A £1.4 billion pound boost

The project was commissioned because the daily experience of Shelter’s housing aid centres and projects told us that throughout the country, shortages of the right kind of affordable housing cause distress and misery. The research confirms that the need for more homes is substantial.

The Shelter housing investment project (SHIP) analysis has moved on from those of the 1990s.

Around 70 per cent of the new affordable homes need to be in the south of England. The figures are also influenced by the growing polarisation between rich and poor, and the large numbers of people now in low paid jobs. There is also a significant need for investment in existing homes. But over 100,000 new affordable homes a year must be provided in England over the next 10 to 15 years to tackle the backlog of housing need and provide for people setting up home who will not be able to afford their housing costs.

SHIP estimates the annual cost of meeting all need identified in the research as £12 billion a year over the next decade. This includes £5 billion each year to repair and renovate existing homes (including the housing contribution to regeneration spending) and £7 billion a year to provide enough extra affordable homes.

But this £12 billion can be found in various ways – from private finance, particularly from money levered in via stock transfer, subsidy provided by developers and landowners in planning deals, individuals’ spending on shared ownership costs, or owners’ matching contributions to renovation grants.

The project also concludes that meeting housing need should not fall solely on the social rented sector. Better regulation of private landlords could make the private rented sector suitable for more people on low incomes who are in housing need. Introducing a mortgage benefit scheme would also allow home owners on low incomes to stay in their homes when they hit difficulty. If public spending on housing investment in England was increased by £1.4 billion above planned spending in 2001/02 (the last year of the 1998 comprehensive spending review), then the £12 billion could be generated.

The programme is contingent on maximising planning gain, making the most effective use of private finance, and pursuing stock transfer where this makes economic sense, meets need and fits in with local priorities. But increased public spending is necessary to underpin these contributions. Although exploiting all these sources is vital, on their own they can only provide a fraction of what is needed overall.

Shelter commissioned the research against the backdrop of the last election. But since then, new policy debates have emerged – unpopular housing, local housing market divergence, the social exclusion agenda and alarm about the impact of building in rural areas. SHIP takes all this into account and concludes that neither the issue of low demand, or concern about the greenbelt, should be allowed to stop housing being provided where it is needed. The alternative is a growing number of people experiencing homelessness, poverty and social exclusion.

Arguing for increased public spending is an unfashionable mission. Shelter’s experience and this research, clearly demonstrate that these arguments must be made. Ultimately, all housing investment must be paid directly by the consumer, through rents or mortgage payments, or from subsidy, either directly from the public purse or from other bodies or individuals.

There is no new pot of gold. Housing providers will continue to find solutions to freeing up money by juggling ownership and different finance sources. But these are all ultimately only going to provide marginal solutions. The only lasting answer is to increase investment. A ten-year programme could do much to resolve the backlog of need, reducing the requirement of future investment to the extent of future needs.

This year is crucial for future housing policy. The new green paper and the spending review 2000 will set the context for policy for the next decade. This is the government’s opportunity to get housing investment and revitalise housing and regeneration policy.

Nicola Backon is head of policy at Shelter