Liam Halligan: Why aren’t we building more council houses?

Now On The Money often talks about housing. Since we lauched this show in September, we’ve held several discussions on how difficult and costly renting is for so many – particulaly young people.

And as for actually buying a home, as prices have soared over recent years, with earnings failing to keep up, countless adults are now locked-out of home-ownership – a trend that is causing huge anguish, discouraging couples from settling down and having a family.

There is one aspects of the UK’s on-going housing crisis, though, that is often over looked. The chronic shortage of subsidised social housing – that is homes built by local councils or charitable housing associations that are rented out at below-market rates, often for life, to low-income and otherwise vulnerable families.

The council house waiting list is now more than a million long – and the chronic shortage of social housing has seen, at the sharp end of the housing market, an escalation over recent years of over-crowding and deprivation.A major problem is that local authorities across the UK have we’ve pretty much stopped building social housing.

During the immediate post-war years, we were building over 150,000, sometimes almost 250,000 council houses each year. That number remained high, under government’s of both shades, with the Tories in blue and Labour in red, into the 1970s. From the late 70s onwards, the Conservative Thathcher government built fewer council houses, while selling some off.

But it was under the Labour governments of Brown and Blair during the first deacade of this century that the construction of social housing really plunged.

Today, the New Economics Foundation has published a report highlighting that countless local authorities are at risk of building no more social housing at all due to rising costs of obtaining land and paying for construction.Newcastle, Northumberland, Birmingham and Nottingham among 11 local authorities at risk of this building freeze, says the New Economics Foundation says, working with the housing consultancy Altair Ltd.

And eight of these 11 councils are in the north and midlands, where the collapse of social and affordable housing delivery removes a vital tool for post-pandemic recovery, undermining the government’s ‘levelling up’ agenda.

As our post-pandemic economy struggles to reboot, shortages of both labour and materials is driving up building costs. The Office for National Statistics says the cost of construction materials was 20% higher in July than the same month in 2020.

Around 18 per cent of the UK population live in social housing – down from almost a third in the late 1970s. Yet amidst our on-going housing shortage, as buying becomes increasingly difficult, the need for more council houses is ever more pressing.

This often forgotten part of our housing crisis – the part that causes the most most human misery – needs urgently to be addressed.

And that’s our On The Money question today.

Why aren’t we building more council houses?