The presumptive prime minister’s plans to build more local authority homes face multiple hurdles
Daily Telegraph 11/07/26
Nostalgia. Ah, that gloriously intoxicating longing for the warm glow of an imagined past that never really existed.
But then, almost anything seems better than today’s broken Britain, with its stagnant living standards, rapidly changing demographic and failing public services.
The decade most fondly remembered in this regard tends to be the 1950s, when Britons were said to have “never had it so good”. It scarcely needs saying that the reality for many people back then did not live up to this sugar-coated perception of Britannia at its finest.
But one thing they did seem to get right was that lots of houses were built for Britain’s fast-growing, baby-boomer generation. This was the golden age of UK housebuilding, with more than two million new dwellings built across the decade.
More than half of these were council houses to replace homes destroyed in the Blitz, and more controversially, those bulldozed in the name of social engineering by “slum clearance” programmes.
By the way, many of these “slum” dwellings, if suitably done up, would today be regarded as highly desirable. Some of the high-rise constructs that replaced them have become Britain’s worst sink estates.
In any case, it is to this era that Andy Burnham, Britain’s prime minister-in-waiting, looks nostalgically back for solutions on one of contemporary Britain’s most pernicious problems: lack of affordable housing.
His big idea is another mass programme of council-house building. He can hardly be blamed for seeking alternative answers. Sir Keir Starmer’s plans for an additional 1.5 million new homes across the parliament have already failed miserably.
This target was substantially built around the assumption that planning reform alone would unleash a tsunami of private-sector house building.
Sadly, it has not. Indeed, some of Britain’s largest housebuilders are further scaling back their ambitions after pressure from investors in the face of falling profits to devote capital to share buybacks instead.
The optimism of Sir Keir’s first months in power has given way to downbeat resignation. It is hard to make housebuilding pay in a world of stagnant disposable incomes and supercharged inflation in construction costs.
If the private sector won’t do it, then the Government must instead, Burnham figures, but already his stated objective of the “biggest council house building programme since the post-war period” is looking more than a little questionable.
At their peak, the Conservative governments of the 1950s were churning out new council flats and houses at the rate of around 200,000 a year. This was possible not just because of abundant quantities of derelict land but also because construction costs were just a tiny fraction of what they are today.
Back then, a typical three-bedroom semi could be built for less than £1,000, or around £25,000 in today’s money. Analysis by the Centre for Policy Studies (CPS) puts today’s costs at £251,700, and that’s before taking account of buying the land.
Not all social housing is three-bedroom semis. Alas, estimates for less spacious accommodation are scarcely more encouraging. Part of Burnham’s plan is for high-density, studio-like accommodation similar to that successfully rolled out in Tokyo to answer prohibitively high land prices.
Even so, the £39bn, 10-year affordable housing budget – which Burnham has earmarked in its entirety for council housebuilding – is not going to buy many new dwellings.
Little more than 200,000, in fact, if the National Housing Federation is right that it costs £183,000 on average to build a social-rent property – or just 20,000 a year.
No doubt average costs can be brought down a bit by reducing the price of development – in particular, still onerous planning restrictions and building regulations. Dropping minimum size and biodiversity requirements would surely help.
The stipulation for two staircases in all developments above six storeys is also unnecessary, and is holding up many projects that would otherwise be viable.
But none of this is likely to generate a 1950s-style housebuilding boom. What’s more, claims by Burnham that building more council houses will at least in part pay for itself by reducing the housing benefits budget look dubious at best.
At £37bn for last financial year, spending on housing benefit is admittedly, and shamefully, completely out of control, and is widely gamed by private landlords.
On the other hand, these payments are by no means confined to private rents; quite a lot of council tenants also qualify for housing benefit and/or the housing element of universal credit.
Moreover, the much lower rents charged on council houses are highly subsidised by the taxpayer and typically don’t even cover the costs of maintenance, let alone the capital costs of construction.
The details needn’t concern us here, but the CPS calculates that the explicit and implicit subsidies for public housing cost the country an astonishing £79bn a year in England alone.
There is also something deeply divisive, unfair and destructive about the whole notion of council housing. All too often, it is a recipe not for enhanced opportunity but for resentment, degeneration and social disharmony.
Why should anyone living on well above-average earnings live in a council house? Yet tens of thousands do.
Tenancies are often granted for life, taking no account of changed earnings and circumstances, and in some cases can even be inherited by children. How is that fair? Better quality social housing is bitterly fought about, and often causes lasting animosity within the community.
I realise that this kind of criticism is not particularly helpful to the cause of Britain’s housing shortages, but all that money might much more usefully be applied to promoting home ownership, not to subsidising social rents.
Instead, Labour seems determined to punish home-ownership ever more harshly, the latest crackpot idea being a catch-all 1pc tax on the value of your property.
I hardly need to spell out the benefits of home ownership to readers of The Telegraph. It provides a sense of belonging and security; it is a store of value; it gives citizens a stake in the economy in which they live and work; it builds a strong work ethic; and it promotes better care of property and the immediate environment.
Some 80pc of Singaporeans live in public housing, but rather than renting as occurs with council housing in the UK, the state subsidises them to buy the property, typically under 99-year leases.
Granted, the ways of a small city state such as Singapore would be hard to replicate in a much bigger, mature, advanced economy such as the UK.
But answer me this. Why does the UK spend far more as a share of GDP on housing benefit than Singapore does subsidising home ownership?
Something is structurally wrong here, surely. Nostalgia for the golden age of council housebuilding is hardly likely to correct it.
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