Building 3.1million social homes over the next 20 years will pay for itself in money saved on housing benefit, a leading charity has said.
Speaking at a Conservative think thank conference in central London on Monday (July 8), Polly Neate, chief executive of housing charity Shelter, outlined a “water-tight” economic case for building more social homes to end the UK’s housing “crisis”.
The charity estimates that 20-year investment in building 3.1million social homes would pay for itself in housing benefit savings within 30 years.
Ms Neate comments were made on the same day that London Councils released data suggesting that the government’s refusal to raise the Local Housing Allowance (LHA) is “fuelling homelessness”.
Addressing the conference, Ms Neate said: “At the moment housing benefit is frozen. Which means that now, in over 90 per cent of the country, housing benefit does not enable you to afford the cheapest rent.
“You can’t actually not have some sympathy for the government motivation in freezing housing benefit. The reason for that is that housing benefit just goes up as rents goes up.
“So it is a commitment to a benefit that has no ceiling and that money is being poured straight into the pockets of private landlords. It makes absolutely no sense.”
Benefit Freeze Is ‘Fuelling Homelessness’
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In the capital, almost half (45 per cent) of 200,000 low-income families’ rent is not covered by their LHA, according to London councils.
In some areas of the capital, such as outer south west London, not a single property is affordable for single claimants looking for a room in a shared house.
Housing benefit has not risen in line with private rent since 2010. The current freeze means the benefit will remain frozen at 2016 levels until 2020, regardless of how much private rents have gone up by in each local area.
Building More Social Homes
Ms Neate told the audience that the only “moral” way to cap the housing benefit bill is to build more social housing.
She said: “You have to build housing that people on housing benefit will be able to afford.
“Otherwise housing benefit is going to be a bottomless pit into which you are pouring taxpayer’s money.”
“It is the only way, economically, to end the housing crisis.
“You cannot build 300,000 homes-a-year, with a market for them, unless they are social homes.”
It takes longer to make profit from social housing and so it is a job better suited to a the state rather than private landlords, she added.
More than 300,000 people are currently homeless and living in unsuitable temporary accommodation such as hostels or B&Bs, Ms Neate highlighted.
Social housing also presents a way for the country to “heal” its political divisions, she said, with 75 per cent of voters who backed both Leave and Remain supporting building more social homes.