Selling the family silver

One of the key themes on Red Brick over the years has been the importance not only of building more social rented housing but of protecting the stock we already have.

Evidence to be published in the upcoming 2015 UK Housing Review published by the Chartered Institute of Housing shows just how much stock is being lost.

Previewed on the CIH website and in the Guardian, the bald facts are these:

  • In 2012-13 the stock of social rented homes in England fell by 19,189. In 2013-14 this figure more than doubled to 43,850. The loss over two years of over 63,000 homes compares with additions to the social rented stock (eg through new build) of a mere 28,000 homes.
  • Of these, more than 36,000 of the losses have been housing association homes. The biggest factor has been the ‘conversion’ of homes to so-called ‘Affordable Rent’ when they are re-let or their sale on the open market – arrangements which are driven by the need to cross-subsidise the  new development of other ‘Affordable Homes’.
  • Right to buy is the biggest factor for local authorities, with 17,000 sales over the two years.

John Perry of the CIH says “On present trends, the record loss of social rented homes in the year to April 2014 will be exceeded in the current year, as right to buy and conversions accelerate and new build for social rent declines still further. By April 2015, we can safely predict that over 120,000 homes will have been lost to social renting over the three years in which the government’s Affordable Rents programme was being fully implemented.”

It is hard to exaggerate what a disaster this is for housing in England. The stock of social rented homes is the most precious housing resource we have – already built, mostly in good condition, available on good terms and at genuinely affordable rents. It is like, as Harold Macmillan once said, selling the family silver.

It is increasingly clear that the Government’s unstated strategy is to gradually remove social rented housing from the system altogether, to be replaced by so-called ‘Affordable Rent’ at up to 80% of local market rents and by an increasing reliance on private renting. We have argued before that the real agenda for the Tories in Government (and therefore for the uncomplaining Liberal Democrats) was set by the infamous Localis report before the 2010 Election which advocated the ‘marketisation’ of all social housing.

Although ‘Affordable Rent’ levels have been mitigated for a proportion of new homes in London (even Boris Johnson appears to realise that 80% of market rent in London is hopelessly unaffordable), the average rent is still in the region of 65% of market, much higher than social rent levels. For tenants who need support from housing benefit to meet the rent – increasingly people in low paid employment – this high rent strategy is to all intents and purposes funded by making poor people poorer or through the back door by the State. In the greatest of all contradictions, it is Government policy to both increase and decrease housing benefit at the same time.

The pressures on the social rented stock, a vicious combination of the lack of new provision and the loss of existing stock, is the direct result of a range of government policies, which together mimic the Localis agenda:

  • The removal of social rented housing from the Government’s main funding programme – the ‘Affordable Homes Programme’ – which only supports homes made available at ‘Affordable Rent’ levels and other products like shared ownership.
  • Conversions and sales undertaken mainly by housing associations as part of their deals with the Homes and Communities Agency to get a degree of grant for new homes under the AHP.
  • Voluntary sales – Labour MP Karen Buck recently revealed that Genesis Housing Association had sold 200 homes in one borough – Westminster, where her constituency is – over the past few years.
  • Right to Buy – where discounts have now reached over £100,000 in London and the Government has totally reneged on its clear promise that RTB homes would be replaced ‘one for one’ – currently estimated to be about one-in-seven.
  • Going soft on Planning Gain – where so-called ‘viability tests’ are being used by developers to get out of making affordable housing provision in new developments.
  • In London the Mayor’s London Plan excludes almost any reference to social rented housing and expectations of provision are entirely in terms of ‘Affordable Rent’ or intermediate housing.
  • Misguided ‘regeneration’ schemes in many places where redevelopment leads to a huge loss of social rented homes and their replacement by much more expensive homes, even if they are termed ‘affordable’.

In some places, like for example Islington, there has been a real determination to focus on social rented housing, including a new council housing programme, refusing to support housing associations unless they provide social rented homes, and insisting on full replacement of social rented homes in regeneration schemes involving redevelopment. More could be done in many other places to protect social renting, but nothing should divert attention from the main cause – a Coalition Government that is determined to bring social rented housing to an end.

The importance of this issue, and protecting the family silver, is why I support the SHOUT campaign. SHOUT this week launched its new website, which can be viewed here.

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2 Responses to Selling the family silver

  1. We completely agree with the need to provide London with social housing. If a city cannot house its workers it will grind to a halt. However, with London’s property prices soaring to record levels and showing no signs of coming down, it is hard to see how social housing owners can be persuaded not to keep selling ‘the family silver’ without government legislation.
    The easiest way to keep the social housing stock at its current level is to embark on a programme of modernisation. Only after the standard of these homes is improved should new housing stock be built.

  2. paul calland says:

    Well said Steve…..and yet many in the sector still believe in this nonsense, salivate at the prospect of privatising the sector and continue with calls for the euphemistic misnomer of “rent flexibilities”…..yes they mean ever higher rents!

    Is it any wonder we have a HB bill of £25 billion and rising?……as Rich Hall once said “It’s not rocket surgery”

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