Andy Burnham's £39 billion plan to build council houses at a scale not seen since World War 2 has been heavily criticised by a new report. The Centre for Policy Studies (CPS) says the plan would deliver only between 14,335 and 15,494 homes per year over a decade, which is just 5% of the government's annual housing target for England.
Report Highlights Economic Flaws
The CPS report, released on Monday, July 6, argues that Burnham does not understand the economics of social housing. Ben Hopkinson, CPS Head of Housing and Infrastructure, stated: "Many Brits rightly value our social housing stock, but few people understand the economics underpinning it. It seems our next prime minister isn’t one of them."
Building Costs and Rent Shortfalls
The report calculates that building an average three-bed semi-detached house costs around £251,700. With an annual budget of £3.9 billion, only about 15,494 homes could be built each year. Furthermore, social rent homes would not cover their costs: the average annual rent is £5,942, while maintenance and management costs £6,280 per year.
Existing Subsidies Already High
The CPS notes that the UK already spends the highest percentage of GDP on housing allowances among OECD countries. In 2024/25, the UK spent £36 billion on housing benefit and Universal Credit Housing Element, with England accounting for £32 billion. The report warns that Burnham's plan to increase Local Housing Allowance would drive subsidies even higher.
Implicit Subsidies Add to Burden
The report also highlights that social homes are let out for £10,250 less per year than private rentals. Across England's 4.2 million social homes, this amounts to an implicit subsidy of £43 billion annually. Combined with explicit subsidies, public housing costs the country £79 billion a year in England alone.
Call for More Housebuilding
Hopkinson added: "Subsidising rents for some on the taxpayer’s dime while refusing to tackle the broader lack of housing for all tenures suggests Andy Burnham is going to be yet another Prime Minister driven by ideology, not what actually works. The only way to get housing costs down across the board is to build more homes – we are 6.5 million short of where we should be and Burnham’s plans are at best a distraction and at worst a barrier to achieving the level of housebuilding we need."
Burnham's representatives have been contacted for comment.
