Offering tax credits to private sector companies could spur the building of 90,000 social rent homes in England, according to a report spearheaded by the º£½ÇÊÓƵ's largest listed residential landlord.
Grainger plc's paper says more than £18.8bn in annual subsidy will be required to build the homes, taking inspiration from similar tax incentives used in the US. Together with input from industry names such as Arcadis and Savills, the report urges that such investment is "essential to tackling the housing crisis" and creating long-term social and economic benefits.
Along with housing associations and housebuilders, the authors say private capital can be used to build homes now in exchange for future tax relief. They also make the case for other measures including further reform to Right to Buy to preserve affordable housing stock, the introduction of "flex rent" that links rents to household income and recapitalisation of the recent 10-year rent settlement in the housing association sector.
Grainger's model assumes half of the 90,000 homes would be built as suburban houses and the other half as apartments in city centre blocks. They point to the £2.8bn annual cost to the public purse for temporary accommodation, and say that in theory, investment in 130,000 social rent homes - at £209,000 subsidy per home - could reduce the current bill to zero.
The report argues that social rent homes "simply do not pay their way" and that the Government's ambition to build 180,000 social rent homes and a further 120,000 affordable homes with the 10-year £39bn Social and Affordable Homes Programme is "not enough on its own". It adds: "The alternative, of doing nothing more, will be a continued housing shortage, escalating temporary accommodation and housing benefit costs, and growing social inequality representing a far greater cost and threat to society and the economy."
Economist Dame Kate Barker said: "Social rent homes are vital for many people, yet they are often in short supply. This is an important paper that uses careful data analysis to reveal the true cost of providing social rent homes in different locations. It also suggests that as a society we are missing out on the wider benefits of social rent by focusing too much on upfront costs."
Helen Gordon, chief executive of Grainger plc, said: "We’re proud to contribute our expertise to this important work. Grainger understands both the challenges and the benefits of delivering new homes in the º£½ÇÊÓƵ, and how essential it is to factor in the cost of capital and the true cost of delivering social housing.
"A home is the foundation for life and essential to the growth and wellbeing of our communities. Delivering social rent homes is not only critical to addressing the housing crisis, it will also enable us to address the viability challenges of housing projects across all tenures, helping to unlock a broader mix of homes and create balanced, sustainable communities."
Fiona Fletcher-Smith, CEO of L&Q, said: "Delivering social rent homes at scale is not just a policy ambition - it’s a social and economic necessity. We know from experience that stable, affordable homes transform lives and strengthen communities. But to meet the scale of need, we must be bold: that means long-term investment, innovative funding, and a shared commitment across government, industry, and society.
"The time for incremental change has passed; we need decisive action to ensure everyone has a safe, secure place to call home and I am delighted that Grainger has convened the industry and policy makers on this critical issue."
