Public Rental Homes: A fresh perspective

The Housing Finance Institute (HFI) and Localis today publish a 30-page blueprint designed to stimulate a new generation of council homes.

'Public Rental Homes – fresh perspectives' provides a solution to the challenge that just 6,000 of the 52,000 new homes listed as 'affordable' in 2020/21 by local councils were truly affordable by 1.2 million households on waiting lists.

Local authorities would have the opportunity to develop plans to slash council waiting lists and galvanise local housebuilding by partnering with private developers to build homes by adopting this new-generation PRH model, that flips the traditional approach to negotiations on 'affordable' provision.

Currently councils negotiate with developers to determine the percentage of affordable homes a scheme can provide, based on the total private unit sales. 'Affordable' rents can vary from 50% of local market rents up to 90%. Subsidised sales are included in the percentages. The PRH model flips the question to 'what percentage of private homes are needed to produce sufficient PRH homes?

Under the PRH model – which deals in 'bottom up' plans, not top-down targets - local authorities would be responsible for identifying sites that might meet PRH criteria and initiate discussion with developers. For their part, developers would assume 100% of the risk and a 20% margin on both the PRH homes as well as their own private units.

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