The truth behind Osborne’s house building boast

Almost all new housebuilding is expected from the private sector


Chancellor George Osborne claimed in his Autumn Statement this afternoon that he would be supporting the biggest house building programme since the 1970s.

Amid U-turns galore – on Tax Credits and the overall Welfare Cap, with the often illusory tax take projections of the Office of Budget Responsibility enabling deficit reduction targets to be rescued – Osborne announced £6.9bn for housing by the end of the parliament.


(click to zoom)

However, Osborne’s house building boast is contradicted by the chart above, which shows how much ground needs to be made-up to approach the level of house building of the 1970s.

House building then was more than double of today’s, and comprised about 50 per cent social house building by local councils and housing associations.

This will not happen now, with almost all new house building expected from the private sector, with the exception of the so-called ‘affordable rent’ programme and some shared ownership to be delivered by housing associations.

Controversially, five nameless housing associations agreed to pilot the extended Right to Buy from midnight tonight – much earlier than planned – and must have pre-arranged this with Treasury spin doctors. This will not sit well with local councils which will have to sell council homes to cover the cost.

The consensus from housing experts is that much of the housing spending revealed has already announced, but that there will be extra cash for private house builders to provide more homes for sale linked to relaxing planning regulations.

The Royal Institution of Chartered Surveyors expressed their scepticism on Osborne’s 400,000 new homes announcement and the balance of the investment:

“A push for home ownership should not come at the expense of affordable homes for rent….home ownership can only go so far and even shared ownership may prove too expensive for some. George Osborne is essentially subsidising one sector of the housing market over all others, in an area that already benefits from significant government spending.”

There was no extra funding for social housing by councils or housing associations, which SHOUT, the save social housing campaign group, has proved to be the most cost-effective way to meet the nation’s housing needs.

Coupled with cuts in Housing Benefit, and £12bn of welfare cuts to come, the announced housing policies will push poorer households over a financial precipice, with the ‘lucky’ ones housed by the worst of the private rented sector. They will do nothing to confront a growing housing crisis across the country.

As usual, Osborne snarled his ‘all in this together’ mantra. His face told the truth but not his words.

Kevin Gulliver is a contributing editor to Left Foot Forward and a director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity

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4 Responses to “The truth behind Osborne’s house building boast”

  1. Wobbly chops

    Councils don’t have the money to build houses .

  2. Barry_Edwards

    Councils have always been able to get very low interest rates for their borrowing as they are more reliable than private borrowers and councils borrowing to build council homes is just like someone takingout a mortgage to buy a house. It’s just that the government will not allow them to borrow to build.

  3. Bradley EC

    Borrow to build. Let’s say average cost of a council-built home is 120k (flats mostly). The cost to councils borrowing 5 billion a year would be around 250 million per annum. The number of home constructed would be 41000. Rental income at 5000 per unit per year would be 205 million. Council tax around 40 million. This is very near break even once housing benefit payments are configured in.

    But the above is me playing with a calculator. Where are the Labour Party figures on an A4 handout going into every letter box in the country? Why is the Party so hopeless?

    Where were SIMPLE presentations of similar figures during last election campaign?

  4. Selohesra

    Net migration in year to 30/6 was 336,000 – I wonder why we have a house shortage

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