Future of Cities - Future of UK Housing Supply 2022

A FOCUS ON AFFORDABLE HOMES IS NEEDED

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). 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, with the number of for-profit registered providers increasing from 29 in 2016 to 69 in 2022 (Regulator of Social Housing), and we expect this to grow.

Industry consensus is that 145,000 affordable homes are required to be

OF HOUSEHOLDS LIVED IN SOCIAL RENTED HOMES THIS NOW STANDS AT 17% 32% delivered each year. Research by the BPF and Legal & General calculated that increasing the delivery of affordable homes from the current supply of 52,000 per annum to the 145,000 target would require an additional £14.2 billion of subsidy per annum. Subsidy will help attract investors, but there are other (stronger) reasons for institutional interest. As well as creating social impact, investors have been attracted to the sector due to its long-run record of delivering stable returns, and limited voids. FORTY YEARS AGO

14 The Future of UK Housing Supply |