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Report Questions Cost and Impact of Burnham’s £39bn Social Housing Plan

A report by the Centre for Policy Studies (CPS) has raised concerns about Andy Burnham’s pledge to invest £39bn in new social housing. The CPS analysis suggests the plan could deliver only a fraction of the homes needed and increase long-term costs to taxpayers.

The CPS report, titled “England’s £79bn Housing Subsidy,” estimates that Burnham’s proposed investment of £3.9bn per year over a decade may fund the construction of between 14,335 and 15,494 homes annually. This is said to represent around 5% of the government’s annual housing target. The report bases its estimate on construction cost data from the Housing Forum, which puts the average cost of building a three-bedroom semi-detached house at £251,700, excluding land costs.

The CPS also references the performance of Sadiq Khan’s Affordable Homes Programme, which began construction on 14,335 homes with a similar level of annual funding. The report argues that social housing requires significant ongoing public subsidy beyond initial construction costs. According to the CPS, average social rents in England are lower than the annual cost of managing and maintaining properties, resulting in continued reliance on taxpayer support.

The report states that the average social rent property generates £5,942 in annual rent but costs £6,280 a year to manage and maintain. In London, the gap is wider, with average rents of £7,380 compared to annual costs of £8,720. The CPS highlights that £32bn was spent on housing benefit and the housing element of Universal Credit in England during 2024/25, and claims the UK spends a higher proportion of GDP on housing allowances than any other OECD country.

Additionally, the report estimates that social rents are, on average, £10,250 a year below equivalent private sector rents. Across England’s estimated 4.2 million social homes, this is calculated as an implicit annual subsidy of around £43bn. Combining direct housing support with the estimated value of below-market rents, the CPS concludes that social housing in England benefits from around £79bn a year in explicit and implicit taxpayer subsidy.

The findings reflect the analysis and conclusions of the Centre for Policy Studies. Burnham has argued that increased investment in social housing is needed to address chronic undersupply and improve housing affordability.