The ‘problem of rent’ has just got worse

Originally written as a column for Inside Housing.

The UK has among the lowest levels of basic benefits in the developed world but spends more than any other country on housing benefits.

The two statements, which come from a new report by the Resolution Foundation, are of course connected and they are the result of deliberate policy choices over decades.

The first relates to the way that the benefits system evolved in the wake of the Beveridge report with low levels of working-age benefits supplemented by extra support for housing, children and ill-health.

Beveridge had confessed that he was unable to solve what he called ‘the problem of rent’ – how you account for housing costs that vary between different areas – in his blueprint for social security after the Second World War.

His fudged solution was to add a flat rate housing allowance to contributory unemployment benefit but that was rejected in favour of means testing in the scheme that was introduced. 

However, his whole report was written on the assumptions that full employment, mass council housebuilding and private sector rent control would continue.

By contrast, most European countries have more generous contributory and earnings-related benefits supplemented by a means-tested safety net.

This graph from the report shows the difference:

For clarity it’s worth pointing out that this is based on the OECD definition of housing benefits in kind, which includes payments for housing costs but not mortgage tax relief (still paid in some countries) or capital investment in social housing or the ‘subsidy’ of the lower rents it produces.

The second policy choice dates back to the deregulation of rents and decline of social housing in the 80s and 90s – reversing those assumptions made by Beveridge – and more recent falls in home ownership among low-income households that have left them paying higher rents.

Read the rest of this entry »

Two-way street

(Originally posted on June 30 on Inside Edge 2, my blog for Inside Housing)

What does the evidence say about the links between housing and poverty?

In an age of austerity, food banks and the bedroom tax, the links may seem obvious. A housing policy based on letting housing benefit take the strain – relying on private renting and rising affordable rents – at the same time as it is being cut looks like a pretty good mechanism for creating poverty.

But evidence emerging from the Joseph Rowntree Foundation’s housing and poverty research programme (see my summary here) shows a relationship that is both more complex and more troubling. The housing system can act as a defence against poverty and deprivation (as it has in the past through social housing, housing benefit and the homelessness safety net) but it can also be a cause of them (as it did before through high housing costs and poor conditions).

Read the rest of this entry »


Role model?

If we have a Living Wage, why not a Living Rent? Well, now we do.

With due respect to the Scottish campaign of the same name, the report launched this week by Savills, the Joseph Rowntree Foundation and National Housing Federation addresses directly what I’ve long thought to be perhaps the most important question in housing policy: how to make homes genuinely affordable to people on low incomes.

Current policy gets nowhere near that. Employment may be at a record high but millions of people are trapped in low paid work, in part-time jobs and zero hours contracts, and average earnings have only just begun to rise again after years of decline.

Yet private sector rents are too high, leaving families reliant on housing benefit whether they are in or out of work and vulnerable to cuts to come: projections by Savills suggest that one in four of us will be private renters by 2019. ‘Affordable’ rents are only affordable in relation to a market artificially inflated by speculative investment and the aftermath of the financial crisis. Even social rents rise by an inflation-plus formula regardless of what’s happening to earnings.

Read the rest of this entry »


Housing 2040

Where are we heading on housing over the next 25 years? That’s the question posed by a new study – and the answer may make you may want to look away now.

The study for the Joseph Rowntree Foundation (JRF) takes existing trends in the relationship between housing and poverty between 1991 and 2008 and projects how it will change up to 2040.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Frank words on welfare reform

Getting the same criticism from different people is usually a sign you’ve got something wrong. How about for IDS and the DWP?

Three different reports published this morning amplify earlier warnings about the implementation of the bedroom tax, the wider impact of welfare reform on tenants and landlords and the prospects for universal credit. But it would surprise nobody if the work and pensions secretary saw them as yet more evidence that his reforms are a success.

Two of them come from the Joseph Rowntree Foundation (JRF). Steve Wilcox finds that what he neutrally calls the ‘housing benefit size criteria’ has affected fewer people than expected but that half of those are in arrears and 100,000 who want to downsize are trapped and unable to move. Anne Power concludes that welfare reforms may end up making tenants more, rather than less, dependent and are making them more vulnerable.

The third is from the work and pensions committee and warns that it is still not clear that universal credit will work. The MPs on the all-party committee think that implementation will be delayed even further and have some strong words about Iain Duncan Smith’s attitude towards their scrutiny.

Read the rest of this post on Inside Edge, my blog for Inside Housing


Inside the pressure cooker

So what is really happening to homelessness in the wake of the financial crisis, housing shortage and cuts in benefits?

Where the Homelessness Monitor 2013, published on Friday by Crisis and the Joseph Rowntree Foundation, paints a picture of a grim situation that is bad and getting worse, the DWP and DCLG seem to see only sunshine and happy smiling faces.

Read the rest of this post on Inside Edge, my blog for Inside Housing