New research commissioned by the National Housing Federation (NHF) and conducted by Savills highlights the need for government intervention to meet the target of building 300,000 homes per year in England. This figure is critical for achieving the government’s pledge to deliver 1.5 million homes over the next five years.

Key Findings of the Report

The report assesses the market’s capacity to absorb 300,000 homes annually, examining housing delivery trends since 1945. It suggests that business as usual will not be sufficient, projecting a demand gap of between 40,000 to 95,000 homes per year. To meet the ambitious target, the report calls for significant changes in the mix of housing tenure and pricing.

Affordable Housing as a Solution

A key recommendation of the report is a large increase in grant funding for affordable housing. This would allow housing associations and registered providers to boost their delivery of low-cost homes, which could be quickly absorbed by local markets. These homes would address the needs of people on social housing waiting lists and those facing homelessness.

The report emphasizes that delivering the target homes will require not just financial support but also an increase in land supply through reforms to the planning system. It also stresses the need to address wider financial challenges facing housing associations.

NHF’s Recommendations to the Government

In response to the findings, the NHF is urging the government to take several key actions:

1. Boosting the Affordable Homes Programme:
   The NHF calls for a rapid increase in funding for the Affordable Homes Programme. They are recommending an extension of the current programme by one year, with additional funding, a shift towards social rent homes, and more flexibility around grant rates and regeneration projects.
2. Long-Term Affordable Homes Programme:
   The NHF is also asking for the creation of a new long-term Affordable Homes Programme starting in 2026. This programme should prioritize social rent and shared ownership homes and be funded at a minimum of £4.6 billion per year for the first Parliament. It should operate on a rolling five-year basis to provide stability and long-term planning security.

Conclusion

The research by Savills reveals that without substantial government support and reform, the housing market is unlikely to meet the demand for 300,000 new homes per year. To close the gap, significant investment in affordable housing, land supply reforms, and solutions to the financial challenges facing housing associations will be essential. The NHF is pushing for a major increase in funding and long-term planning to ensure the government’s housing targets are met, while addressing the urgent need for affordable housing across the country.