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.
