Britain's Housing Crisis Demands a Radical Rethink
My guess is that the positive response from some local residents to the housing development scheme for Greenwich Peninsula, might not be shared by the over 22,000 households on that borough’s waiting list nor those enduring life in temporary accommodation. I say that because of the over 1,500 planned new homes, a mere 168 will be for social rent.
I mention this scheme but I am sorry to say that this represents the norm and has done so for far too many years. In my own Dagenham and Rainham constituency, the major Beam Park development will comprise over 3,900 new homes, but only 10% are set for ‘affordable’ rent and of course with that rent at up to 80% of the level of local market rents, that is out of reach for families on modest incomes from employment. The national figures expose the staggering reality of our broken housing system: of the 208,600 homes delivered in 2024/25, only 12,198, or just 6%, were let at social rent by councils and housing associations.
This is hardly surprising when our housing model is shaped by the profit margins of major developers. Since coming into power, the Labour Government has brought about measures that will help increase the delivery of social rented homes. Massively uplifting investment in the Affordable Housing Programme in England to £39 billion over 10 years and a continuation of the Public Works Loan Board discounting the interest charge to councils for building homes, will contribute to increasing the supply of homes to meet housing need.
But, as positive as these actions are, they will not significantly shift the pattern or scale of development. And yet, it doesn’t have to be this way. The key to making the sea change is the source and method of funding for new housing schemes. Higher grant levels for truly affordable social rent homes is necessary, but not the principal factor. It’s the cost of borrowing to fund the development and construction costs of house building that determines what the new homes will be and for whom.
What is known is that there is an alternative and abundant source of funding that seeks a long term safe guaranteed yield, a ‘patient’ form of investor. A way forward has been shown in a report, ‘Mind the (viability) Gap’ from the Purposeful Finance Commission, led by the Pensions Insurance Corporation (PIC), together with Wates Group and Igloo Regeneration. One of the asks in their report that will help deliver higher volumes of genuinely affordable homes, is to give local authorities simpler and stronger powers to acquire stalled development sites or underused land at realistic prices, closer to existing use values and not so called ‘hope’ values.
In my own Dagenham and Rainham constituency there is a housing development scheme currently with the local planning authority that demonstrates what can be achieved with this fundamentally different funding approach. The scheme will deliver 1,298 homes - 60% at social rent level and 40% specifically for key workers at Key Worker Living Rent, with first priority for this category going to NHS staff employed in North East London.
I believe if Government housing construction targets are to be met and if we are serious as a nation about tackling the housing emergency, we can begin to give hope to the almost 1.4 million households on waiting lists and the 135,000 in temporary accommodation by mobilising at scale this ‘patient’ investor model to provide the volume of new truly affordable homes. However, this will only come about if we change how we fund housing development. The good news is that alternative sources of funding do exist and are ready to step in and deliver the social housing boom Britain desperately needs.
Margaret Mullane is a British Labour Party politician who has represented Dagenham and Rainham in Parliament since 2024. She took over the seat from Jon Cruddas, who announced in 2022 that he would not seek re-election and for whom she previously worked as office manager. Before entering Westminster, Mullane built substantial experience in local government, having served as a councillor for the Village ward on Barking and Dagenham London Borough Council since 2010. During her time in local government, she held the position of Cabinet Member for Enforcement and Community Safety, giving her particular expertise in crime prevention and public safety matters.
Margaret Mullane's background in both parliamentary office management and local authority leadership has shaped her focus on community welfare and security issues. She writes commentary for Comment Central.
Most Popular
What to read next
