Homelessness and Housing Policy

publication date: Jan 26, 2017
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

What does the NAO report say about homelessness and housing policy

Everyone reading this probably has somewhere they can call home but homelessness is still a big issue and is tackled in the report:

Homelessness has increased in recent years but not to peak levels
As of the end of March last year, around 70,000 homeless households were being sheltered in temporary accommodation in England, up more than 30,000 from 2010-11. However, this is still below the 2004-05 peak of 101,000 households. Gross expenditure on temporary accommodation has risen by 46% since 2010-11.

Housing policy

Could government housing policies have conflicting objectives? More than a few public bodies have some responsibility when it comes to housing, sometimes using it as a way of meeting other ends. Alterations made in one policy area can impact on others, leading to conflicting aims. As the report notes: “in July 2015, the government announced a reduction in the rents housing associations and local authorities could charge of 1% per year. This reduced the ability of housing associations to finance the construction of new housing.”

The DLCG’s housing objectives
The final part of the report takes a look at the current objectives of the DLCG.

Increasing supply and home ownership
During the current Parliament the DCLG plans “to tackle the inability of housing supply to keep pace with need, and the lack of affordability of owner-occupation.” Housing supply will be boosted by the DCLG’s commitment to providing one million new homes in England by the end of the decade. There are also plans to publish a white paper to lay out reforms to increase supply and stop the decline in affordability.

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Programmes to support delivery of the DCLG’s ambition

  • Affordable Homes Programme
  • Help to Buy equity loans
  • Home Building Fund
  • Accelerated Construction
  • Housing Infrastructure Fund

The million homes objective does not need a major change in the number of homes delivered per year
The DCLG measures new homes as net additions – this includes converted properties as well as new builds. To meet the objective of a million new homes by 2020, we require 174,000 net additions each year. This is more than the number of homes built straight after the 2008 recession and the ability to do this is subject to general economic factors. However, in 2015-16, around 190,000 homes were added, more than would be needed ongoing to meet the target.

Impact of Brexit vote on DCLG objectives not yet clear
The market plays a big role in the ability of the DCLG to meet its objectives. Before the result of the EU referendum, there were signs that the housing market was slowing. Clearly, if the rate of housebuilding reduces it will be harder to deliver a million homes and increase home ownership. Straight after the result the signs pointed to a marked slowdown but more recently it appears that there have been slight increases in the volume of sales being agreed. However, the long-term impact of the vote is, as yet, unclear.

What do the NAO conclude?

  • Demand has grown too quickly for supply to keep up in recent years;
  • To keep up with demand, we need to build houses across England;
  • Affordability has improved for existing home owners;
  • Social rents have risen at a higher rate than earnings;
  • Affordability has worsened for first-time buyers;
  • Homelessness has increased;
  • Housing is major priority for the government;
  • A range of policies have been put in place to increase supply and ownership, mostly by supporting private builders;
  • The flagship housing policy is the promise to build one million homes by 2020.

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