This piece was first published in the Fabian member policy group report “Homes for London”
Introduction
The Labour Party has a proud history of building council homes. A century ago, during Labour’s first Government under Ramsay MacDonald, housing defined Labour’s major achievements. The Wheatley Act spurred the construction of 508,000 council homes for working class families and it upgraded council homes with requirements for bathrooms rather than a simple bath in the scullery. Through housing, MacDonald’s short time in government changed the lives of millions for the better.
Today, the demand for good quality council homes in the UK far outstrips supply. Over 1.2 million people are stuck on ever-lengthening waiting lists for social housing, with many waiting over a decade for a safe and affordable place to live. Many more are ineligible to be on the list, or do not bother because they think they have no chance of a council home. At the same time, hundreds of thousands of people are homeless, with thousands sleeping rough on the streets each night.
The chronic shortage of social housing can be traced back to the dramatic reduction in housebuilding after the 1980s. Between 1947 and 1980, an average of over 120,000 council homes were built every year across the UK. Yet by 2022, that figure had fallen to under 8,000. With the sale of millions of council homes under right-to-buy schemes, the total number of social rented properties has halved over the past 40 years.
As a result, families in need of affordable housing face a bleak situation. Existing council homes are often outdated, poorly insulated and sometimes dangerous. Over 500,000 social homes don’t meet basic health and safety standards. At the same time, new social housing is barely being built to replace this ageing stock. Waiting lists continue to lengthen as those in need struggle to find an affordable home.
The social housing crisis is particularly acute for the most vulnerable in our society. An estimated 138,000 children in England are in temporary accommodation. People with disabilities also face long waits, unsuitable properties and discrimination from landlords when seeking an affordable home. For many, the only options are expensive private rented housing or even homelessness.
Clearly, the chronic under-supply of good quality, affordable council housing is harming millions of people across the UK. Innovative solutions are urgently needed to renew and expand social housing provision. Estate renewal ballots are a promising policy solution that seeks to unlock development of more and better council homes.
Existing council estates
Much of the existing stock of council housing in the UK dates back to the post-war building programs of the 1950s, 60s and 70s. Tower blocks and low-rise estates were built rapidly to replace slum housing and accommodate growing populations. At the time they were built, these modern blocks provided a lifeline to thousands who finally had a home of their own, but these ageing estates are now poorly suited to modern needs.
The Packington Estate, Islington. Source: David Holt
One issue is their inefficient use of land, with large underused spaces separating tower blocks from the street – the so-called ‘towers in the park’ model. Replacing these towers with buildings that make better use of the land can deliver more homes without going higher, all while better integrating council homes with the wider streetscape. Many post-war estates also suffer from poor insulation and outdated layouts. Concrete blocks leak heat making them cold in the winter and very expensive to heat. This can also lead to severe issues with damp and mould, endangering the health of residents. The flats are often small by modern standards, with large, sometimes multigenerational, families stuck in small homes that lack outdoor space, not even a balcony. Estate renewal projects seek to address these issues by increasing housing density on existing estates. This allows construction of new, high-quality council homes alongside refurbishment or replacement of outdated existing flats. For the many councils in unaffordable areas, particularly those who have no ability to expand into unused land, making better use of public land in this way is key to providing more and better social housing.
How estate renewal can help
The point of estate renewal is to provide better council housing through a process of demolition and rebuilding, with existing residents at the heart of decision-making. The key is the use of ballots to ensure tenants are fully on board with the plan for their homes.
Typically, a council will propose renewing an estate to address issues like poor living conditions, overcrowding and to build additional council homes on underused land. It then consults closely with residents to develop initial proposals.
In London, the GLA will not provide funding unless a formal ballot allows every tenant to vote on whether to proceed. Crucially, this ensures that residents get the final say over the future of their homes. Renewal only goes ahead if the proposals are approved by a majority of residents. Of the 30 ballots held in London, 29 passed on the first vote, often with overwhelming majorities. This control is crucial to creating trust in the process. Councils must convince residents the disruption will be worthwhile through guarantees like new improved homes, financial assistance to move, and the right to remain living on their estate. Of course, it is important to make sure that those promises are honoured in full.
Where ballots succeed, the old estate is then replaced in phases, with tenants relocated. Good practice is to offer a ‘one move promise’, where tenants only move once, into their new home. Resident leaseholders should also be given the opportunity to return to the estate at no additional cost, or to sell their flat to the council or housing association for a fair price. New buildings mix restored social housing with new flats sold privately to cross-subsidise the scheme. Phase by phase, outdated homes are replaced with high-quality, affordable council flats. Accessibility, amenities and public spaces are also improved.
Once complete, estate renewal provides existing tenants with modern, efficient council homes. And by using vacant land and increasing housing density, there should be a net gain in social homes – helping people off waiting lists. New private flats help the scheme pay for itself whilst bringing wider renewal benefits too.
With strong tenant oversight through ballots and managed rehousing, estate renewal offers a route to better living standards for existing residents whilst expanding affordable housing. It is hard, complex work, but many Labour councils have successfully shown how to win support for these schemes. The model demonstrates that regenerating rundown estates can transform outcomes for social housing tenants and the wider community.
Potential for better and more homes through estate renewal
A key benefit to existing residents is through reducing energy bills with modern insulation and heating systems. The poor insulation in most post-war blocks imposes high heating costs on tenants. By replacing ageing flats, new homes can be built to the latest environmental standards. This provides homes that are both warmer and less expensive..
Rebuilding also gives the opportunity to update interior layouts to better suit modern lifestyles. Open-plan kitchen-living areas can replace small, separate rooms. Adding balconies or other private outdoor space brings health and wellbeing benefits. New family homes can have enough bedrooms and bathrooms to prevent overcrowding.
Of course, it is critical that the increased housing density creates a net gain in social housing units. This helps expand affordable housing in unaffordable urban areas where demand is highest. By making better use of public land and replacing low-rise blocks with well-designed higher density homes, councils can make new flats available for people on council waiting lists.
Without generous central funding, delivering new, high quality council homes depends on building some market homes for sale to generate funding. But done well, this cross-subsidy model can enable dozens or even hundreds of new social rented flats.
The Packington Estate following a successful renewal. Source: HomeViews
Estate renewal as a fiscally neutral solution
There are major fiscal barriers to the large-scale expansion of council housing, especially in the current economic climate and in places with little scope for value capture on greenfield sites. The costs of refurbishing poor quality homes, building new flats and compensating tenants are prohibitive for local authorities facing tight budgets.
However, the cross-subsidy model used by most estate renewal programs can give a fiscally neutral solution where local prices support it. Refurbishment and replacement of existing flats with construction of additional market sale homes can cover the costs of better social housing.
The idea is that the profits from selling a proportion of newbuild homes at market rates are used to fund the reprovision and upgrade of council flats, at no overall cost to the public purse. Schemes are designed to pay for themselves over the long term. In areas of high housing demand, new private flats on renewed estates can sell at substantial prices. This generates sizable capital to reinvest into council housing.
Compared to the status quo of ageing social housing stock and poorly maintained existing council flats, estate renewal can provide a fiscally sustainable path to positive change in at least some high demand areas like Inner London. The cross-subsidy element of estate renewal means it works best in the least affordable places. These are often also the places where council house waiting lists are under the biggest strain. This funding model does not necessarily rely on enormous central government grants. Instead, it harnesses the potential of underused land to build more homes.
Improving estate regen
While estate renewal programs have significant potential, there are ways to further improve outcomes for residents and increase delivery of high-quality, affordable homes.
First, a petition process should be opened up to allow residents to proactively request regeneration of their estate. This would shift dynamics towards resident-led change, giving ambitious councils the confidence to embark on projects with resident support.
Second, central government has a key role to play in encouraging greater council ambition on estate renewal. Strong leadership from the Secretary of State for Housing is needed to promote the benefits of estate renewal and building more council homes. Many local authorities lack confidence and experience in proactively initiating complex renewal projects. Clear messaging on the government’s strategic housing priorities, alongside financial support for planning and resident engagement, can incentivise more estate regeneration schemes coming forward. Central government can also help in encouraging utility companies, Network Rail and other bodies to promptly do what is needed to help deliver estate renewal without delay.
Third, we need rigorous evaluation of completed renewal projects to identify best practice. When executed well, cross-subsidy models can transform run-down estates into vibrant mixed communities with high-quality affordable housing. However, there have also been controversial schemes. Assessing outcomes and highlighting best practice can help replicate success and avoid past mistakes.
Estate renewal provides a major opportunity to tackle the social housing crisis through upgrading existing stock and delivering new council homes. With determined action, the next Labour Government can empower councils in unaffordable areas to use estate renewal to provide a new generation of council homes.
Recent Comments