Social housing budget slashed in Spending Review

| October 19, 2010
Social housing budget slashed in Spending Review

As part of the Government’s Comprehensive Spending Review, it is understood that the social housing budget will be slashed by more than 50%.

The Spending Review, which will be unveiled by Chancellor George Osborne tomorrow, will provide details of how the Government intends to slash spending by £83 billion by 2014 as it endeavours to bring down the spiralling budget deficit.

Housing Associations were given a 40% Government subsidy to build around 50,000 homes last year, so if cuts reach 80% of the Budget (as some reports are suggesting), new social housing will slump to just a few hundred per year.

Meanwhile, “council housing for life” is set to be phased out – in what would be the most radical reform in housing since Margaret Thatcher introduced the “Right to Buy” in 1980.

This controversial move follows Prime Minister David Cameron’s comments in August when he suggested tenants in England should be given fixed-term contracts and should their finances improve, encourage them to move into private housing.

However, this has been met with criticism the opposition. Housing Minister Grant Shapps defended the move and said the PM was “opening up the debate”.

Currently, there are approximately 8 million tenants in social housing in England, who will also be faced with the prospect of increased rents under the proposed changes.

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  1. Chris says:

    This is going to have huge ramifications for the whole property market. Social housing will have higher rents to pay, private landlords will probably see rents fall, investors will see BTL as less of a good investment, and I think property prices in general could fall as a result of this. A change in one area having an effect on all parts of the property market.