How to fix the housing crisis? An eight-point plan to perfect the art of the possible.


By Matthew Nimmo – Director and Housing Leader at Inner Cirle Consulting and Emma Peters – Director at Inner Circle Consulting.

How to fix the housing crisis? We need significant structural changes to the way the UK plans and delivers homes. We need more funding from more sources. We need to fix the broken land market. We need densified development in towns and cities and new settlements, help for small local developers to break into the market, support for community land trusts.

It’s a checklist that can feel like a ‘wait and hope’ approach. But local authorities can take action right now within existing policy, legislation and systems. Working with councils across the UK we have come up with an eight-point plan that every council can consider. Call it the art of the possible.

One: Listen to communities – they want to talk to you – to better meet local housing need and manage demand for affordable housing. A residents survey launched by Cornwall Council to assess local people’s experience and housing need was completed by more than 2,500 people and informed a comprehensive housing crisis plan to address local issues such as second homes and invest in the right types of homes for local people. Elsewhere, Great Yarmouth cut the council housing waiting list by 95 percent and Luton Council used data to understand local issues driving homelessness and support families at risk.

Two: Reboot the Housing Revenue Account (HRA.) With government support at an historic low, councils must make the most of this ring-fenced funding for housing. Where HRA spending is based on historic budget allocations, tweaks to assumptions about inflation, management costs and future rent rises can make a huge difference to the amount of funding available. And the impact is greater still when spending is rebooted to align with a council’s strategic priorities. 

Three: Redefine council housing. A nuanced combination of tenures is easier to finance and can support a mixed community by meeting a range of local needs. Barking and Dagenham Council has effectively redefined council housing to mean council owned homes with security of tenure offered at a range of rents to meet local need, based on analysis of local households’ ability to pay. Some of these are at ‘council-equivalent’ rents but do not qualify for Right to Buy, protecting the investment in new affordable housing.

Four: Embrace specialist housing. Housing types that address different community needs can support vulnerable residents, recognise multi-generational households and free up properties for others. This can save money when councils take a cross-departmental preventative approach: Our work supporting local authorities to set up affordable Independent Living Programmes demonstrates that capital investment in such schemes can significantly reduce revenue spending on, for example, adult social care.

Five: Become a developer, but do not underestimate the complexity of the task. Councils must build the right teams and support them with procurement, finance and design advice. They must put in place strong risk management systems and governance. And they must attract staff from established players by offering the right conditions and long-term commitment to the work: private developers and major housingassociations have delivery teams and systems built over years. Remember too that wholly owned companies (WOCs) are an important part of housing delivery as long as they are designed to achieve the council’s objectives. If delivering social housing is the goal, a WOC cannot also deliver revenue returns to the host council. If an income stream is the priority, the skills and experience of staff must support commercial activity.

Six: Collaborate and modernise. Training is vital to combat skill shortages holding back many councils’ ability to ramp up their delivery capacity. A short-term answer is to maximise the benefit of existing skilled staff and find new ways of doing things. Current examples of this include the Association of South Essex Local Authorities, seven councils working together to deliver a consolidated pipeline of housing schemes, and Enfield Council, inviting housing associations to be part of a development management procurement framework.  

Seven: Lead a high quality private rental sector. Build to Rent (BtR) developments, which seek to complete construction and move to rental income quickly, have been shown to provide high quality, professionally managed and tenure-secure homes. Local authorities can play a leading role in this space by adopting planning policies (in line with national planning guidance) that recognise and encourage BtR and by investing in BtR development programmes that set high standards.

Eight: Densify. With little prospect of changes to government policy on green belt release, new supply can be found via densification of existing settlements. Estate regeneration and redeveloping town centres can bring residents, visitors and workers back into the heart of places. Councils can also use planning policy to encourage private homeowners to extend or redevelop their own homes as Haringey Council has done. Densification can also be part of climate emergency plans to upgrade and retrofit housing. We have developed a stock appraisal model to help identify the best locations, based on strategic fit, benefits to local residents and deliverability.