The report, titled “Making Social Rent Homes Viable”, was published under the banner of “Homes for People We Need”, highlighting the essential need for more social housing in the UK.

This has come off the back of the Government committing £39bn over 10 years to be invested towards affordable housing, an initiative that is warmly welcomed by the industry, but will come with difficulties that need to be recognised.

The main challenge of social housing is that the capital value is significantly less than the development costs, stemming from the low rental income generated over the unit lifetime. To make meaningful inroads into the estimated 90,000 social homes needed per year, significant subsidies would need to be provided by the government to begin to bridge this gap and enable the delivery at the scale that is needed.

The report suggests that to meet the target, an additional yearly subsidy of £18.83bn would need to be provided by the government. The report suggest that this can be done through corporation tax credits, similar to how affordable housing is funded in the US.

The credits work by allowing any profitable company, not just those in the housing sector, to pay 10 years of corporation tax to HMRC early and get a discount, providing the Government with the upfront capital needed for these subsidies.

Whilst this does not come without its challenges, the use of these tax credits would enable the Government to take a step in the right direction to meet its social housing ambitions.

Please see the below link to the full report for more information.

Download the report – Homes For People We Need

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