Government Statistics On Social Housing
Social housing is a vital element of the approach that the UK takes to ensure that its residents are able to enjoy secure and stable housing, which doesn’t cost more than it should. Yet the trend in recent years has seen demand for this important resource greatly exceed the stock of available properties. As a result, many social problems, including homelessness and overcrowding, have increased, together with a number of high profile instances of people falling ill as a result of being forced to remain in poor quality accommodation.
Whilst social housing is created and managed by local authorities or not for profit housing associations, there are regularly published government statistics relating to the subject of social housing. Right now, it appears that there is some good news to be celebrated.
The Report On Social Housing
The latest government report was published at the end of October 2022, and highlighted a number of key statistics. The report itself was drawn up by the Regulator of Social Housing, which deals with figures relating to social housing owned by local authorities, housing associations, and private providers of this type of accommodation.
According to the Government website, the Regulator of Social Housing “promotes a viable, efficient and well-governed social housing sector able to deliver and maintain homes of appropriate quality that meet a range of needs. It does this by undertaking robust economic regulation focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumer standards and may take action if these standards are breached and there is a significant risk of serious detriment to tenants or potential tenants.”
This body, therefore, reflects the primary purpose of all social housing, which is to provide safe, stable accommodation which is of good quality and which is rented for a price that reflects the typical salaries in the area. Tenants of social housing also have greater protections against the threat of eviction, and rental increases are limited by special legislation. This makes this type of housing a good option for those claiming benefits or who require specialist services. In addition to rental properties, social housing may also include shared ownership and “Help to Buy” properties.
However, there is a severe shortage of such accommodation here in the UK, with demand increasing as the cost of living crisis continues. Right now, records show that in some local authority areas, there are currently more than 21,000 people waiting for social housing to be made available to them [1], whilst it is estimated that a staggering 17.5 million people in the UK are affected by the current housing emergency [2], which includes those forced into homelessness or unsuitable temporary accommodation.
An Increase In Homes
In March 2022, when the data used in the Regulator of Social Housing report was collected, there were 1614 registered providers of social housing [3]. For the purposes of this report, homes or “units” included both self-contained properties such as houses or flats, and bed spaces in shared accommodation.
A survey of all such registered social housing providers showed that this section of the property market now owns 4.4 million homes in England alone, which represents a net increase of more than 31,000 social housing properties this year. Of these 4.4 million properties, 2.8 million of these were owned by private social housing providers, whilst local authority registered providers owned just 1.6 million.
The 64 providers of social housing which is run for profit reported that they provided more than 20,000 units in 2022, which is a substantial increase on the previous year’s total figure of around 13,500 units.
Social rents also increased during this period, with the average weekly rent rising by 1.6%, which is in line with the restrictions placed on this type of housing. This increase was expected due to the rise in interest rates, but it meant that social housing remained a far more affordable option than private tenancy. For example, the average social rent in London (the most expensive region) was still just £116.16 per week.
A Sector With Continued Liquidity
The Regulator of Social Housing also published a review of the financial health of the social housing sector in relation to the private providers of such properties. This report is significant, as it shows the current return on investment for those interested in approaching the social housing deficit with an eye to making a profit. The 2022 report shows that although the average operating interest level cover is expected to decline to 92% over the next year (from 111% this year) [4], this is still an area that is seeing healthy levels of investment. New capital has been secured, with an increase of £0.4 billion being borrowed in the third fiscal quarter of 2022. This meant that the quarterly borrowing was valued at £1.4 billion, of which 58% was new facilities from capital markets.
Meanwhile, private social housing providers spent £3 billion on new homes during the third quarter of 2022, and it is predicted that the coming year will see more than £17 billion invested in building new social housing, which would represent an impressive increase of 38% on the previous year’s figure.
Invest In A Key Area Of The Property Market
There is a real ongoing need for social housing stock throughout the UK, which means that it can represent an excellent investment opportunity and one which is also proven to provide a real boost to the UK economy. Best of all, by opting to work in the social housing sector, you can make a real difference to the lives of people in need based in your chosen community. If this sounds like an area of the property market that is of interest to you, then please get in touch with our team of experts today. Here at Solid Property Deals, we can offer vital portfolio insights, together with advice as to how to proceed with your investment.
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[2] https://england.shelter.org.uk/support_us/campaigns/what_is_the_housing_emergency