Why UK Councils Aren’t Building the Homes We Need

Behind the social housing shortfall lies a tangled web of funding gaps, land hoarding, and political short-termism.

In Britain today, more than 1.2 million households are on social housing waiting lists. Meanwhile, council housing stock has been shrinking for decades. Despite a mounting crisis in affordability and homelessness, local authorities have failed to replace homes sold under the Right to Buy scheme or build at the scale needed. But why?

The answer, like the crisis itself, is complex. It’s not just a lack of political will or money. It’s also about land, legislation, and a system rigged for short-term profits over long-term stability.
Land

The Right to Buy, and the Wrong to Replace
Since its introduction in 1980, Right to Buy (RTB) has seen over 2 million council homes sold to tenants at significant discounts. But few of these homes have been replaced. The reason? Councils were long forced to send a large share of the sale proceeds back to central government or toward debt repayment. What little remained often wasn’t enough to fund a new build.

Even after reforms, councils still struggle to stretch RTB receipts far enough. Due to sale discounts and construction inflation, it typically takes multiple RTB sales to finance a single replacement home. This financial sleight-of-hand has resulted in a net loss of affordable housing stock year after year.

Council Homes, Built to Last, and Built Expensively
There’s another issue: council housing wasn’t cheap because it wasn’t cheaply built. Historically, it was constructed to higher standards than most private developments, larger rooms, better insulation, durable materials, and long-term design. These aren’t corner-cut builds. They’re meant to last generations.

That quality comes at a cost, one modern councils still strive to uphold. Unlike private developers who build for minimum compliance and quick profits, councils are bound by public expectations and regulation. In an era of rising construction costs and reduced grants, this makes delivering social housing even harder.

A Long-Term Investment in a Short-Term System
Council housing is inherently a long-term proposition. It takes years to deliver, and decades to recoup costs through rent. Yet, modern government thinking, especially at the national level, leans toward short-termism. Policy announcements come in flashy five-year bursts. Funding cycles don’t match housing cycles. And few elected officials are willing to plant trees under whose shade they won’t sit.

What’s worse, Treasury accounting rules often treat investment in housing as debt rather than asset-building, creating political pressure to cut or delay vital projects.

Land: The Hidden Cost Driver
Even when councils do try to build, land costs often sink their plans. As detailed in our article The Land of the Few, land ownership in the UK is opaque and increasingly concentrated. Councils compete with private developers in a market where prices are inflated not by use-value but by speculative potential.
Council budgets are increasingly stretched as they are forced to self fund post devolution, this funding crisis is explored in my article “Why Proposed PIP Cuts Could Trigger a Council Tax Crisis”

The result? Public money buys less land, and less housing gets built.

Planning Bottlenecks and Bureaucratic Hurdles
Many blame local planning departments for the lack of council builds, and not without reason. Planning can be slow, risk-averse, and bogged down by NIMBY objections. But often, councils are victims, not villains. National planning frameworks impose constraints, while community opposition and infrastructure costs can stall projects indefinitely.

The Rise of Housing Associations, and the Retreat of the State
Since the 1990s, much of the responsibility for social housing has shifted from councils to housing associations. Over time, smaller associations have been merged or bought out, leaving a handful of very large organisations to dominate the sector. While originally conceived as community-based and responsive, many have grown unwieldy and detached.

Recent scandals have exposed a worrying trend: poor responsiveness to tenant needs, long delays on essential repairs, difficulty reaching support services, and crumbling maintenance. These issues persist with little accountability. Tenants often have no choice, trapped between unaffordable private rents and large associations that behave more like corporate landlords than social stewards.

This deterioration has been allowed to continue in part because of political entanglements. Members of government, directly or indirectly involved in housing finance or development, have little incentive to challenge the status-quo. High house prices and inflated private rents benefit those with a stake in the current system, leaving tenants and communities behind.

The Political Fallout: Populism and Protest
When governments sell off homes and fail to replace them, they don’t just create a housing gap, they create a trust gap. People feel abandoned, betrayed, and angry. As explored in Reform UK’s Populist Surge and Our Democracy Under Siege, housing insecurity is fertile ground for grievance politics. Voters alienated by both Labour and Tory neglect increasingly turn to populist voices promising to “take back control.”

Where We Go from Here
Reversing the council housing crisis means breaking from the short-term logic that created it. That means:

1. Allowing councils to retain 100% of RTB receipts and use them for one-to-one replacements.
2. Exempting newly built social homes from future RTB sales.
3. Reforming land policy to reduce speculation and prioritise public interest.
4. Treating housing investment as nation-building, not debt.
5. Re-empowering councils to build at scale and to high standards.

Until we treat housing as a public good rather than a commodity, the crisis will persist. Council housing isn’t just about bricks and mortar. It’s about stability, dignity, and democracy.

Related Reading

• The Land of the Few: How Hidden Ownership and Rigged Development Drive Britain’s Housing Crisis
• Why Proposed PIP Cuts Could Trigger a Council-Tax Crisis
• Reform UK’s Populist Surge