet’.

If you can deliver the same kinds of homes using private borrowing via HAs, you may get the same policy results with less public sector borrowing and less gross balance sheet expansion. That should make it easier to maintain investor confidence and help keep the Government’s borrowing costs lower. And that may actually be key to increasing investment in social housing: if the UK can borrow more cheaply, we have more space to increase the size of funds like the Social and Affordable Homes Programme. That’s essential to unlocking more social housing supply.

Can we afford not to invest in council housing?

It’s complicated and there are no easy answers. But alongside asking if we can afford to build council homes, we also need to ask if we can afford not to. The clearest fiscal argument here concerns the high costs managing homelessness.

Councils in England now spend £7.7 million every day to put people up in expensive – often sub-standard – Temporary Accommodation. HAs play a vital role in tackling homelessness, but the buck for homelessness ultimately stops with councils. No one else is incentivised to act the way councils are. Getting councils off the bench and delivering homes may be the only way England stops managing homelessness and starts preventing it.

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Housing-led regeneration has untapped potential to tackle the housing crisis and to build a thriving North

Housing-led regeneration can unlock at least 500,000 good quality homes across the North of England and this is an opportunity that cannot be missed by Government.

As part of our Renew inquiry into housing-led regeneration for northern growth, supported by Homes for the North and Muse, we issued a Call for Evidence. The response was fantastic: we received submissions from organisations responsible for around 1 million of the North’s 1.4 million social homes, including insights from more than 160 regeneration schemes.

The message was clear – housing-led regeneration is essential to increase the supply of new homes, attract private investment, and boost economic growth in the North. It helps create great places to live; improves housing quality and residents’ health and wellbeing; generates jobs and skills opportunities; and promotes sustainability by providing greener, more energy-efficient homes that lower household bills.

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Housing-led regeneration in the North is not one single activity. It encompasses a wide range of interventions, from refurbishing individual homes to transforming neighbourhoods, reclaiming derelict land, and redeveloping urban centres. While these interventions differ in scale and approach, they share a common logic: that investment in homes and places can act as a catalyst for wider social and economic renewal. The scale of the opportunity is striking. Already, there are 100,000 homes planned in major city centre regeneration schemes, and our policy proposals aim to accelerate their delivery. Most of these homes are set to be built in our larger cities, so more support is needed to extend this to smaller towns and declining high streets to make sure no-one and nowhere is left behind.

A further 320,000 homes could be built on brownfield land; sites that are often derelict or underused but rich with potential to attract more investment and drive local growth.

Added to that, there are around 100,000 social homes which will be in need of regeneration over the next ten years. These homes tend to be concentrated in areas of deprivation and include older, colder terraced housing and tower blocks no longer fit for purpose. They do not meet the needs of residents, and weigh heavily on social housing providers’ balance sheets, preventing investment in new homes. For providers to play the fullest role in the delivery of new homes, and to prevent loss of social housing, ageing homes that require continual repair and investment must be renewed.

Despite its huge potential, a stubborn set of structural barriers continue to hold back housing-led regeneration in the North. Lower land values in many northern areas mean that developments are often less financially viable than in the South. At the same time, the high cost of remediating brownfield land, often contaminated or complex to develop, creates a funding gap that many projects cannot bridge without Government support.

The challenge is compounded for social housing providers. In the North, rental incomes tend to be lower, yet the costs of construction and refurbishment remain comparable to other regions. This creates a stark trade-off: invest in upgrading existing homes or inbuilding new ones.

The Renew inquiry’s recommendations set out how the Government can act to address these challenges and kickstart growth and opportunities in the North. Building on the very welcome £39bn, decade-long Social and Affordable Homes Programme for new build social homes, a £500 million per year, decade-long Place Based Regeneration Fund would provide the certainty and continuity needed to address ageing homes in need of replacement or refurbishment. Extending the National Housing Delivery Fund to a similar timeframe would unlock the most complex sites and help address the high upfront costs that currently deter development. Meanwhile, appointing a dedicated Minister for Regeneration could ensure cross-government coordination.

Equally important is building local capacity and trust. Establishing a National Centre for Regeneration in the North would help rebuild expertise, share best practice, and drive innovation. And placing residents at the heart of regeneration, through clear standards and rights, can ensure that development is done with communities, not to them.

The timing is critical. With increased devolution giving northern leaders greater control over housing, transport, and skills, there is a real opportunity to align policy and delivery in ways that were not possible before. Combined with significant government focus and investment in housing, the conditions are right to make a real difference.

Now is the time to put the final pieces of the jigsaw in place to tackle the housing crisis, build thriving places and healthier homes, and deliver northern growth. At the launch event for the Renew inquiry report in Parliament on Wednesday there was a real buzz in the room – I feel confident we can work together to deliver for the North, so that no-one and nowhere is left behind.

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Regeneration means delivering for northern communities

Poor housing touches every part of a person’s life, and the consequences can be profound. Families crammed into overcrowded homes, and the strain this places on children’s ability to learn and thrive. People living with damp and mould, and the damage this does to their physical and mental health. Households in draughty, poorly insulated properties struggling to heat their homes and keep up with rising energy bills.

Housing is a policy area where getting it right can truly transform lives, not only by ensuring people have a safe and secure place to live, but by improving educational outcomes, strengthening health, and helping families make ends meet. That is why this agenda matters so deeply; because a good, safe, affordable home is the foundation on which a good life is built.

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The Government understands this and its transformational investment in social and affordable housing marks a pivotal moment in national policy.  It does more than allocate funding; it signals a shift in purpose. After years of fragmented initiatives, we are beginning to see the emergence of a more ambitious, more place sensitive approach to tackling the housing crisis. It is an approach that recognises the diverse realities of our towns, cities, and rural communities, and the different tools required to support them.

Crucially, the Government has acknowledged that delivering on both housing and regeneration is central to its future mission. Tackling housing poverty, expanding the supply of social and affordable homes, and revitalising neighbourhoods are not marginal add‑ons, they are fundamental to economic growth, social stability, and national renewal. The Pride in Place programme, with its focus on reviving high streets and improving public spaces, underlines this commitment, linking physical transformation with wider social outcomes across education, health, and community safety.

What makes this moment especially significant is that ambition is now backed by serious investment. The Social and Affordable Homes Programme, the introduction of new low interest loans for social housing providers, and the launch of a decade-long Plan for Neighbourhoods show a willingness to think long-term. Many of the communities that stand to benefit from this investment are in the North. For them, these announcements are not abstract policy concepts, they represent the building blocks of a better future.

Many funding programmes under Conservative-led governments neglected communities in the North, but important changes to the Treasury’s Green Book have altered how public funds are assessed and allocated. By placing greater weight on social value, wellbeing, and local need, the system now opens the door to investment in places that have too often been overlooked. For those working at the intersection of housing and regeneration, this shift is more than a technical reform. It creates a policy environment where long-term, community-led renewal is more achievable, more defensible, and more likely to be sustained.

Regeneration is not simply about bricks and mortar. It is about restoring pride, creating opportunity, and building resilience. Ultimately, it is about ensuring that people not only have a decent home, but a meaningful stake in the place they live. That is why housing-led regeneration must be central to the national housing agenda. New homes are essential, but they are not enough. We must also invest in the homes that already shape people’s everyday lives and the neighbourhoods that define their sense of belonging. Regeneration cannot be treated as an optional extra. It is a core component of building a fairer, greener, more prosperous North.

The Northern Housing Consortium’s Renew inquiry is a key component of this. By bringing together housing providers, local leaders, developers, policymakers, and regeneration specialists, the inquiry demonstrates that collaboration is the key foundation for success. If we want to deliver regeneration that lasts, we need to work across boundaries, share knowledge openly, and build partnerships rooted in trust and shared ambition.

This is precisely why the Renew inquiry is so important. It embodies the collaborative, evidence-driven approach that this moment demands. Findings from the Renew Call for Evidence are launching tomorrow (9th June) in parliament. The inquiry received submissions from housing associations and local authorities who own or manage nearly one million homes,over 70% of the North’s social housing.  This report will help shape a deeper understanding of how regeneration can drive growth, reduce inequality, and strengthen the social fabric of Northern communities.

Housing-led regeneration is uniquely positioned to act as a bridge between policy areas and to help articulate a coherent national narrative. It demonstrates, in a tangible way, what investment in neighbourhoods looks like in practice. From the home to the high street, regeneration joins up the physical and social aspects of placemaking. It helps counter feelings of mistrust and division by showing that change is being delivered with communities, not imposed upon them. In this way, it provides a powerful exemplar of the Government’s ambition: visible, local, and rooted in everyday life.

But to deliver on this promise, the work cannot be left to central government alone. Everyone must be involved. Local authorities, housing associations, developers, investors, community organisations, and residents all have a role to play. We must create the conditions where collaboration is the norm, where barriers are reduced, and where every partner is empowered to contribute. The most successful regeneration is grounded in local insight. It listens to communities, respects their knowledge, and builds solutions that reflect their aspirations.

Parliament also has a crucial role. The Renew inquiry offers MPs a direct line to the people and organisations shaping regeneration on the ground. By visiting projects, hearing from residents, and staying close to the evidence, parliamentarians can ensure policy reflects lived experience rather than abstract models.

As we look ahead, the message is clear: this is a moment we cannot afford to waste. The frameworks are improving. The investment is growing. The partnerships are emerging. What we need now is the resolve to turn ambition into action.

Housing-led regeneration gives us a way to do just that. It provides a practical route to deliver better homes, stronger neighbourhoods, and more confident communities. It allows us to connect national objectives – growth, opportunity, and fairness – with the everyday places where people live their lives.

If we seize this moment, we can deliver something truly transformative. Not piecemeal change, but lasting renewal. Not short-term fixes, but long-term investment in the future of the North. The tools are now on the table. It is up to all of us – government, local leaders, the housing sector, and communities themselves – to use them well.

Renew is an inquiry led by the Northern Housing Consortium and supported by Homes for the North and Muse, to explore housing-led regeneration’s role in delivering growth, tackling the housing crisis, and strengthening communities across the North.  

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What should a national tenant body for England do?

It feels like it’s past time to set up a national tenant body for England. Parts of the Government have been talking with various groups about doing just that – predominantly Baroness Taylor, the Government’s Parliamentary Under-Secretary for housing in the House of Lords, but some other representatives from both houses too.

Why England needs a national tenant body

Beyond asking how to get it off the ground, we should ask what such a body should be for, and what, if anything, national and local government should be doing to drive progress. A properly resourced national tenant body would make the work of politicians, staff at departments involved in the regulation of the social housing sector, and ultimately landlords, easier.

England has been here before. The 2007 Cave Review into social housing regulation argued that tenants needed a far stronger role within the regulatory system, helping pave the way for the National Tenant Voice programme established by the last Labour government in 2009. National Tenant Voice was intended to provide an independent national platform for social tenants to influence policy and regulation, and was set up remarkably quickly once political momentum existed. But the Coalition government abolished it in 2010 before it had fully embedded itself institutionally or built a strong national profile. One lesson from this experience is that any new tenant body will need not only meaningful independence, but also deep roots in local communities and broad public legitimacy if it is to survive changes of government and become a lasting part of England’s housing system.

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In Wales, the National Independent Tenant Voice Cymru is already taking part in national policy debates with both landlords and the Senedd. The political landscape is different in Wales than in England, but there are certainly lessons to be learned from Wales about embedding  tenants’ priorities within policymaking and creating an effective national tenant voice.

Coincidentally, just after I was asked if I’d like to contribute my thoughts about a national tenant group to Red Brick, I attended a pair of workshops hosted by the National Tenant Alliance – one of the groups setting out the case for a tenant voice in England. These events explored what tenants want from a national body, how it could operate in practice, and what resources would be needed to sustain it.

Having facilitated some of the discussions at these workshops, I have heard first-hand what tenants want a national body to achieve.

Rebalancing power in social housing

One of the core essential features that keeps cropping up is the need to rebalance power between tenants, landlords and government. Much has been made of the changes introduced through the Regulation of Social Housing Act 2023, but many tenants rightly feel it has not met the promises made in the 2018 Social Housing Green Paper.

Rebalancing power means redistributing it.  Parts of the social housing sector seem resistant to the changing regulatory environment, but many tenants feel the promises of the 2018 Social Housing Green Paper still have not been fulfilled. From tenants’ perspective, expectations around professionalism, competence and respectful treatment can still feel secondary within the regulatory system. While organisational culture is difficult to legislate for, many other professions manage to uphold clear standards without resistance or lobbying.

Giving tenants a voice locally, regionally and nationally

Tenants also place a lot of value in ensuring that any national body actually operates at the regional and local level. Tenants need an ‘unmediated voice’ in national policymaking, but the issues shaping those discussions are usually rooted in communities and everyday local experience.

A tenant network could be a much better way of spreading what works and what is best practice. The current methods are landlords trying are apparently failing to get better outcomes. Lacklustre tenant satisfaction measures, unambitious Consumer Gradings and warnings from the Ombudsman that the scale of complaints is only getting wider and deeper suggest that the absence of a tenant body treated as equals is creating more work for everyone else, not least Members of Parliament who face a deluge of housing-related casework due to a lack of ambition or progress. Some recent housing policies have not only failed to resolve the many quality issues in social housing, but have been worsening the cost of living crisis for tenants for many years.

Independence, funding and legitimacy

One of the more innovative ideas about the purpose of a national tenant body I heard recently was as a starting point for mediation. Currently tenants have only two mediation routes: formal court-directed mediation once legal proceedings have begun, or ‘alternative dispute resolution’ processes aimed at resolving issues before they escalate to disrepair claims or other legal action. Such processes can still feel heavily weighted towards landlords. I found it fascinating to ponder a situation where a national tenant body could offer not just signposting to other resources, but real advocacy in these situations to rebalance power between tenants and landlords.

So, what should the Government and local authorities and landlords do to support a national tenant body? There are surely going to be a lot of different views among tenants about this, but for my part I think they should largely agree to recognise its validity and then get out of the way.

This doesn’t mean their involvement in funding solutions isn’t important. One of the more popular suggestions for funding is a small annual payment from rents, perhaps taken out of the significant sums paid per home for services from the Ombudsman and Regulator. Although this could take the form of a voluntary membership fee paid per tenancy (as in Wales) no doubt there will be some wrangling over the amounts needed to run a tenant body – and over what implications this funding could have on the independence a tenant body so desperately needs.

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