A shortage of social and affordable housing is trapping lower income families in poverty and placing growing strain on local authorities, according to a new report backed by Family Building Society.
The study, authored by Professor Christine Whitehead of the London School of Economics and Kelvin MacDonald of the University of Cambridge, argues that private rents are now too high for many lower income households, contributing to rising homelessness and worsening health and wellbeing outcomes.
The report, sponsored by Family Building Society, concludes that house prices and rents continue to outpace earnings, creating what it describes as an acute shortage of affordable housing across much of the country, particularly in London and the South East.
It questions whether the government’s target of 1.5 million homes can realistically be delivered, suggesting that policy is too heavily concentrated on new build.
This focus, it says, has influenced local authority land use planning and building objectives, while doing little to address wider structural constraints.
“This concentration on new-build and, in particular, on the operation of the planning system is a key factor affecting the supply of housing with, for example, increasingly long timescales from application to decision,” the report states.
PRESSURE ON SUPPLY AND DELIVERY
The authors highlight a series of constraints affecting delivery, including the capacity and business models of the housebuilding sector, the volume of unimplemented planning permissions and a lack of resources within local authority planning teams.
They also cite a skills gap in both the construction industry and public sector planning.
The financial position of housing associations is identified as another limiting factor. A number of sites are said to be stalled because developers have yet to secure contracts with registered providers for the affordable housing component of schemes.
In some parts of England, concerns over financial viability are further slowing progress.
The report notes that these structural pressures sit alongside growing fiscal strain on local authorities, which are facing significant costs in meeting their statutory duties to house homeless households.
As spending on temporary accommodation rises, councils are finding it increasingly difficult to fund non-statutory services. The authors warn that the impact is being felt well beyond the housing sector.
“At the limit, the problem is not simply affordability but actually ensuring a roof over peoples’ heads,” the report says.
AFFORDABILITY AND MARKET DISTORTION
The study argues that housing affordability is widely recognised as one of the most pressing issues facing households, particularly those with limited resources or previous housing difficulties. However, it cautions against over-simplifying the concept.
“The major issue in understanding affordability is that no dwelling is exactly like any other. Dwellings differ in terms of types, age, number and size of rooms, availability of outside space and location. No dwelling is exactly like another and value is difficult to assess.
“Rising house prices, for example, have different effects on different groups as well as different attributes between dwellings.”
The authors argue that rising values can benefit some existing owners while further excluding those seeking to enter or move within the housing market. In high-demand regions, particularly London and the South East, the divergence between earnings and housing costs is described as especially pronounced.
The report also references an earlier study published in July 2025, which was likewise sponsored by Family Building Society. That paper proposed what were described as three “quick fixes” to ease pressures in the housing system: scrapping stamp duty for older people, taxing short lets and second homes, and treating private landlords as normal profit-making organisations.
None of those proposals were adopted.
For property professionals, the latest findings underscore the scale of the structural imbalance between supply, affordability and delivery capacity.
While policy continues to prioritise headline new build targets, the report suggests that without broader reform across planning, funding and tenure models, affordability pressures are likely to persist.
