10-Year Social Housing Rent Policy Could Unlock Additional £20bn Investment and Deliver 240,000 Affordable…

The British Property Federation has told the Ministry of Housing, Communities and Local Government that a ten-year social housing rent settlement could unlock an extra £20bn of private capital and deliver 240,000 social homes over five years.

In its response to the Future Social Housing Rent Policy consultation, which closed on 23 December, the BPF argues that the proposed five-year settlement is not long enough to support the Government's ambition for much more social housing within its 1.5 million homes target. It notes that social housing starts currently run at 43,400 a year against a need for 145,000, while 1.29 million households are on waiting lists.

The BPF is calling for a ten-year settlement with rents rising at the Government's proposed rate of CPI plus 1%. It says this would give investors more stable income, support the valuation of existing social homes and make Government subsidy go further. It also backs rent convergence, allowing lower rents to rise faster so that similar homes carry similar rents.

The federation's own analysis suggests at least £20bn of private capital is ready to invest in UK social housing if policy is supportive. Assuming 50% debt funding and an average cost of £250,000 per home, this could deliver 240,000 additional units over five years.

Policy Director Ian Fletcher welcomed the Government's extra grant funding but said rent policy sends an important signal to investors. He argued that rolling ten-year settlements would attract private money and raise housing associations' capacity to invest, whereas a five-year deal would leave delivery constrained as providers also deal with older stock and building safety costs. He added that more social housing would reduce the number of people pushed into the private rented sector, where costs to tenants and Government are higher.

Source: British Property Federation, original article (22 January 2025)