Selling public land is making the housing crisis worse – new research

• Only 20% of new homes to be built on recently sold public land will be classified as ​‘affordable’, according to fresh research
• At the current rate, the government’s new homes target on sold-off public land will not be met until 2032, 12 years later than promised
• The public land sell-off should be halted in next week’s Budget. This would free up land for communities themselves to help deliver high-quality, affordable homes

The government’s fire sale of public land is fuelling Britain’s housing crisis, according to research by the New Economics Foundation.

Fresh analysis of recently published government statistics reveal that only one in five of the new homes to be built on public land sold off in the last six months will be classified as ​‘affordable’. Even this figure is optimistic as it uses the government’s own widely criticised definition of affordability. As little as 7% of new homes are likely to be social housing, and in some cases developments comprise solely of luxury properties.

The research also shows that new homes on formerly public land are taking far too long to build. At the current rate, the government’s target of building 160,000 homes by selling off public land will take until 2032 to achieve, 12 years later than promised.

The government’s approach to boosting housing supply by selling off public land does not do anything to address the fact that developers are incentivised to build slowly and set prices high. And as more land is sold, the opportunity is missed to plan and build the types of homes that people want and can afford.

Give communities control

By halting the sale of public land, the government could instead empower communities themselves – along with local authorities, small builders and institutional investors like pension funds – to provide more affordable, better quality homes. Community-led and social housebuilding projects with homes to rent and buy not only get the most value out of public land but also give people more control over their surroundings.

Previous NEF research revealed that community-led affordable housebuilding projects on just ten public sites due to be sold off could save £231 million in housing benefit payments over 30 years. These investments could start to make a return for the public purse within 20 years, all while alleviating severe housing need across the country and putting communities in charge of their own housing provision.

Alice Martin, Housing Lead at the New Economics Foundation, said:

“The government’s fire sale of public land is failing by its own measure and making the housing crisis worse. This irresponsible approach is bringing to market a slow trickle of property that few can afford.

Every day, people are finding it harder and harder to find an affordable place to live. Next week the Chancellor could help people take real control over their lives by putting an end to this land sell-off.

Public land should be put to public use. The Budget is a chance for the government to empower communities so they can help build the good quality, affordable homes we so desperately need.”

The scale of the housing crisis

Homeownership is at its lowest levels since the 1980s as both house prices and social rents continue to rise faster than income growth. Government interventions to help first-time buyers have worsened the affordability crisis by inflating house prices by up to £8,250 per property. As most people cannot afford to buy now even with a mortgage, cash buyers such as second homeowners and buy to let landlords are propping up the market. By far the biggest portion of government spending on housing goes on the housing benefit bill which costs £21 billion each year. Meanwhile there are over 70,000 households in England living in temporary accommodation, up from 48,000 in 2011.

Notes to editors

1. The New Economics Foundation is the UK’s only people-powered think tank. The Foundation works to build a new economy where people really take control. www​.newe​co​nom​ics​.org
2. Methodology: analysis is based on data published by DCLG in February 2017:
3. This was used to establish public land sites sold off in Q1 and Q2 of 2016/​17 reporting period. The development plans for those sites with full planning permission were then analysed through desk research to establish that only 20% of homes on those developments are classed as ​‘affordable’. This is based on the Government’s definition of affordable which includes sub-market rental and shared ownership schemes that are set at up to 80% of market rates. Since 2015 land has been released for 13,817 homes, a rate of 813 homes per month. At the same rate it would take a further 180 months, or 15 years, to reach the government’s target of 160,000 homes built on sold-off public land. That would take us to 2032.
4. For previous NEF research on the savings in housing benefits payments from community-led housebuilding, see here. 
5. Sources for statistics on the scale of the housing crisis: National Audit Office; Shelter; Nationwide.
   
6. The New Economics Foundation’s work is supported by the Nationwide Foundation, an independent charitable funder which aims to increase the availability of decent, affordable housing for people in need. A key part of the Nationwide Foundation’s strategy is backing community-led housing to increase the number of available homes. To help achieve this, the grant given to the New Economics Foundation will increase access to land and properties currently not used as homes. Find out more: www​.nation​wide​foun​da​tion​.org​.uk or follow @NationwideFdtn
7. The New Economics Foundation is campaigning to help more communities have a say over land use and housing in their area. Find out more: www​.newe​co​nom​ics​.org/​h​o​using.