Millions of families are struggling with high housing costs.
The Government is spending four times as much – some £32bn – subsidising private housing as it is building affordable homes for low-income families, a report has revealed.
The study showed 79 per cent of the total housing budget is currently spent on higher-cost homes for sale, including through the controversial Help to Buy scheme, but just 21 per cent, around £8bn, goes to affordable homes for rent.
In 2010-11 the Government contributed £2.5bn to the Affordable Homes Programme but by 2015/16 that had fallen to just £285m.
In total, the amount of public money going to help housing associations build new homes has dropped from £3.8bn in 2010-11 to £1.3bn last year.
The most recent data showed that Conservative ministers have completely stopped funding new social housing, which is 30-40 per cent cheaper than affordable housing.
The Chartered Institute of Housing (CIH) report reveals that the number of affordable homes being built with Government money has fallen by 50 per cent since 2010, from 56,000 to 28,000.
Instead, money has been diverted to help middle- and high-income households get on the housing ladder. For example, around £5bn of loans have been given to buyers via the Help to Buy Scheme established by George Osborne in 2013.
CIH chief executive, Terrie Alafat, said: “People on lower incomes are finding it increasingly difficult to make ends meet as they experience the impact of stagnant wages, rising inflation and welfare reform cuts. These factors and the shift towards ‘affordable rent’ all mean that housing is becoming increasingly unaffordable in many parts of the country. We know we need to build more homes to get to grips with our national housing crisis – our UK Housing Review briefing highlights that annual supply remains at least 30,000 homes short of household growth. But it’s not just about building more homes; it’s about building more affordable homes for people on lower incomes. The Government needs to take an urgent look at rebalancing the housing budget and investing more in genuinely affordable homes for rent."
Critics say that, because affordable homes can cost up to 80 per cent of market value, they are not affordable for millions of people on low incomes. Conservative ministers have prioritised building affordable homes over social homes. As a result, since 2010 the number of new social homes has plummeted by 97 per cent, from almost 37,000 in 2010 to just over 1,100 last year. The Conservative definition of ‘affordable housing’ now includes homes close to full market rent and those on sale for up to £450,000.