‘Affordable rent’: worst predictions come true

Following a Freedom of Information request, in October last year Red Brick revealed that 82,000 social rented homes were likely to be ‘converted’ to the much more expensive ‘affordable rent’ regime in a desperate attempt to fund the Government’s flagship programme.

A new independent report on the affordable rent programme by Future of London shows that, at December 2012, there were 543 lettings of new build affordable rent homes in the Capital but 2,571 conversions from traditional social rent – nearly 5 conversions for every single new build home so far. It effectively means that these homes have had an imposed rent increase of 40-50%.

Because the Government stipulated that ‘affordable rent’ homes should be let on the same basis as ‘social rent’, the inevitable has happened: new tenants are even more reliant on housing benefit. Not only have social rented homes been hijacked but also the pain will be felt through increased housing benefit payments for many years to come. While Labour is busy developing policies to turn ‘benefits into bricks’, the Tories and LibDems are busy making the system ever more reliant on benefits.

The report shows that the ‘affordable rent’ homes are being let to tenants who are ‘on average, in greater poverty than existing social tenants’. This is in total contradiction to the many words of wisdom uttered by Iain Duncan Smith about ending benefit dependency and ‘making work pay’.

In London, ‘affordable rent’ is the figleaf behind which Boris Johnson hides his housing policy. It seems likely, says the report, that the programme will deliver its aim of 16,000 homes, although the chances of this being achieved by 2015 as planned seem slim given that the programme is very heavily backloaded, with most homes being built in the final year.

The housing programme is not just about numbers, it matters what is being built and for whom, and at what cost. The ‘affordable rent’ programme is using up housing associations’ borrowing capacity, stretching their financial covenants, increasing risk, using up available land, creating an expensive product and undermining a cheaper model, and raising the benefit bill whilst intensifying the effect of poverty.

The report argues for changes post-2015, with effectively 2 different products: a higher rent, but still sub-market, regime for people in work as an alternative to private renting, and a programme delivering homes at social rent levels. This would take us back to the Livingstone London Plan regime which separately identified ‘social’ housing and ‘intermediate’ housing. Reinventing the wheel is sometimes the best thing to do.

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6 Responses to ‘Affordable rent’: worst predictions come true

  1. Pingback: Selling the family silver | Red Brick

  2. mat says:

    I am one of those, I have been lucky to be given a Housing association home, but the rents are too high. I have two options find somewhere cheaper or stop working, I know which one I’ll do, and hope at the next election a new party will win to change these policies.

  3. Pingback: Fiscal folly | Street Democracy - where it should reach

  4. Edward says:

    I am very worried about people being offered “Affordable Rent” properties. I am a social housing tenant and some of my friends who are being rehoused are being offered the much higher rent. Everyone is very frightened. “Affordable rent” flats are being let out on the same needs-based criteria as the old social rent flats – but if you are high up on the needs-based system you often cannot manage the higher rent or it puts you in a benefits trap even harder to escape. It simply doesn’t make sense. We desperately need good quality social rent homes at a low social rent. A stable low rent is one of the few things that gives me hope that I may overcome illness and live a life.

  5. Mr Parker says:

    The picture painted of housing issues in London seems to be pretty dire on many fronts. This is an important aspect. London is not England however. Affordable Rent was touted by Schapps as a “one size fits all” panacea for the whole country. Its impact varies widely and this must surely be an area where independent study is warranted.

    Here in the South West we have converted greater numbers than we expected because the yield per property has been low. Differences of less than £5 per week between social and affordable rents have forced a rethinkin our approach. Whayt is the picture in the North?

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