William Eichler 19 January 2017

Government has ‘huge mountain to climb’ to tackle housing crisis

Housebuilding has not kept pace with need, auditors say as they warn the number of households formed each year exceeds the annual number of houses being built.

Projections from the National Audit Office (NAO) have shown there will be at least 227,000 new households formed each year between 2011 and 2021 - a ‘substantially higher’ figure than the annual average of 166,000 extra homes in England over the last 10 years. The NAO calculated there needs to be 174,000 annual net additions to the country’s housing stock in order for the Government to reach their target of one million new homes by 2020.

The auditors warned this could be difficult because the department for communities and local government’s housing strategy relies heavily of the market which may be adversely affected by Brexit.

The NAO also revealed the total estimated Government spending on housing in England was approximately £28bn in 2015-16. £20.9bn of this was on housing benefits.

Social housing rents have been increasing faster than earnings since 2001-2, the auditors found. And homelessness has risen from around 48,000 in 2010-11 to 71,500 last March.

Turning to rent, the NAO warned the Government announcement in July 2015 of a reduction in the rents housing associations and local authorities could charge of 1% per year, reduced the ability of housing associations to finance the construction of new housing.

Commenting on the NAO report, Liberal Democrat shadow housing minister Lord Shipley said: ‘These figures show there is a huge mountain to climb to tackle the housing crisis.

He added: ‘Ministers promised to produce a Housing White Paper before Christmas, yet we are still waiting for the details.’

John Healey, Labour’s shadow housing secretary, also accused the Government of 'moving the goalposts to try to make up for their mistakes'.

'The report confirms that housebuilding is falling well short of demand and that the cost to the public purse of is ballooning, with the temporary accommodation budget growing to cope with rising homelessness.'

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