The 20,000 target for affordable homes is no longer enough to meet housing need, says Cerys Clark.
For the past three months the Senedd’s Local Government and Housing Committee has been holding an inquiry into the supply of social housing in Wales. This inquiry has been wide ranging from the progress being made to meet the 20,000 new low carbon affordable homes target to the barriers and enablers for development in Wales.
Yet one question that has not been considered is whether the 20,000 new low carbon affordable homes target is the right target we should be working towards. CIH Cymru has raised this very question in its submission to the inquiry and asked whether recent socio-economic events mean that housing need is far greater now than it was when the 20,000 figure was arrived at.
When the target was set it was done on the basis of housing need in 2019. The housing need figure is calculated using data on homelessness, numbers in temporary accommodation, those on social housing waiting lists and newly emerging households. This number is split between those needing an affordable home, which includes social housing, low-cost home ownership and intermediate rent, and those able to access market housing. This calculation in 2019 outlined that we should be building between 3,049 and 3,878 new affordable homes per annum. So, the 20,000 target over five years would exceed this.
HIGHER LEVELS OF HOMELESSNESS
However, we now have significantly higher levels of homelessness with latest the data showing a 7 per cent increase in the numbers of households becoming homeless between 2021/22 and 2022/23 coupled with a 23 per cent increase in the number of households in temporary accommodation. We also have rising unaffordability in the private rented sector and increasing levels of unaffordability in market housing
According to Zoopla, the cost of a newly available private rent property has increased by 9.4 per cent in the 12 months prior to January 2024. The average rent for a newly available home in Wales is now £881 a month. This is being impacted by the lack of supply in the private rent market. Currently the flow of new supply is down 6 per cent with demand up 32 per cent. This reducing supply is resulting in increasing prices.
Mortgages are also becoming more and more unaffordable for first time buyers further increasing demand for private rented accommodation which is likely to continue to result in higher rental costs.
SUPPLY ISSUES
As the supply of affordable homes reduces, demand for social homes increases with the latest data showing that 139,000 people are currently waiting for a social home in Wales. By providing the 20,000 new low carbon homes we can reduce this by around 14 per cent but it is unlikely to solve the supply issues and as such the total figure of new low carbon social homes needs to be recalculated.
Yet whilst focussing on the numbers needed to ensure we are building enough homes, we cannot ignore the very real impact this lack of supply is having on individuals throughout the housing system. This impact is not just about the rising levels of homelessness, it is also about the lack of flow from inappropriate temporary accommodation, like B&B’s, to supported accommodation, to then being able to access a permanent home. Welsh Government’s rapid rehousing programme aims to ensure someone can access a settled home in as short a time frame as possible as part of making homelessness in Wales rare, brief and unrepeated. Yet the recent evaluation into rapid rehousing outlines the real consequences of lack of supply on the programme.
For many local authorities there are now bottlenecks in the system as the lack of supply means that people cannot move on from supported accommodation into a permanent home. One consequence is that the use of B&B and hotels is rising exponentially due to the lack of flow through the system.
LOCAL HOUSING ALLOWANCE
Another consequence is that when the supported accommodation is for young people often the young person has to move back into crisis homelessness accommodation as they have aged out of the support but cannot access permanent accommodation. Whilst these young people can access a shared Local Housing Allowance rate to access private renting, often this is not sufficient to cover the rent. There is also the added consideration of the appropriateness of moving to a room in a shared house after being in self-contained supported accommodation previously. Individuals are now spending longer than they need to in supported accommodation whilst they wait for a social home which can demotivate them. A common solution in the recent evaluation of rapid rehousing in Wales was to increase the supply of affordable homes.
We need to ensure that we are building the right number of affordable homes as part of a whole system approach to meeting housing need in Wales. This is so that everyone can access a home that is safe, suitable and affordable of a tenure of their choosing in the right place for them as a household. We can only do this by increasing supply of homes to ensure we can embed a person-centred approach to the provision of a home in Wales.
Cerys Clark is policy and public affairs manager at CIH Cymru