G15 Spending Review Submission to Treasury

The housing sector in London is at a critical point. We are in the midst of a historically bad homelessness and temporary accommodation crisis, with record numbers of people without a permanent place to live. At the same time, social landlords are facing significant financial turbulence; many are grappling with serious challenges to maintain existing homes to a decent standard. While we see it as a fundamental part of our social purpose to build the homes the capital needs, this is currently unrealistic for many. The G15 therefore welcomes the opportunity to feed in to the spending review, and outline the steps we believe are needed to turn the dial.

The key points from our response are:

Affordable housing is critical national infrastructure – HMT should consider it as such. Money spent on building homes is currently seen as borrowing or grant, rather than the creation of a national asset. If housing were to be reclassified as infrastructure, it would provide long-term certainty over funding, unlock substantial investment, and could better integrate housing with essential services.

Building and maintaining good quality social housing drives sustainable, inclusive growth. Investment in affordable housing is one of the most effective ways for government to create growth. By allowing low-income workers to live affordably in the capital, stimulating the construction industry and creating the green jobs of the future, government can unlock huge economic gains.

Housing associations could be ideally placed to support government’s aim to build 1.5 million homes, but are under severe pressure – particularly in the capital. G15 members have the experience, scale and public service ethos to build the right types of homes in London and help alleviate the housing crisis. However, our ability to do so is currently severely limited. Regulatory pressures and economic turbulence have decimated our ability to borrow and our appetite to take risks: we need government to take action to help restore this capacity, improve the confidence of our boards, and help us to start building homes over the long term.

Specifically, we need:

1. A 10-year rent settlement permitting annual rises of CPI+1% with the reintroduction of a rent convergence mechanism

2. A long-term and ambitious successor to the current Affordable Homes Programme

3. Social landlords to be granted equal access to the Building Safety Fund & Cladding Safety Scheme

4. A new Warm and Decent Homes fund

This would:

• Support inclusive growth in London,
• Help restore our long-term financial capacity so we can build new social homes in London and alleviate the temporary accommodation crisis
• Allow us to continue to improve the quality and energy efficiency of existing homes

Read our full response here