Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

CPS: Burnham’s Council Homes Plan Could Cost £79bn Annually

A report by the Centre for Policy Studies (CPS) claims that Andy Burnham’s plan for the largest council housebuilding programme since the post-war era could cost taxpayers £79bn a year in England. The centre-right think tank argues that the proposed initiative would create significant ongoing costs for the public purse.

Burnham’s plan reportedly involves redirecting £39bn of public spending already allocated through the government’s Affordable Homes Programme. In a recent speech, Burnham highlighted the loss of almost 1.5 million council homes since the 1980s and the current number of people on housing waiting lists. He described the country as being in a “housing trap,” with rising costs in the private rented sector and increased pressures on councils to provide temporary accommodation.

The CPS report, led by head of housing and infrastructure Ben Hopkinson, argues that the proposed funding may deliver only a small fraction of the government’s annual housing target. Hopkinson cites The Housing Forum’s estimate that building a three-bedroom, semi-detached house costs £251,700, even if land is provided for free. According to the CPS, £3.9bn per year would fund just 15,494 houses, and the actual number could be lower.

Hopkinson outlines several ways in which social housing is subsidised by taxpayers. He states that social homes are let at rents below maintenance and management costs, creating ongoing liabilities. For example, the average English social rent home charges £5,942 a year but costs £6,280 to maintain, while in London, the gap is £1,340 per home annually.

The report also notes that in 2024/25, the UK spent £36bn on housing benefit and the Universal Credit Housing Element, with England accounting for £32bn of this. Hopkinson claims the UK spends the highest percentage of GDP on housing allowances among OECD countries.

Additionally, the CPS estimates that the average social home is let for £10,250 less than a privately rented property, amounting to an implicit subsidy of £43bn a year across England’s 4.2 million social homes. The CPS concludes that, when combining explicit and implicit subsidies, public housing costs the country £79bn a year in England alone.