Budget impacts for social housing providers
In the wake of the Autumn Budget, Shazia Bashir, Jaspreet Dhillon and Rebecca Thibault discuss the challenges and opportunities facing Registered Providers (RPs) in London, particularly concerning the pressing need for social housing in the UK.
The array of initiatives announced in the Autumn Budget have made the government’s ambitions clear: it will support housing and “Get Britain Building”. Amongst the initiatives, the Chancellor Rachel Reeves has confirmed a £500m top-up for the 2021-26 Affordable Homes Programme to build up to 5,000 new affordable homes. Of this £100m will be allocated to the Mayor of London, marking a turning point for the development of affordable housing in the capital.
Rent settlement
The government’s plans for a new five-year rent settlement of CPI+1% should provide social housing providers with long-term certainty to enable investment into new social homes. Whilst this will be welcome news for RPs, making this affordable for low-income renters should be coupled with a corresponding increase in Local Housing Allowance (LHA). LHA is to be locked at the current levels until 2026, making most properties on the private rental market challenging to afford for low-income renters in some parts of the country such as London.
Regeneration
Despite playing a central part in the social housing sector, regeneration felt overlooked in the budget. It has been widely reported that cities overflowing into surrounding areas is no longer a smart solution to the housing crisis. Instead, regenerating older building and estates has been identified as a more sustainable and efficient way of increasing the UK’s affordable housing stock. Indeed, many London councils are already using regeneration as a means of improving housing and increasing the number of homes available for sale. Regeneration is a win-win whereby residents will get a more modern and energy efficient home, and pressures on council waiting lists will be reduced thanks to the delivery of more homes.
Workforce shortages
The Autumn Budget has highlighted critical measures required to maintain economic stability, whilst also promoting growth across the housing sector. The government is proactively responding to the demand for housing and infrastructure but recognises the shortage of construction workers impacting successful project delivery. Addressing this issue is crucial for meeting housing targets. It is promising to see the 2024 budget focus on bolstering the UK’s skilled workforce to support growth, with investment focussed on upskilling and creating new training opportunities. The long-term strategy aims to build a consistent and more sustainable stream of construction workers, including support for construction apprenticeships, funding for skills academies, and other financial incentives for businesses to provide on-the-job training in specialised construction fields. This support will be pivotal, allowing the government to meet the increased demand created by the Build to Rent market, and surge of capital investment.
Planning officers
The government’s pledge of £46 million in additional funding aims to support the recruitment and training of 300 graduates and apprentices within local planning authorities.
This initiative highlights a pressing concern: with only 16 universities in England and Wales offering planning qualifications, a career in planning does not seem to be either (a) widely publicised; or (b) perceived attractive to young people. This perception may be influenced by the often-negative press surrounding Local Planning Authorities.
It is not clear how the government intends to attract graduates into the public sector, especially considering that salaries in the private sector tend to be far more competitive. The other issue will be retaining those graduates and apprentices in the public sector. Reports show that the number of planning officers in the public sector reduced by one quarter between 2013 and 2023, with the number in the private sector increasing by 80%. Addressing the capacity challenges faced by many planning teams is crucial to the government’s goal to deliver the additional 5,000 affordable homes.
Conclusion
Measures announced in the budget have been welcomed by the housing sector and mark the first steps in unlocking the door to the development of more affordable housing. As ever, the devil will be in the detail regarding how the government will address LHA and estate regeneration. The spring spending review in 2025 will be critical in addressing these next steps.
Shazia Bashir is a partner, Jaspreet Dhillon is a senior associate and Rebecca Thibault is a senior associate (paralegal) in TLT’s housing and regeneration team at TLT. Shazia can be contacted on 0333 006 0748 or by email This email address is being protected from spambots. You need JavaScript enabled to view it.
