22025_The Future of UK Housing Supply_v2

A FOCUS ON AFFORDABLE HOMES IS NEEDED

A lack of local authority delivery, Right to Buy and other government policies have led to a dramatic decline in the number of affordable homes. Forty years ago, 32% of households lived in social rented homes; this now stands at 17% (English Housing Survey). Over one million people are on a waiting list for social housing and over 40% of private renters are using housing benefits to top up their income to cover housing costs (L&G, BPF). THIS NOW STANDS AT 17% 32% OF HOUSEHOLDS LIVED IN SOCIAL RENTED HOMES FORTY YEARS AGO

Successive governments have shown little appetite for refreshing the state’s previous key role in the construction of affordable housing. However, there is an opportunity for institutional investors to step in and fill this void. Institutional investment in affordable housing has increased over the past few years and we expect this to grow exponentially. The number of for-profit registered providers has grown from 30 in 2016 to 68 in 2022 (Regulator of Social Housing). Money is attracted to the affordable housing sector as it has provided stable returns over long periods of time and can help clients invest with a social conscience. There will be hurdles to jump—the social housing review, changing definitions of affordability, lengthy for-profit provider application processes, not for profit competition, and so on—but they are challenges that need to be overcome.

PROPORTION OF EXISTING DWELLINGS BY EPC BAND

20 30 40 50 60 70 80

0 10

‘80 ‘82 ‘84 ‘86 ‘88 ‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘09- ‘10 ‘11- ‘12 ‘13- ‘14 ‘15- ‘16 ‘17- ‘18 2019 2020

PRIVATE ENTERPRISE

HOUSING ASSOCIATIONS

LOCAL AUTHORITIES

Source: English Housing Survey

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