Andy Burnham’s plan for a huge social housebuilding programme will be expensive and won’t solve the root cause of the housing crisis: we just haven’t built enough houses, says Emma Revell Andy Burnham isn’t letting a little thing like constitutional reality get in the way of starting his premiership with
Emma Revell
Thursday 09 July 2026 5:53 am | Updated: Wednesday 08 July 2026 5:04 pm
Andy Burnham’s plan for a huge social housebuilding programme will be expensive and won’t solve the root cause of the housing crisis: we just haven’t built enough houses, says Emma Revell
Andy Burnham isn’t letting a little thing like constitutional reality get in the way of starting his premiership with some big announcements.
The de facto Prime Minister hasn’t met the King yet, never mind moved into Downing Street, but he’s already gone further than Boris Johnson in deciding that No 10 doesn’t need some new wallpaper, but does need half its functions moved 200 miles up the M40.
As if setting up a whole new hub for government conveniently located near his existing home (and football team) wasn’t enough, Burnham has also pledged to tackle the housing crisis by “launch[ing] the biggest council house building programme since the post-war period” because “nothing else will fix it”.
As my colleague Ben Hopkinson wrote, it’s a great soundbite – but shoddy economics.
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Earlier this week, Ben published a briefing which set out what our existing social housing stock actually costs the taxpayer. The numbers aren’t small. The implicit and explicit subsidies provided for our social housing stock – the fourth-highest as a share of all housing in the OECD, by the way – amount to a shocking £69bn a year, with another £10bn spent on housing benefit for those in private rent. Andy Burnham’s proposal to spend £39bn over the next decade on building more homes for social rent will only cause that number to increase.
Starting with the basics: homes let for social rent cost more to run than the typical occupant is charged for them. The average social rent home in England charges £5,942 a year, but operating and maintaining that same home costs £6,280. In London, unsurprisingly, the gap is starker, with average rents of £7,380 a year and running costs of £8,720. Each social home is therefore not an asset quietly paying for itself, but a standing liability, forever. And none of that includes the cost of actually building the homes, or buying the land the homes are built on.
But those costs, too, are pretty substantial. Burnham’s £39bn would actually mean redeploying an existing 10-year commitment. So it translates to £3.9bn a year, roughly equivalent to what Sadiq Khan’s Affordable Homes Programme had funding for. Yet that scheme only began construction on 14,335 homes in London over its lifetime, less than half of the initial 35,000-home target.
So not only is this kind of housing very expensive to build, but it also does nothing like what we need to solve the wider housing crisis. The government is committed to beginning construction on 1.5m homes by the end of this parliament. Yet calculations from the Centre for Policy Studies suggest the UK is a full 6.5m homes short of where we should be, if we had a similar ratio of homes to people as our Western European neighbours. So Burnham’s plan is to spend £39bn to create loss-making homes that may only contribute to five per cent of the housing target.
There are other costs too, this time implicit.The average social home is let out for £10,250 less than the average privately rented property – despite being on average newer, less densely occupied, and in London, larger. Multiply that saving across England’s roughly 4.2m social homes and this amounts to an implicit subsidy of £43bn a year in 2025.
Then there are the explicit housing subsidies: housing benefit and the Universal Credit Housing Element, which the UK collectively spent £36bn on in 2024/25. In fact, we spend the highest percentage of GDP on housing allowances of any OECD country, double the French rate. And as Mayor of Greater Manchester, Burnham called for the government to increase the Local Housing Allowance. If he pursues this policy as Prime Minister, it would drive these record-high subsidy figures even higher.
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Some argue that building social housing saves money, because it cuts the cost of these subsidies, as you’re no longer having to pay housing benefit to private landlords. Yet of the £32bn spent on housing allowances in England, £22bn goes to tenants in social homes. Meaning that not only are social tenants getting heavily subsidised rents – well below neighbours renting in the private sector – they are also getting some if not all of that discounted rent paid for by the taxpayer.
Together these discounts add up. A Londoner who gets the keys at 25 and stays for life benefits from a lifetime subsidy of more than £1m.
We do not have a shortage of social homes
We do not have a shortage of social homes; the UK has the fourth highest rate of social housing of any OECD country. We have a shortage of homes, full stop. What we also have is a planning system which jacks up costs and piles on uncertainty, while empowering anyone who wishes to prevent building in their local area.
As I mentioned above, the shortage is most acute in London and the South-East. Figures show housebuilding in London has fallen off a cliff, plummeting to some of the lowest levels since the Second World War. So how can we turn it around?
Together with colleagues at Onward, the Centre for Policy Studies recently published a plan to kickstart housebuilding in the capital.
First, estate regeneration is an open goal. Doubling the density of London’s low-rise post-war estates could deliver around 500,000 homes – and people overwhelmingly support it. In fact, it’s the rare housing policy that existing residents actively vote for, because they end up with newer, larger flats. At the Aberfeldy estate in Poplar, 93 per cent of residents backed a regeneration plan on a 91 per cent turnout.
Second, politicians need to take a stand against excessive environmental regulation which is too often leveraged to stop development of any kind. Biodiversity net gain (BNG) rules require any development covering more than 0.25 hectares of habitat to contribute to a minimum 10% increase in said habitats. Our report argues that applying these rules equally across the country ignores the disproportionate benefit of delivering housing in the capital relative to the marginal ecological gain, especially on small sites.
If Andy Burnham does want to flex his muscle in government, he should focus his energy on setting up two new Development Corporations covering Southern Tower Hamlets and the Old Kent Road Bakerloo line extension corridor, while giving more powers to the existing Old Oak and Park Royal Development Corporation. Development corporations are the vehicles that turned derelict docks into Canary Wharf and a rundown corner of Stratford into an Olympic legacy. We could do it again by targeting parts of London with strong transport connections and existing housing infrastructure.
In short, there should be an absolutely clear priority for the new PM: build, build, build, and most of all in London. Will he listen? Don’t hold your breath.
Emma Revell is external affairs director at the Centre for Policy Studies
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