Social housing: future, what future?

The government may have begun by slowly boiling the frog of social housing, but it now seems poised to hurl our metaphorical amphibian into a pressure cooker.

Inside Housing reports that the government is preparing to regulate to prevent social landlords offering lifetime tenancies. This follows a little discussed pledge in the summer budget to review the use of lifetime tenancies to ensure “the best use is made of the social housing stock”.  This would mean that new tenants could only be offered a home for a period of five years or so – after which time they will presumably be expected to house themselves in the market elsewhere.

This issue alone could easily merit several blogs about the practical rights and wrongs. But analysing it in isolation would obscure the totality of what is happening to social housing: piece by piece the government is overhauling social housing as we know it.

What will social housing offer?

In many respects the government is refashioning social housing as an ambulance service for those in the greatest need. Very short-term tenancies make sense if stock is limited and you want to regularly check that it is only housing those who genuinely need it most urgently – the budget explicitly made this argument.

There also seems to be an implicit and less charitable view in some quarters that, if social housing is an emergency safety net, life shouldn’t be too comfortable.

Imposing fixed term tenancies could also cynically be seen as a further attempt to ensure that the positive features of social housing – first affordability, now security – are diluted to the point where the tenure becomes too diminished to be worth defending. The affordable council home for life eventually becoming a folk memory, along with outdoor loos and milk delivered to your doorstep.

In this vision of the future, security becomes a reward only for those with the resources to own their own home. The government is literally throwing money at social tenants to buy their home and therefore their future ‘security’ (though this promise may ring hollow for anyone who has looked at the repossession figures for right to buy households). If they choose not to do so then they must sacrifice security, and risk losing their tenancy in five years. Anyone with the means to buy but who is wavering will be nudged towards a mortgage lender by Pay to Stay, which will impose higher rents on households earning £30,000 (£40,000 in London).

A temporary safety net for cases of urgent need may not be what most people think social housing should be for – but it could at least be a coherent vision to direct government policy toward. But in fact there are major inconsistencies that suggest the truth is more confused than this. The National Housing Federation’s voluntary deal on right to buy demanded greater freedom over allocations. This means that housing associations wouldn’t have to house those judged to be a priority by the local authority and could instead pick and choose their tenants.

And the coalition government’s reforms also allowed local authorities to move away from prioritising households in the greatest need for social housing. Councils were given the power to reward working households in their allocation policies and to forcibly rehouse homeless families in the private rented sector, breaking the link between the most severe housing need and access to social housing.

Funding reforms and cuts to housing benefit have also undermined the affordability of social housing. Rents are increasingly charged at up to 80% of market rents, while the bedroom tax and benefit cap mean housing benefit no longer provides a safety net for people who struggle to afford such high costs.

Combined it’s hard to argue that these are the consistent actions of a government that sees social housing as a short term safety net. Which in a perverse way is a relief, given that they don’t seem to be planning to build any….

So what is the future for social housing?

It is looking increasingly unlikely that central government grant funding will be available for a low cost rented product come the Comprehensive Spending Review. Grant was already cut by 60% in 2010, necessitating the introduction of Affordable Rent at 80% of market rents. It distorted the term “affordable” but at least provided a rental product accessible to people in housing need and unable to qualify for a mortgage. Instead expect to see grant shifted towards shared ownership.

The looming loss of section 106 funding has been well documented. Section 106 agreements require developers to provide affordable housing as part of any development above a certain size and provide a much needed supply of new social rent homes. The prime minister has already announced that funding should be switched to deliver the government’s starter homes. These will be homes to own, sold at 80% of market values and therefore inaccessible for all but higher earners. Councils won’t be able to hold out for rented homes, even if their housing need assessments make clear this is what is needed locally.

Housing associations will also be able to replace rented homes sold under Right to Buy with shared ownership or starter homers. And this will be funded by the forced sale of higher value council homes on the open market, taking stock away from areas with the greatest housing pressures.

Combined, Shelter estimates that these three policies alone will lead to the loss of 180,000 low rent homes that otherwise would have been built.

But the effects could go further. Councils may be reluctant to build new council homes which could become liable for a forced sale, or lost to Right to Buy anyway. And councils who do want to build are still restricted by the borrowing cap.

Both councils and housing associations have been affected by the surprise 1% cut to social rent for each of the next four years. A boon to tenants, it nevertheless reverses a ten year deal landlords had struck with the government just a year before. As a result, one in three housing associations expect to stop building sub market rent.

Taken together it’s hard to conclude that the government does see a future role for social housing. Residual stock will remain but the private rented sector will be called on even more than now to house those in the greatest need. This perhaps explains the long overdue moves in the housing bill to tackle the worst conditions. It doesn’t explain the decision to cut housing benefit for private renters even further. The subsidy once directed into social housing and the security it offered will instead be available only for those who have the resources to own. For the rest, long-term insecurity and perilous affordability is the best the government can offer.

One Comment
  1. Very good piece.

    However keep a closer eye on pay MORE to stay as it is a household income threshold which is not the same as ‘earned income’ and both terms of “household” and “income” are yet to be defined.

    “household” may NOT necessarily mean the same as it does in its normal usage of “benefit unit” to mean tenant and partner only and could include wage income of an adult child or the benefit income such as DLA of a disabled child.

    The impact assessment on the Housing & Planning Bill released this week illustrated pay MORE to stay by using both of these inclusions

    “income” – the consultation paper on pay MORE to stay used “taxable income” that would exclude most benefits yet the Bill itself and the impact assessment both had NO mention of taxable income and merely used income.

    Very crudely if the terms household and income are so loose as to encompass the elements above then this could hit over 450,000 social tenant households as opposed to normal usage of just tenant and/or partner and taxable income that would see about 180,000 households hit – so the impact on the frogs in social household would be far more dramatic if the definitions are loosely applied

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