The slow demise of social rented housing

The latest affordable housing figures show that numbers of new social rented homes have fallen by half. The year before, they’d fallen by more than half. So whereas for the three years up to 2011/12 we were producing around 34,000 new homes for social renting each year, now it’s less than 8,000.

It’s not as if this is a temporary lull. From 2015, there’ll be virtually no social rented output funded by the Homes and Communities Agency, so although local authorities will continue to build and let at social rents from their own resources, we can expect a further sharp fall in output. Furthermore, any recycled receipts from right to buy sales can only be used to build homes at higher, Affordable Rents (not social rents).

Despite these obstacles, councils recently said that they want to produce half their new build for letting at social rents, and that overall local authority output will rise to about 5,000 new units per year. But even if it does, it looks like total production of homes at social rents will fall by a further 50% and perhaps more.

This matters, because (as Red Brick readers know only too well) Affordable Rents are getting very close to market levels. The picture is shown in this year’s UK Housing Review. Affordable Rents for new build properties run at nearly 80% outside London and at 69% in London (but go up to 80% in some Boroughs). Overall, in 2012/13 there were some 27,000 lettings by associations at Affordable Rents, and on average the ‘premium’ on social rents is a startling 55%.

Even more important than the statistics on new build are those on the overall stock of housing let at social rents. Nick Raynsford MP has been doing some digging on this issue, but what this has mainly revealed is that the data are incomplete and confusing. Accurate and comparable data only seem to be available for the two years 2011/12 and 2012/13. These show that councils had a net loss of 11,769 social rented units in the year ending April 2013, while housing associations lost 3,278. By that date, associations owned almost 40,000 homes let at Affordable Rents and councils owned just over 1,000. We know that the current Affordable Homes Programme (that ends in March next year) is based on converting about 75,000 existing homes to Affordable Rents over the life of the programme: this undoubtedly explains some of the loss of social rented stock even though the AHP had (in April 2013) still two years to run.

The loss of around 15,000 social rented homes in one year may seem a small amount – given that the total social housing stock was still 4.2 million. But it’s the beginning of a worrying trend, given that almost all new build effort is going into producing homes that are more expensive than social rented ones (whether for rent or sale), and the existing stock is being eaten away by conversions, demolitions and sales (including, of course, the accelerating right to buy). With right to buy sales now running at 11,000 per year and rising, it’s a safe bet that the net loss of social rented homes in the year to April 2014 will turn out to be much greater than the year before, and that by April 2015 the loss will be bigger still.

Postscript (25 June 2014): Although the statistics are far from clear, a different calculation of the loss of social rented homes in the housing association stock in the year to April 2013 suggests a bigger figure than is shown in my original post. Using the stock losses and gains reported in section 5 of the HCA’s Statistical Data Return 2012/13, and deducting stock now let at Affordable Rents (section 3), the loss would be 23,025. Added to the fall in council housing numbers noted above, the total loss of social rented stock in the year ending April 2013 rises to almost 35,000, or about 20,000 more than in my original calculation.

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5 Responses to The slow demise of social rented housing

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  4. Adam says:

    When I look at table 1006, it shows figures typically between 25-35,000 new “social rent” dwellings. 2012-13 shows 18,000 but has a (*) next to it which doesn’t seem to be explained.

    Where are your figures from?

    • monimbo99 says:

      The figures on new completions are based on DCLG live table 1012; the figures on the total stock are my calculations from recent local authority (LAHS) and registered provider returns.

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