- As he prepares to enter Downing Street, Andy Burnham has pledged to oversee ‘the biggest council house building programme since the post-war period
- £39bn is earmarked over the next decade for the construction of subsidised housing for social rent in England – £3.9 billion per year – despite the UK already having the fourth highest percentage of social rented dwellings in the OECD at 16.4%, double the EU average of 8%
- The average-sized, three-bedroom semi-detached house costs around £251,700 to build. On that basis, Burnham’s £3.9bn per year would deliver 15,494 homes – just 5% of the government’s annual housing target for England
- Once built, the average social rent home in England – the kind Burnham has pledged – charges a rent of £5,942 a year and costs £6,280 a year in maintenance and management costs. In London the respective figures are £7,380 and £8,720. This means that social rent homes do not cover their ongoing expenses and will never begin to pay off the large initial taxpayer sum spent on building them in the first place
- On top of subsidising construction, the government explicitly subsidises housing in England by awarding £32bn in housing benefit and Universal Credit housing allowance – £22bn of which goes to cover the rents of those in social housing and therefore already benefitting from lower rents
- The UK spends the most on housing allowances as a percentage of GDP of any OECD country and Andy Burnham has previously called for this subsidy to increase.
- The average English social home is let out for £10,250 less than the average privately rented property. Across England’s roughly 4.2 million social homes, this amounts to an implicit subsidy of £43 billion a year in 2025
- A London tenant who receives their social home at age 25 and lives to the average UK life expectancy of 81, receives a lifetime subsidy of over £1,000,000
Andy Burnham’s commitment to spending £39bn on new social housing will add to the taxpayer’s burden and may only deliver between 14,335 and 15,494 homes per year, according to new research published today by the Centre for Policy Studies.
‘England’s £79 Billion Housing Subsidy’ by CPS Head of Housing and Infrastructure Ben Hopkinson breaks down the cost of building and maintaining England’s social housing stock, as well as highlighting the astonishing difference between social and private rent – for which the taxpayer pays the price.
Hopkinson argues that the £39bn over ten years pledged by Andy Burnham may deliver only 5% of the government’s annual housing target. The Housing Forum recently estimated that given construction prices and housing regulations, the cost of building an average-sized, three-bedroom, semi-detached house now comes to £251,700, even if the land is provided for free. This would imply that Burnham’s £3.9 billion per year will cover just 15,494 houses. However, the numbers could in fact be even lower. In London, where the need for new homes is greatest, Sadiq Khan’s Affordable Homes Programme only began construction on 14,335 homes with a similar amount of funding.
The report highlights how social housing is both explicitly and implicitly subsidised further by the taxpayer in a variety of ways.
First, social homes are let out at a cost below what it costs to maintain them, meaning the taxpayer is continually forced to plug the gap and the upfront cost of building is never repaid.
The average English social rent home charges £5,942 a year but costs £6,280 a year in maintenance and management costs, creating a small ongoing liability. In London, the average social rent home has a rent of £7,380 a year but costs £8,720 a year to maintain. That means that each London social rent home will never recover the initial capital investment, instead creating an ongoing liability of £1,340 a year.
Second, in 2024/25, the UK spent £36 billion on housing benefit and the Universal Credit Housing Element. England accounted for £32 billion of this housing subsidy. The UK already spends the highest percentage of GDP on housing allowances of any OECD country, double the French rate. 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.
Third, 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. Across England’s roughly 4.2 million social homes, this amounts to an implicit subsidy of £43 billion a year in 2025.
Once you add together the explicit and implicit subsidies for public housing, it is costing the country an astonishing £79 billion a year in England alone.
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.’
ENDS
NOTES TO EDITORS
- Ben Hopkinson is Head of Housing and Infrastructure at the Centre for Policy Studies
- ‘England’s £79 Billion Housing Subsidy’ is available here
- For more information or interview requests, please contact Emma Revell on emma@cps.org.uk or 07931 698246.
- The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, housing, immigration, and energy abundance, its goal is to develop policies that widen enterprise, ownership and opportunity
Date Added: Monday 6th July 2026
