Blueprint for Truly Affordable Homes Could Slash 1.2 Million Council Waiting Lists

  • New generation of Public Rental Homes (PRH) needed to match the needs and pockets of 1.2 million households on waiting lists.
  • New Public/Private partnership model for half-market rent homes designed for local needs, built by private developers.
  • Site-by-site appraisals rather than top-down planning targets form the bedrock of local PRH programmes.

The Housing Finance Institute (HFI) and Localis published a 30-page blueprint designed to stimulate a new generation of council homes.

‘Public Rental Homes – fresh perspectives’ provides a solution to the challenge that just 6,000 of the 52,000 new homes listed as ‘affordable’ in 2020/21 by local councils were truly affordable by 1.2 million households on waiting lists.

Local authorities would have the opportunity to develop plans to slash council waiting lists and galvanise local housebuilding by partnering with private developers to build homes by adopting this new-generation PRH model, that flips the traditional approach to negotiations on ‘affordable’ provision.

Currently councils negotiate with developers to determine the percentage of affordable homes a scheme can provide, based on the total private unit sales. ‘Affordable’ rents can vary from 50% of local market rents up to 90%.

Subsidised sales are included in the percentages. The PRH model flips the question to ‘what percentage of private homes are needed to produce sufficient PRH homes?

Under the PRH model – which deals in ‘bottom up’ plans, not top-down targets – local authorities would be responsible for identifying sites that might meet PRH criteria and initiate a discussion with developers.

For their part, developers would assume 100% of the risk and a 20% margin on both the PRH homes as well as their own private units.

Report author, Peter Bill, said: “Families on council waiting lists are squeezed to the bottom of pile by financial pressures on councils and developers trying to agree on the percentage of affordable homes. A new perspective is needed to ensure the needs of these families become the top priority on sites where PRH is viable.

“The PRH approach addresses that need and provides fresh impetus to councils looking to house those on their waiting list and to developers looking for better, simpler, ways to build.  Site-by-site viability is the key. Developers take 100% of the risk and therefore deserve a 20% profit margin.”

Co-author, Jackie Sadek, said: “We need to get on and deliver. Stop arguing about the whys and the wherefores. Delivery only happens on the ground, not from Whitehall.

Let’s try to crack this massive crisis, not top down, but bottom up. Every council should be supported in drawing up a 10-year Plan to deliver Public Rental Homes.”

Chair of The Housing and Finance Institute Board, Sir Steve Bullock, said: “Thousands of families and individuals, both young and old, are caught in the trap of being unable to afford to buy or rent privately but finding no alternative that they can possibly afford either.

More people are falling into this trap each month yet the supply of new affordable homes is actually diminishing.

“The impact of the cost-of-living crisis makes finding a response ever more urgent and the HFI has commissioned this research to offer a way forward that can attract support on a cross-party basis.

“Putting the emphasis on building new social homes has the potential to be a win–win with homeless people having a better chance of moving to decent properties that they can afford and make into homes while the economic impact of the construction will have wider benefits.

“Doing this at pace will need a different mindset at all levels of government and the HFI will press for that and work with councils, government and developers in the coming weeks to make this happen.”

See more about affordable homes on Skill Builder

About Dylan Garton

Dylan Garton is a co-founder, video producer and editor for the Skill Builder social media platforms.

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