Social housing reforms let down tenants

Originally posted on December 4 on my blog for Inside Housing.

Go back to the days when the government’s confidence in its marketising agenda for social housing was at its greatest and one consistent justification was made by ministers for their policies.

The introduction of affordable rent would mean more new homes for the same money, fixed-term tenancies in the Localism Act would ‘end the lazy consensus’ and free up more lettings for people on the waiting list and Welfare Reform Act measures to remove the spare room subsidy would free up larger properties for overcrowded families.

Figures released last week show the combined impact of the policies and the results are not pretty.

Starting with the relatively good news, affordable housing supply funded by government agencies between April and September was up on the same period last year. Starts rose 65% and completions 23%, holding out the prospect of another significant year-on-year increase in 2018/19 when figures for the full year are published.

Though the vast majority of the new homes were ‘affordable’ there were actually even bigger increases in starts and completions of social rent homes compared to 2017/18.

But this is where the good news starts to dissipate. To put this into perspective, we are only talking about 493 social starts and 307 social completions in six months and both those figures are down by more than 90% on the same six months in 2009/10 before the coalition came to power.

Meanwhile the taps are running into a bath with no plug: a second batch of statistics released last week show that there were more than 20,000 sales of social housing by councils and housing associations in 2017/18.

True that was down 10% on the previous year, but that that compares with 31,000 affordable and just 990 social completions over those same 12 months.

New homes are only part of the picture though: for anyone in need social housing what really counts is the total supply of new lettings.

This is where the reforms introduced under the coalition should really be paying off by now – except that the figures show the opposite has happened.

The headline numbers in a third batch of stats are bad enough: total new social housing lettings fell by 22,000 or 6.5% to 312,989 in 2017/18.

This was the fourth annual decline in succession. Since 2013/14, the first year of the bedroom tax, total lettings have fallen by 83,000 or 21%.

Lettings

But the graphic is not the end of the story of course thanks to those changes introduced by the coalition.

Around 40,000 of the new lettings made in 2016/17 were on affordable rent; that leaves 272,806 social rent lettings, which was down 5.9% on a year ago and 24% on 2013/14.

One positive point to note here is a 37% fall in the number of conversions of existing social rent homes to affordable rent, from 8,524 in 2016/17 to 5,344 in 2017/18 – but that still means fewer lettings at a social rent.

In addition, almost a third of the new lettings were not made on secure tenancies: 18% of new tenants (56,000) were on fixed-term tenancies in 2017/18 while 12% (39,000) were on license agreements.

Some of these trends are not new, and there are considerable variations between different landlords and between local authorities and housing associations, but the general picture is pretty clearly the opposite of what we used to be told by previous housing and work and pensions ministers.

Welfare reform has not increased mobility within social housing like ministers said it would.

As Lord Freud put it in a House of Lords debate on the Welfare Reform Bill:

‘It is important to look at the bigger picture. If there were movement into the private rented sector, that would free up accommodation in the social rented sector, enabling it to be let to others who may otherwise have been renting privately. Alternatively, it could be offered to people who are currently placed in often expensive temporary accommodation.’

The stats say the opposite. Around 98% of social landlords said no when they were asked whether the ‘removal of the spare room subsidy’ or benefit cap was the reason why a tenant left their last settled home.

And the fixed-term tenancies that were meant to mean that social tenancies was targeted more effectively at households who need them seem to have had negligible impacts so far, as reflected in the u-turn on making them mandatory for council housing and the change of policy on fixed terms by several housing associations.

So why have lettings fallen so much in the last four years? MHCLG statisticians argue that:

‘One explanation could be a fall in the number of vacant properties available to be re-let. A widening affordability gap between the social and private rental sectors, especially in London and the South East, discourages current social tenants from moving into private accommodation. As a result, turnover is lower in these areas.’

They point to re-let rates in London being half what they are in the North or Midlands because private sector rents are so much higher.

So social housing lettings are falling because social tenants cannot move – but private tenants who need social housing cannot get it because social lettings are falling. And both are facing ever-increasing shortfalls against their rent as benefits are cut.

Join the dots and you have not just a demonstration of what is so badly wrong with our housing system but also a big part of the context for the increase in child poverty revealed in figures released on Tuesday by the Joseph Rowntree Foundation.

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