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Opinion: The government needs to understand the impact of its own housing policies

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Opinion: The government needs to understand the impact of its own housing policies

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Published by Jon Land for 24dash.com in Housing

Opinion: The government needs to understand the impact of its own housing policies Opinion: The government needs to understand the impact of its own housing policies

By Neil Goodrich, performance analyst at Orbit, writing in a personal capacity…

A number of different figures have popped out this week which should worry anyone who is even a little bit sentient. Firstly it appears that we have mislaid around 35,000 social rented properties.

By mislaid I mean that they have been lost through right to buy or re-let as ‘affordable rent’. The next depressing figure is the startling news that nearly one million claimants of housing benefit are in work. The increase in those reliant on housing benefit, yet working, to meet their housing costs is a direct consequence of a lack of truly affordable housing and a stumbling economic recovery in which wages barely keep pace with rising costs (see below for numbers).

From the moment I first saw that affordable rents were to be an intrinsic requirement of the 2011-15 funding round I noted two things. One, ‘affordable’ rent is not actually affordable for the poorest in the UK, it is intermediate market rent by another name. Second, if you are looking at a means by which to reduce housing benefit spend you shouldn’t increase the rent on the very properties you intend to put people who can’t afford to go anywhere else. Especially as those people are going to use housing benefit to pay that higher rent. This is about as wise and logical as kicking a bear in the nuts and insulting its mother (i.e. not very).

I guess the hope was by allowing social landlords to charge more rent by switching social to ‘affordable’ properties it would make up for the monumental drop in capital funding. This is what I call the Student Loan approach to replacing capital funding i.e. push the financial burden onto someone else.

As the RSA (The Royal Society for the encouragement of Arts, Manufactures and Commerce, thank [insert deity of your choice] for acronyms) notes this is a bizarre state of affairs and has lead to an amusing situation, if only for the sheer farce of it all. One department, the DCLG is reducing funding and actively pushing up rents (but at the same time wants more housing built by social landlords…) whilst the other (everyone’s favourite) the DWP is trying to cut spending on housing benefit (which will impact on the ability of social landlords to build by reducing their income stream, perpetuating a lack of genuinely affordable housing).

Public money is being wasted as housing benefit that otherwise would have been paid out to cover social rent at 50-60% of the market rent is now being shelled out at 80% thanks to the new ‘affordable’ rent model. This roughly equates to £4 billion being thrown to wind that could have been reinvested elsewhere. More housing perhaps?

At the same time social housing stock is being leached by right to buy and affordable re-lets but the ‘lost’ properties are not being replaced at a fast enough rate to ensure there isn’t a net loss. Even worse a lot of the housing that is in the pipeline will be largely will be one or two-bed properties. Great for bedroom tax affected households, bollocks for everyone else. What happened to building housing according to need rather than central government diktat?

For me this is not just a monumental cock up at central government level, it is a continuing of the death by a thousand cuts to social housing that has been under-way since the 1980s. Private ownership is god in this country help to buy and right to buy have all been geared towards this. Social housing is an afterthought, the dirty cousin of the private sector (though people are at least starting to wake up to the power of generation rent).

The blasé, disjointed approach to housing policy highlighted above is merely a reflection of this, as is the fact we’ve gone through four housing ministers since 2010. It should be (another) wake up call (as if we need any more) to those who care about the sector to campaign on its behalf. If these bumbling chaps and chapesses can’t draw up coherent policy on their own then we will need to give them a little help and guidance. Failing that, whack them round the head with a very big stick (metaphorically of course).

A number in the sector have already asked the question what the hell is going on with housing policy at the moment? I feel a more suitable one would be what the hell are we going to do about it?

You can find Neil on Twitter: @ngoodrich87 or read his blogs: https://ngblog2013.wordpress.com/

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