Chloe Smith
MP for Norwich North

A New Generation of Council Houses

Author: Chloe Smith, Updated: 06 October 2017 15:56

This week at conference, the Prime Minister announced ‘a new generation of council houses to help fix our broken housing market’ by increasing the government’s affordable housing budget by £2 billion to more than £9 billion – and allowing homes to be built for social rent.

The Government are supporting councils and housing associations to build more homes at rents that are affordable for local people. The Government are helping build new homes where costs are particularly high and families are struggling with the costs of rent.

That’s this Government will provide £2 billion more funding for the affordable housing programme. To help encourage more investment in social housing, we will create a stable financial environment by setting a long-term rent deal for councils and housing associations. This will give them the security and certainty to invest and build more.

We will provide £2 billion of public funding to deliver more affordable homes at social rent. This will increase the Government’s 2016-21 affordable homes programme to £9.1 billion. This extra £2 billion will lever in a total investment of £5 billion (public and private) in new housing. With a typical subsidy of £80,000, £2 billion investment can supply around 25,000 homes available for social rent. This compares with an additional 6,800 social rent homes delivered in 2015-16.

We will provide stable investment environment for councils and housing associations to support the delivery of new homes by giving certainty over future social rents.  We are setting out a long-term rent deal for social landlords, where increases will be limited to CPI + 1 per cent for 5 years from 2020. The Government will be looking to the sector to show that it can make the best possible use of its resources and make a very substantial contribution to building the homes this country desperately needs. 

Alongside this, the Government is providing certainty on the level of future rent levels from 2020. By giving long-term certainty of CPI inflation + 1 per cent, this will make it easier for housing associations to borrow money to support new social house building. The CPI + 1 per cent cap also provides certainty for tenants, and prevents excessive rises. The combination of the two policies will help provide more new affordable homes.