By james art Rachel Reeves will announce plans for a consultation on a new five-year social housing tenancy agreement and a reduction in Right to Buy, which allows tenants renting local authority-owned homes to buy them at a reduced price to protect existing council stock and to retain council housing in the sector.
The moves are part of a housing package which includes £500m of new funding for up to 5,000 new affordable social homes and £128m to support the provision of 33,000 new homes through projects across the country.
Ms Reeves said: “We need to solve the housing crisis in this country. It has created a generation locked out of the property market, torn communities apart and put the brakes on economic growth.
“We are rebuilding Britain by boosting housing and delivering the 1.5 million new homes we so desperately need.”
The Government will seek to cap what social housing providers can charge tenants in line with consumer price index inflation plus 1%, launching a consultation on a five-year social housing tenancy agreement.
The consultation will also seek views on other options, such as providing a 10-year agreement.
The Government is also planning greater protection for newly built social housing and to allow councils to keep 100% of the money raised from Right to Buy sales so they can build and buy more social housing.
A housing strategy will be drawn up in the spring and details of the new investment to replace the affordable housing program for 2021-26 will be set out in the next spending review.
The addition of £500m in funding for the Affordable Homes Program brings total investment in housing supply to more than £5bn, the Treasury said.
£128m confirms funding for the following projects:
– £56m investment in Liverpool Central Docks to build 2,000 homes
– £25 million to set up a new fund with Muse Places Limited and the Pension Insurance Corporation to deliver 3,000 energy efficient homes, with the aim of being 100% affordable
– £47 million for local authorities to tackle river pollution which is preventing house building. This could support the delivery of around 28,000 homes.
Deputy Prime Minister Angela Rayner said: “We have inherited a housing system that is broken, with not enough homes being built and even fewer that families can afford.
“This is a further important step in our plan to get Britain building again, supporting the sector so they can help us deliver a boom in social and affordable housing, supporting millions of people up and down the country in safe, affordable and a decent home they can be proud of.
Kate Henderson, chief executive of the National Housing Federation, said the £500m top-up to the Affordable Homes program was a “vital financial injection” that would support housing associations and prevent a “collapse in delivery”.
She said the federation supported a review of Right to Buy concessions and the rent settlement consultation, which would “provide both transparency for residents and long-term security and financial stability for social housing providers”.
“To achieve the affordable housing needed across the country, alongside this short-term top-up, we look forward to a new long-term housing strategy announced in the next spending review, including a significant increase in funding for social housing.”
The Local Government Association said councils are ready to work with the Government to increase affordable housing and help those on council housing waiting lists.
LGA chairman Louise Gittins said: “It is becoming increasingly impossible for councils to replace homes as quickly as they are being sold through the Right to Buy (RTB) scheme.
“The LGA has long called for RTB reform and these positive measures will support the replacement of sold homes and stop the continued loss of existing stock.
“The five-year rent settlement is a step in the right direction to provide certainty for councils on rental income, but to really strengthen and provide stability to housing revenue accounts, a minimum 10-year rent settlement is needed, along with the recovery of the revenue lost due to the rent cap and revision of the 2012 Self-Funding Agreement.
“This would better support long-term business planning to ensure that councils can provide high-quality homes and related support for their tenants.
Polly Neath, chief executive of housing charity Shelter, said: “This increase in funding is a welcome step towards tackling the housing emergency. In order to tackle rising homelessness, the majority of this funding should go towards social rents.
“For decades we have lost more social homes than we have built, causing private rents to soar to record levels and homelessness bills to reach billions. Families across the country have paid the price with more than 151,000 homeless children often living out of suitcases in dingy one-bed dormitories and spending sleepless nights worried about whether they will ever find a safe home.
“If the Government is to meet its target of building 1.5 million homes, it must now use the Spring Spending Review to deliver 90,000 social homes a year over 10 years. Not only will they pay for themselves through new jobs and savings to the NHS and the benefits bill, they will finally end homelessness for good.