Headlines: January 26th, 2009

Despite the continued expansion of the housing market in 2006 to 2008 the demand for social housing grew by 100,000 households in the year ended April 2008. There are now almost 1.8million households, or 4.5million people, on social housing waiting lists. The recession will drive demand for more social housing and the Local Government Association is concerned about the impact on local councils.

Because the social housing provision was unable to match demand in favourable economic conditions there are growing fears that the situation will deteriorate rapidly during 2009 as mortgage lenders are unable or unwilling to provide finance. The result is likely to be that many thousands more people will be looking to councils to provide them with a permanent home as they either find it impossible to get on the housing ladder, unable to afford private rented housing or see their home repossessed.

The Government target is to build three million homes by 2020, but the National Housing Federation believes it cannot be achieved before 2029. It was announced last week that barriers that deter councils from building new houses will be removed. Councils will be able to retain rental income and capital receipts from any council home sold under the Right to Buy. Rent retention could mean an additional 450 million pounds per year for councils to invest in better homes for their residents and retaining capital receipts could provide an extra 1.5 billion pounds that could fund new affordable homes.

The Local Government Association has called for flexibility in central government housing grants that will allow councils to keep home building going during the economic downturn. This will help tackle rising housing waiting lists and make sure the skills are still there to provide the homes needed when the market recovers.