23.11.15
Forced to Buy – damaging council stock and growing the housing benefit bill
Changes to housing policy have been under the public spotlight in recent months as the government focuses its effort to tackle the country’s alleged housing crisis. This arguably peaked during the Conservative conference in October, when David Cameron promised to scrap planning rules that require property developers to build affordable homes for rent, ever since which discussions have been firmly ongoing – especially as the Housing Bill makes its way through Parliament.
In the last few months, we have heard that Whitehall will overrule councils that fail to deliver housebuilding plans by 2017, that housing associations will add £60bn to public sector debt, and that Osborne is considering selling off government stake in social housing in order to privatise the sector’s debt.
We have also heard the Institute for Fiscal Studies warn that reducing social rents will largely represent a transfer from councils and housing associations to the exchequer, not to social tenants – who will actually see little or no direct benefit from the cuts.
In this same vein, the latest investigation into government changes to housing policy, published over the weekend by researchers at Cambridge University and the Joseph Rowntree Foundation, revealed that there will be around 75,000 less low-cost homes available to let over the next five years if replacement homes are made available as shared ownership rather than as rentals.
This could represent a huge blow to those who need access to low-cost rented homes in the future. Building replacement homes for sale as shared ownership will push those seeking social homes into the bottom end of the private rented sector – where homes are usually more expensive and lower quality that housing association homes.
If homes built to replace those sold are indeed put on sale, 62,000 tenants will be forced to find around £1,668 per year to pay private rent. Around one-third of these households are paying their rent themselves from their generally low earnings, researchers said, while two-thirds depend on housing benefit.
Moving these two-thirds into the private sector, or keeping them in homeless accommodation for longer, could add another £31m to the housing benefit bill – which already faces cuts as part of the government’s welfare reform.
The report also found that, since councils have different proportions of high-value housing stock, some will face losing large amounts of social housing in order to fund replacement homes. Those in the London commuter belt will be worst affected, potentially losing more than half of all their low-cost lettings.
Researchers said these findings highlighted the importance of preserving the number of genuinely affordable rented homes alongside extending the Right to Buy scheme, as well as ensuring every low-rent home sold is replaced by another of the same tenure, cost and locality.
But it’s safe to say this will be far from the truth, with the prime minister already intent on shifting the country from ‘generation rent’ to ‘generation buy’ by forcing people out of the rental market while allowing developers to get away with it.
More to come on Wednesday, as usual.
(Top image c. Peter Byrne/PA Wire)