Homelessness is the UK is at record levels with more than 1.3 million households on waiting lists for social housing, according to Shelter.
Rough sleeping has increased by 120% since 2010, and 27% since last year. According to Crisis UK, 4,118 people were sleeping rough in London from January to March 2024 (2,000 of which were doing so for the first time).
They also reveal that some local authorities (such as Eastbourne Council) are spending almost 50% of their budgets on temporary accommodation, vastly hindering their capacity to tackle other issues.
How can the UK make its way out of this seemingly impossible situation? The pressure is greater than ever to build new housing, and the demand continues to grow.
In this article, we’ll examine the role that grant making has in addressing these challenges.
Understanding the Housing Crisis
The UK housing crisis stems from several interrelated factors.
Population Growth
The UK’s population in the early 1990s was around 57.2 million. Data from the ONS states that the population of the UK mid-2022 was 67.6 million, with projections stating that it will grow have grown by 9.5 million between 2021 and 2046.
However, this is based on the assumption that net migration levels will fall to 315,000 per year by 2027, and will stay around that level during the forecast period.
Limited Housing Supply
After the extensive housebuilding that occurred in Britain after WWII, things started to slow down in the 1970s, a trend that was reflected across Europe. Social housing stock also started to reduce due to the 1961 Land Compensation Act, the Right to Buy Scheme, and other policy changes that supported private housing.
Fast-forward to today and the government are scrambling to meet building targets with limited resources. The new Labour government have pledged to build 1.5 million homes between now and 2029, or around 300,000 per year. This is similar to the former government’s targets, which they were unable to meet.
Even if Labour are successful, the demand will still outstrip supply when we consider the expected population growth. There are 1.3 million households on waiting lists for social housing right now. If the government builds 1.5 million new homes, that leaves at least 200,000 households on waiting lists, not including net migration levels of more than 315,000 per year.
Of course, not all of those 1.5 million homes will be rented at affordable rates. Even if as much as 50% are, many families on low incomes will still have limited options.
Other obstacles include planning restrictions and the lengthy process of securing development approvals. Such factors made it impossible for previous governments to meet targets, with many developers calling for reforms to the planning system.
Rising Property Prices
Property prices have soared, making homeownership unaffordable for many. Rent prices have also increased steeply, further straining the budgets of households across the country.
This situation disproportionately affects low income families, pushing them into overcrowded or substandard living conditions, or worse – being evicted and transferred to temporary accommodation.
Inflation and Labour Shortages
The construction sector has experienced substantial inflation. From 2014 to 2024, the cost of constructing new housing in the UK has risen by 46%, the sharpest increases occurring since 2020.
Compared to other forms of construction (such as industrial and commercial), public and private housing comes with the highest price and has seen the greatest increase.
Exacerbating inflation is the labour shortage. 251,500 extra workers are needed by 2028 in order to meet current demand.
The Role of Grant Funding
In times of crisis, funders need to give more grants rather than less. In terms of the housing crisis, grant funding can make an impact in several key areas.
Funding New Housing Developments
Grant funding is a vital catalyst for expanding the supply of affordable housing by supporting the construction of new homes and the refurbishment of existing properties. These resources enable developers and housing providers to undertake projects that may not be feasible without external support.
Grants can also be deployed to incentivise developers to incorporate affordable housing units within their projects, fostering a more diverse housing landscape.
Targeting Underutilised Land
Some grant programs, like the Lord Mayor Charitable Foundation’s Affordable Housing Challenge, specifically target underutilised land for affordable housing development.
Identifying and assessing the feasibility of these sites is a key challenge for funders, which is why grants are available specifically for feasibility purposes. The other types of grants on offer are pre-development recoverable grants and capital works grants.
Community-Led Housing
Community-led housing initiatives can benefit significantly from grant funding. These projects are typically developed and managed by the community, ensuring that housing meets local needs and priorities. Grants can help cover the costs of planning, development, and construction.
Hyde Housing is dedicated to supporting community-led initiatives that empower local residents to take control of housing solutions. By collaborating with communities, Hyde Housing helps to identify specific housing needs and priorities, enabling residents to play an active role in shaping their environments. Their approach focuses on creating affordable homes and fostering community resilience.
An inspiring example of a successful community initiative is Hyde’s collaboration with local residents in various housing projects across London and the South East. Through their strategic partnerships, they aim to regenerate areas and create vibrant communities that reflect the aspirations of their inhabitants.
By providing access to funding and resources, Hyde Housing facilitates the development of homes that not only meet immediate housing needs but also promote long-term community sustainability. Their commitment to community engagement and support helps ensure that housing solutions are not only effective but also equitable.
Grant Funding for Sustainability Initiatives
Grants can support housing development projects through assisting with infrastructure. For example, the UK government has set up a range of sustainability-focused grants, which social and private housing providers can apply for.
The electric vehicle charge point grant is one example, whereby funds support the installation of charge points on premises that already have the supporting infrastructure. Grants cover 75% of the cost of socket installation – or £350 – whichever is lower.
Sites that don’t already have the infrastructure can apply for EV infrastructure grants which cover £30,000 or 75% of the cost of installation (whichever is lower).
Supporting Homelessness Services
Grant funding is essential for organisations providing services to homeless individuals and families, including shelters, transitional housing programmes, and support services like counselling and job training.
The Centre for Homelessness Impact works to end homelessness by promoting evidence-led strategies. They assist organisations in harnessing data to maximise their impact and ensure their resources are effectively allocated. Through their initiatives, they facilitate access to comprehensive knowledge that helps stakeholders understand the complexities of homelessness and implement solutions that are effective and sustainable.
They also support various funding opportunities for research aimed at better understanding and addressing homelessness. Their commitment to integrating data and insights into service delivery is vital for organisations striving to make a meaningful difference in the lives of those experiencing homelessness.
Success Story: Homes for Cathy Alliance
A notable example of success is the Homes for Cathy alliance, which brings together 120 homelessness organisations and housing associations across the UK to tackle homelessness. Their members own and manage more than 1.5 million homes.
The alliance has developed nine homelessness commitments in collaboration with Crisis, which guide and benchmark best practice within member organisations. These commitments focus on areas such as flexible allocations, tenancy support, and working with people with lived experience.
The alliance has implemented several successful initiatives, including:
- Building and renovating housing: Homes for Cathy has supported the development of affordable housing units and supported the renovation of existing properties to provide safe and secure homes for individuals and families experiencing homelessness. (The alliance itself does not fund these initiatives; member organisations are supported through government grants and other funding sources.)
- Community engagement: The alliance engages with local communities to understand their needs and develop housing solutions that are tailored to those needs. This community-led approach ensures that housing projects are sustainable and have a positive impact on the local area.
- Knowledge sharing: The alliance holds an annual conference, helping members to share knowledge on various topics such as reducing evictions, and maintaining flexible eligibility policies.
Challenges in Funding Housing Projects
Navigating Complex Regulations
Grant managers must navigate a complex landscape of regulations and compliance requirements. Ensuring that funded projects adhere to these regulations is essential to avoid legal issues and ensure the successful implementation of housing initiatives.
Grant managers must establish robust monitoring and evaluation processes to ensure that funds are used effectively and that projects achieve their intended outcomes.
Balancing Stakeholder Interests
Housing projects involve a wide range of stakeholders, from government agencies to investors to future residents. Balancing their varied and sometimes conflicting interests while adhering to regulations is a constant challenge.
Measuring Impact
Evaluating the impact of grant funding in housing development is a fundamental aspect of ensuring that resources are effectively transforming communities. Developing robust evaluation frameworks tailored to housing projects is crucial for capturing the outcomes of these initiatives.
This includes assessing not only the number of affordable units created but also the broader social benefits, such as improved community cohesion, enhanced quality of life for residents, and reductions in homelessness rates.
Effective impact measurement goes beyond statistics; it involves engaging with residents and stakeholders to gather qualitative insights that reveal the true effects of housing initiatives. For instance, understanding how new developments influence local employment opportunities or access to essential services can provide a more comprehensive picture of success.
How Does Grant Management Software Support Housing Projects?
Grant management software plays a pivotal role in enhancing the effectiveness of housing projects by streamlining processes throughout the grant lifecycle.
One of the primary benefits of such software is its ability to streamline the monitoring of reporting obligations, helping organisations adhere to the sector’s complex regulations, thus minimising the risk of non-compliance that could jeopardise projects.
Grant management systems such as Flexigrant also provide robust tools for measuring impact, with data visualisations for clarity and quick reference. It also has a built-in CRM system, enhancing communication among numerous stakeholders.
Conclusion
Grant funding plays a crucial role in addressing the UK’s housing crisis. It’s unclear whether the government’s housebuilding targets are feasible due to inflation and other factors, so additional funds will be necessary.
Funding is typically directed towards housebuilding and renovation, as well as supporting homelessness services, and empowering communities.
Tools such as funding management software enables grant managers to enhance their efficiency and effectiveness. These tools streamline the grant management process throughout the grant lifecycle, making it easier to track progress, measure impact, and ensure accountability.
Flexigrant is trusted by more than 500 organisations including charities and local authorities. To learn more about how it can help you, contact us today to request a demo.
