Overview of the Policy Paper
The document “Affordable living” is a policy paper published by the Social Market Foundation (SMF) in April 2024. SMF is an independent charity and research organisation that commissions expert analysis on economic and social issues to stimulate public debate. The paper is authored by Niamh O Regan, a senior SMF researcher with a background in intelligence, international security and politics, and Jamie Gollings, SMF’s Deputy Research Director, previously a journalist and strategy consultant. The paper examines alternative housing models, especially co‑operative housing, and assesses their potential to reduce costs and increase affordability across Europe and the United Kingdom.
Core Findings on Housing Costs
The authors highlight that Austria’s co‑operative housing model cuts costs by 14 % compared with conventional private renting, while the UK still faces a waiting list of 1.2 million families for social housing – roughly 4 % of England’s population and a quarter of the existing social housing stock. Social housing currently provides 17 % of UK households, a share higher than most OECD nations but still far below Austria, the Netherlands and Denmark. Private rental costs have risen from 7 % to over 25 % of household incomes since the 1980s, driving increased reliance on housing benefits, which now represent 1‑1.4 % of UK GDP.
Funding Mechanisms and Revolving Funds
The paper stresses the importance of long‑term, guaranteed capital funding. Austria’s model finances social housing through a dedicated housing contribution from taxes, while the Netherlands and Denmark use revolving funds that reinvest surplus rental income into new construction. SMF estimates that a sustainable revolving‑fund approach could generate billions of pounds of additional housing without further public capital. The UK currently spends about £14 billion annually on housing benefits, but social housing capital investment needs exceed £14 billion per year for the next decade to close the supply gap.
Comparative Co‑operative Housing Share
Co‑operative housing accounts for only 0.2 % of the UK housing stock, compared with 0.6 % in Canada, 0.3 % in Ireland, and up to 23 % in Sweden. Across Scandinavia, co‑operatives represent an average of 14.5 % of dwellings, while central Europe averages 8.7 %. Co‑operatives typically charge rents two‑thirds of private rents and report higher tenant satisfaction (88 % in the UK versus 77 % for council or association tenants).
Policy Recommendations for the UK
SMF proposes several actions: (1) adopt a national revolving‑fund model similar to the Dutch system; (2) end or tighten Right‑to‑Buy to protect existing stock; (3) mandate a minimum of 20 % social housing in every new development; (4) introduce pattern‑book designs for faster planning approval; (5) create a state‑backed Co‑operative Housing Lender and reinstate the Community Housing Fund to provide revenue‑grant support; (6) build a national database of state‑controlled land suitable for housing; and (7) increase public awareness of co‑operative rights and models.
Sustainability and Community Benefits
The authors argue that co‑operative housing delivers environmental benefits through shared resources, lower construction costs via modular and prefabricated methods, and longer‑term durability. Socially, co‑operatives foster community cohesion, higher wellbeing, and skill development for residents. Case studies from Austria, Denmark, the Netherlands and the UK illustrate how mixed‑income co‑operatives can reduce carbon footprints while delivering secure, affordable tenure.
Outlook for Pan‑European Adoption
SMF concludes that while co‑operative housing will remain a modest share of overall stock, it offers a viable “third way” between private renting and homeownership, especially for lower‑ and middle‑income households. Scaling up co‑operatives, supported by stable funding, streamlined planning and legal recognition, could help European nations meet housing‑affordability targets while advancing sustainability goals.