Affordable Housing Crisis Through Collaboration
London has been in the midst of an affordable housing crisis for decades.
As we entered into our Affordable Housing: Overcoming Crisis through Collaboration project in April 2022, the landscape was increasingly complex: high construction costs, a shortage of skilled workers, an urgent need to retrofit homes, and new building safety regulations.
All of this remains true today, but over the 12-month lifespan of this project, we’ve seen additional challenges added to this picture. This includes the cost-of-living crisis that is affecting many across the UK, and the fact that on top of a shortage of affordable housing many existing homes are unsafe and unhealthy.
Our work over the last year has focused on how we can better work together to tackle these challenges and this report makes the case for more, and better, cross-sector collaboration.
At our launch event in April 2022, we polled our audience and 95% of attendees thought that collaboration was critical to unlocking the affordable housing challenge.
We have identified three areas where better collaboration both within organisations and across the sector can have a big impact.
The sector has long been under pressure to deliver and is currently failing to meet its targets.
Delivering new homes remains challenging due to supply shortages, cost inflation, labor shortages, diminishing planning authority capacity, utility provision delays, and building safety considerations.
The sector must also address climate change via retrofit because homes still contribute over 27% of the UK’s total carbon emissions per year.
This backdrop has been made more complex thanks to the cost-of-living crisis which is impacting individuals and communities across the UK and has seen private rental rates increase by 4.4% between January 2022 and January 2023.
Young people aged 16–24 years are particularly vulnerable. Unable to access social housing, many are housed in the private rental sector and spend 47% of their gross income each month on rent (compared to the national average of 33%), with rents predicted to increase throughout 2023.
Within the social rented sector, rental price caps have gone some way to mitigating effects on tenants; however, all the largest housing associations in the UK had increased rents from April 2022 by the maximum amount and 25% of social renters currently find it “fairly or very difficult” to afford their rent.
Almost 30% are struggling to pay bills and debt payments and almost 50% are unable to afford necessary repairs to major electrical goods or put their heating on when needed.
The quality of affordable homes across the UK has also been brought into sharp focus over the death of two-year-old Awaab Ishak in December 2020.
A subsequent investigation revealed 217,000 social homes across the UK have been identified as having serious hazards, ranging from unsafe stairs to overcrowding and excessive cold.
A lack of quality, secure, and affordable housing exacerbates social and health inequalities and creates a pressing need for the sector to take action.
The benefits of affordable housing are clear, and modeling shows that the economic benefits outweigh the costs. But we’re not building enough new homes.
The 2021 Affordable Homes program aimed to deliver 180,000 new homes across the UK by 2029. However, compared with this aspiration, the Department for Levelling Up, Housing & Communities (DLUHC) forecasts a 23,000 shortfall.
The challenges the affordable housing sector faces are urgent. If we fail to address them, then life will get worse for many households across the UK: homelessness is already rising year on year, predicted energy price increases will disproportionately impact those on lower incomes, and failure to address climate change through retrofit will have the greatest impact on marginalized communities.
Through cross-sector dialogue, our Affordable Housing: Overcoming Crisis through Collaboration program has highlighted that to deliver the homes London – and other cities – need, the sector must work differently. We must develop approaches that better address these interrelated issues in the round.
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