Welsh government only halfway to its 20,000 low-carbon social homes target, watchdog finds

The Welsh government has built fewer than 10,000 new homes three years into its five-year plan to construct 20,000 social homes, according to a new Audit Wales report.

Government estimates indicate that as of March 2024, between 8,859 and 9,197 homes have been completed. The target is to deliver 20,000 low-carbon social homes for rent by March 2026.

The report highlighted that only half of the target has been met as delivery has been “more slow and expensive than initially expected, partly due to pressures outside of the Welsh government’s control”.

Audit Wales also warned that to meet the 2026 deadline, the government will need to spend significantly more than originally planned.

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In 2021, the Welsh government estimated it would spend around £1.6bn on core capital projects to meet its housing target.

By the end of March 2024, the government had spent £1.1 billion on schemes that contribute to the target.

The government has estimated a budget of £330m for the social housing grant for the current period. Although no budget has been set for 2025-26, officials are planning with a notional budget of £300m.

The report estimated that the government will need between £580 and £740m extra on top of its estimate of £1.8bn for the target to be hit.

The government has tried to offset slow progress in building new homes with an increased focus on acquiring existing properties.

However, the report notes that the 19,913 homes delivered or in the pipeline for delivery by March 2026 fall just short of the target.

Matt Dicks, national director of CIH Cymru, said: “The report by Audit Wales highlights the funding gap to ensure we can meet the 20,000 new homes target.

Dicks said CIH Cymru agrees that more investment is needed to deliver the homes, but stated that “we also need to provide more resources to planning departments, tackle issues within our supply chains and ensure we have enough contractors to carry out the work.”

He added: “We need a whole system approach to meeting the target and now is the time to be ambitious and radical by making housing a foundational mission for government, by legislating for the incorporation of the right to adequate housing into Welsh laws.

“This right will not only provide a route map to a safe, sustainable, and affordable home for the people of Wales it will act as a catalyst to increasing the pace and scale of development of social homes.

“Enshrining the right to adequate housing can only benefit Wales and help deliver an equitable Wales. A Wales where everyone can access a safe, affordable, and sustainable home.”