Nottingham City Council is reviewing how social housing is delivered across the city as demand continues to outstrip supply and the loss of council homes through the Right to Buy scheme continues to affect available stock.
A report ahead of the council’s Homes, Economy and Infrastructure Scrutiny Committee on 16 March examines the current position for social and affordable housing in Nottingham and outlines the challenges the authority faces in meeting demand.
Social housing and affordable housing are umbrella terms used to describe homes that are provided below market value either for rent or purchase. These include properties let at social rent, homes offered at affordable rent of at least 20 per cent below market levels, discounted market sale properties and other low-cost home ownership schemes such as shared ownership or rent-to-buy. Council housing is a form of social housing rented to households who cannot afford housing on the open market.
Nottingham currently has around 140,089 dwellings. Approximately 43 per cent are owner-occupied, 33 per cent are privately rented and about 25 per cent are social housing. Over recent decades the balance has shifted, with social housing declining while the private rented sector has grown.
According to national planning policy calculations, Nottingham needs to deliver around 27,000 new homes by 2041 – roughly 1,400 homes each year. While the city has exceeded housing delivery targets in recent years, around half of that supply has come from purpose-built student accommodation. The student housing market is now changing and levels of new student development are expected to fall, while wider housing demand is also being affected by the cost of living, mortgage availability and rising construction costs.
The report also highlights structural challenges to housing development in Nottingham. Much of the city’s land supply is made up of brownfield sites which often require remediation and involve higher build costs. At the same time, property values in the city are generally lower than in surrounding districts, meaning many developments operate on tighter viability margins.
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Demand for affordable housing in Nottingham is particularly high due to a combination of relatively low wages, high deprivation levels and rising private rents. A 2024 needs assessment estimated the city would require around 921 new affordable homes for rent each year to meet demand, although the report notes this level of delivery is unlikely to be achievable in practice.
A major factor affecting supply has been the long-running Right to Buy policy, which allows council tenants to purchase their homes at a discount. Since the scheme was introduced in 1980, more than 25,000 council homes in Nottingham have been sold, reducing the city’s council housing stock to around 24,283 homes by 2025. Replacement homes have not been delivered at the same pace, partly because the proceeds from sales are often insufficient to fund new construction.
The number of Right to Buy sales has varied depending on the level of discount available. Between 2012 and 2024 tenants who had lived in their homes for three or more years could receive discounts of between 35 and 70 per cent, capped nationally at £75,000, resulting in around 3,500 additional sales in Nottingham during that period. The rules changed in December 2024, reducing the maximum discount in the East Midlands to £24,000. The report notes that this change is expected to significantly reduce future applications, although a surge in applications occurred before the new rules took effect.
Despite these pressures, the council and its housing association partners are continuing to deliver new homes. The council’s “Homes Fit for the Future” housing strategy for 2024–28 sets a target of delivering 350 additional council homes and supporting partners to deliver a further 400 social or affordable homes, creating 750 homes in total. Current activity suggests the combined delivery from the council and registered providers could reach around 1,000 homes by April 2027.
Funding for new homes has increasingly relied on receipts generated through the Right to Buy replacement fund, particularly after borrowing through the council’s Housing Revenue Account became restricted following the authority’s Section 114 financial notice. Around £39.3 million of replacement receipts are currently allocated to six schemes expected to deliver approximately 210 affordable homes, alongside a programme of property acquisitions.
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Additional homes are also being developed by housing associations operating in the city. Registered provider partners currently have nearly 700 affordable homes at various stages of delivery, including schemes of more than 100 homes at Henry Mellish and Piccadilly and at Arnside Road led by Nottingham Community Housing Association.
Planning policy also requires developers to contribute affordable housing as part of larger residential schemes. The council normally seeks 10 per cent affordable housing on sites of 10 to 14 homes and 20 per cent on developments of 15 homes or more, although viability challenges mean these requirements are often negotiated and on-site delivery remains limited.
The report also highlights the importance of partnership working across the wider housing market area. Nottingham has long collaborated with neighbouring authorities such as Broxtowe and Gedling through aligned local plans and strategic planning partnerships to coordinate housing growth, infrastructure and transport across Greater Nottingham.
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Future housing delivery will also be influenced by planned Local Government Reorganisation in Nottinghamshire over the next three years, which is expected to create a new authority covering a wider geography. This could provide access to additional public land for housing development but will also require new housing targets and fresh assessments of affordable housing need across the expanded area.
Members of the scrutiny committee will consider the report and may make recommendations on how the council and its partners can strengthen delivery of social housing in Nottingham.
