The Government is spending four times as much – some £32bn—subsidizing private housing as it is building affordable homes for low income families, a report has revealed.
The study showed 79 per cent of the total housing budget is currently spent on higher-cost homes for sale, including through the controversial Help to Buy scheme, but just 21 per cent, around £8bn, goes to affordable homes for rent.
— The Independent
Carried out the Chartered Institute of Housing (CIH), the annual review shows a significant shift away from programs that build new affordable housing in favor of subsidization. The amount of government funding granted to the Affordable Homes Program has fallen to just £285 million, down from £2.5 billion in 2010-2011. In total, public funding to help housing associations build new homes has dropped from £3.5 billion in 2010-2011 to £1.3.
In contrast, public money going towards subsidized housing has increased substantially. Government money is being diverted to help middle- and high-income households get on the property ladder through programs like the controversial Help to Buy Scheme—established by Conservative politician, George Osborne, in 2013—which guarantees for mortgages worth up to 95 percent of the value of a property. Despite being billed as a way of helping "Generation Rent" become home owners, the scheme has been criticized as useless due to the fact that first-time buyers are not be able to use it for an initial deposit on their new home.
In response to the new study, CIH chief executive Terrie Alafat, told the Independent: "We know we need to build more homes to get to grips with our national housing crisis – our UK Housing Review briefing highlights that annual supply remains at least 30,000 homes short of household growth. But it’s not just about building more homes; it’s about building more affordable homes for people on lower incomes. The Government needs to take an urgent look at rebalancing the housing budget and investing more in genuinely affordable homes for rent."
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