Just 5 per cent of new homes to be built with government money will be most affordable type, ministers admit

Just 5 per cent of homes to be built with government money will be the most affordable type of housing despite the prime minister’s pledge to build a “new generation of social homes“, ministers have admitted.

The government said only 12,500 of the 250,000 homes to be built with the affordable homes budget by 2022 will be social homes – equivalent to 2,500 per year.

The other 237,500 are likely to be more costly “affordable homes”, which can be sold for hundreds of thousands of pounds or rented out at up to 80 per cent of full market value.

The admission comes despite Theresa May having promised to deliver “a new generation of social rented homes” amid soaring demand for low-cost housing.

It prompted criticism from housing charities, who said the lack of new social housing was “totally unacceptable”. Labour said the “tiny fraction” of social homes being built was “just not good enough”.

There were 1,409 social homes built in England last year. With ministers now promising a total of around 2,500 per year until 2022, it means the increased funding will deliver only an additional 1,000 each year.

In contrast, 39,402 were built in 2009-10 – the year before the Conservatives came to power.

In October, Ms May announced that her government was increasing funding for the Affordable Homes Programme by £2bn, taking the total to almost £9bn.

Heralding the move, the prime minister said she was making it her personal “mission” to tackle the housing crisis and assured those in need of a better home that “help is on the way”.

But in answer to a parliamentary question from Labour, housing secretary James Brokenshire said just one in 20 of the new homes to be built will be social homes.

He said: “The £9bn Affordable Homes Programme will deliver at least 250,000 homes by March 2022. At least 12,500 of these will be for social rent outside of London.

“The Greater London Authority has the flexibility to deliver social rent in London.”

Commenting on the revelation, John Healey, Labour’s shadow housing secretary, said: “There’s been a disastrous fall in the number of new genuinely affordable homes for social rent under the Conservatives. We are now building over 30,000 fewer social rented homes a year than when I was Labour’s last housing minister in 2010.

“Ministers’ flawed definition of ‘affordable housing’ includes homes for sale at up to £450,000 and to let at 80 per cent of market rents, so it’s just not good enough for ministers to only commit a tiny fraction of the affordable homes budget to new social rented homes. The next Labour government will build a million low-cost homes, the majority for social rent.”

Addressing the Conservative Party conference in October, Ms May promised “a new generation of council houses to help fix our broken housing market”.

She said: “In those parts of the country where need is greatest we will allow social rented housing to be built, at well below market levels, getting the government back into the business of building houses.”

And during the 2017 election campaign, Ms May promised the Tories would deliver “a new generation of social rented homes”.

Housing charities condemned the revelation that the government will only fund 2,500 new social homes per year.

Greg Beales, campaign director of Shelter, said: “The gap between the number of social homes we need in this country and how many get built is vast. In fact, we delivered 84 per cent fewer social homes this year than in 2010. This is totally unacceptable when hundreds of thousands of people are homeless and millions more are struggling in unstable and expensive private renting.

“It is time the government charted a new course and seriously ramped up its efforts to get more social homes built. That’s why Shelter has launched an independent commission into the future of social housing that will soon set out a bold and far-reaching vision for the pivotal role it has to play in ending the housing crisis.”

And Jon Sparkes, chief executive of homelessness charity Crisis, said: “It is very disappointing to see such a tiny proportion of the properties to be delivered through the Affordable Homes Programme being made available for social rent. Research shows we need 90,000 social homes built every year for the next 15 years to meet demand – both for those experiencing homelessness, and for those on low incomes, many of whom are at risk of homelessness.

“The current lack of genuinely affordable housing is leaving thousands living on a knife-edge, unable to keep up with spiralling rents and housing costs.”

Kit Malthouse, housing minister, said: “Over the last three decades governments of all stripes have built too few homes of all types, including for affordable and social rent.

“We’re correcting this with massive investment in house building, including the £9bn affordable homes programme, but also by setting councils free to build the social homes their communities need.

“We expect many thousands of new homes to result and we share the impatience of the British people to see decent homes built for the next generation.”