Andy Burnham’s pledge to invest £39bn in new social housing could deliver only a fraction of the homes needed while increasing the long-term cost to taxpayers, according to a report published by the Centre for Policy Studies (CPS).
In England’s £79bn Housing Subsidy, CPS head of housing and infrastructure Ben Hopkinson argues that the proposed investment of £3.9bn a year over a decade may fund the construction of only 14,335 to 15,494 homes annually – equivalent to 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. It also points to the performance of the Sadiq Khan’s Affordable Homes Programme, which began construction on 14,335 homes with a similar level of annual funding.
The CPS argues that social housing requires significant ongoing public subsidy beyond the initial construction costs. It says average social rents in England are lower than the annual cost of managing and maintaining properties, meaning landlords rely on continued taxpayer support. According to the report, 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 with annual costs of £8,720.
The report also highlights the scale of wider housing support. It says £32bn was spent on housing benefit and the housing element of Universal Credit in England during 2024/25, adding that the UK spends a higher proportion of GDP on housing allowances than any other OECD country.
Finally, the CPS 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, it calculates this represents an implicit annual subsidy of around £43bn.
Combining direct housing support with the estimated value of below-market rents, the report 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.
CPS head of housing and infrastructure and report author Ben Hopkinson said: “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.
“The cost of building social housing, like all housing, has been driven up by regulation, construction costs and an unruly planning system. 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.”
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