In its latest study into the UK’s ‘broken’ housing system, charity Shelter announced the worrying news that despite huge demand, only 6,644 social rent homes were delivered in 2019-20 – a decrease of more than 83% since 2010.
Currently, the level of housing need stands at around 90,000 affordable homes a year, although only 52,000 were delivered in 2020-21. In addition, Shelter has identified about 1.1 million households waiting for such housing, and the shortfall between supply and demand is only increasing.
There is no doubt, then, that increasing the supply of social housing is a critical need for the country. Yet, the British Property Federation estimates that in order to meet this demand, an additional £34bn in capital is required.
This is where for-profit housing organisations can help. Their emergence has raised some eyebrows, but the cost of housing they offer to the tenant or owner is no more than that provided by non-profit housing associations, and their addition to the sector can only help in the supply of new affordable homes for rent and sale.
With the right finance, they are able to scale up quickly, relieving pressure on the not-for-profit sector while still facing the same rigorous scrutiny from the Social Housing Regulation watchdog. They can add huge value to a sector that is crying out for investment.
At Together, we understand the critical need for more investment in this area, and so are keen to support experienced developers working in the sector. The issues around social housing cannot be ignored. It is now time for developers to look towards affordable housing if we are to combat this national crisis.
We will do our bit, too, offering nearly 50 years of experience in the specialist property market to support and encourage investors.
Alex Bodie is head of social housing at specialist lender Together