Capital grant is an effective intervention for stimulating supply of new social rented housing

Social rented housing is a key policy tool for reducing poverty after housing costs, child poverty, and homelessness. Estimates suggest 90,000 social rented homes are needed annually in England. In 2018, Homes England made additional capital grant available to deliver new social rented homes, but the funding was only available in local authorities of ‘high affordability pressure’. An evaluation of this policy change suggests capital grant is an effective intervention for stimulating the supply of social rent. Capital grant was associated with an additional 3,387 social rented homes in 2019/20, and housing associations delivered around one-half of this total. Nonetheless, the evaluation shows capital grant did not have an effect on new supply from local authorities, nor did it result in more affordable housing overall. This suggests further policy change is needed to boost capacity within local authorities and unlock sites for affordable housing development.

Read the policy brief here.



Date: October 24, 2023 5:16 pm


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