Survey reveals 20 per cent think social housing faces 30 per cent cuts or more
Housing sector braces itself for ‘years of pain’
One in five senior housing professionals thinks next week’s emergency Budget heralds years of pain that will see the sector’s budget slashed by more than 30 per cent.
Chancellor George Osborne will outline plans to cut housing funding as part of the emergency Budget on Tuesday. But the sector is already bracing itself for a tough future, according to a new survey of 152 senior professionals published today and seen by Inside Housing.
The survey, carried out by consultants Pricewaterhouse Coopers, revealed that 20 per cent think that affordable housing faces cuts of 30 per cent or more in the next spending round.
Twelve per cent think the £2.4 billion national affordable housing budget will be cut by more than 40 per cent.And 100 per cent of respondents believe waiting lists will increase as a result of the cuts.
The survey revealed that the sector is also anticipating many years of problems as a result of the cuts.
Forty-three per cent think it will take more than five years for investment to return to present levels after the axe falls.
Ninety-seven per cent felt that the public spending cuts will ‘seriously constrain the supply of affordable housing for many years to come’.
The housing profession is also considering a series of radical measures to cope with the reduction in budgets.
Fifty-two per cent of those surveyed said that a new system in which benefit claimants received vouchers to pay their housing costs would help support the delivery of new affordable homes.
Fifty per cent said reforms to the tenancy for life to enable social landlords to offer different (and shorter) tenancies are important - although 47 per cent disagreed.
And seventy-nine per cent of landlords agreed it was important for major restructure of the rent subsidy system to give more freedom to social landlords to increase rents.
What the sector thinks
‘Housing benefit is a real unknown. Everyone is mindful of the impact that a freeze in housing benefit would have in terms of business plans. I don’t think we will see structural changes but that doesn’t mean we won’t see a measure to drive down the benefit bill.’
Richard Capie, director of policy and practice, Chartered Institute of Housing
‘The previous government had a major consultation on encouraging [institutional] investment in the private rented sector. That was led by the Treasury so the hope is that it will be grasped by the new government and it will consider measures to urge institutional investment.’
Ian Fletcher, director of policy, British Property Federation
Emergency Budget
What housing professionals should look out for
- Possible freeze in housing benefit in order to prevent a further rise in the predicted £20 billion annual bill.
- What will happen to the £610 million promised investment in affordable housing that the new government said was never properly funded?
- Moves to tackle the public sector pension black hole and changes to final salary pension schemes.
- Will private landlords be protected from increases in capital gains tax?
- The extent to which the Homes and Community Agency budget of £6.12 billion will be cut. This includes the £2.4 billion national affordable housing programme.
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Readers' comments (5)
Michael Read | 18/06/2010 10:13 am
The corpse is still fighting back.
"Fifty per cent said reforms to the tenancy for life to enable social landlords to offer different (and shorter) tenancies are important - although 47 per cent disagreed."
I take this is as meaning that if social landlords could rebase their rental income towards a market rent then they would approve.
Indeed, they would prefer to be private landlords offering market rents and doing it on taxpayers' money, if you please.
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Anonymous | 18/06/2010 10:31 am
A cap on HB? Interesting. Is this to combat the £2.7bn premium they pay o private landlords.
To be absolutely clear 'premium' here means the addition public funds paid to private landlords over and above what they pay for the same properties to a social landlord in LHA / HB.
If councils can deliver a house for rent at 70% less than a private landlord, and isnt it said that council houses have been paid for many times over by tenants, then why are private landlords with far less red tape and regulation and therefore less cost, being given 70% more?
Market rents therefore must be chronically inefficient and there is no need for social landlords to move toward them in any significant way.
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Rick Campbell | 18/06/2010 11:15 am
I get the impression that there is a perception that HAs are perhaps looking at more ways to milk their cash cow - their tenants.
Cheshire Peaks and Plains (my landlord) have just used around £200,000 to tart up pavements and a roundabout belonging to Cheshire East.
So, if CPP can charge higher rents and CE ups the council tax banding for living in a more deluxe area that would be a good investment, would it not?
That way, the tenants could be shafted twice and owner occupiers once whilst Dave and Nick's mates pocket a load of dosh?
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Anonymous | 18/06/2010 12:43 pm
Whilst there may be a need to reform social housing; propsals to increase rents and reduce security are in effect proposals to abolish social housing! I would strongly object to any such proposals as I would like to see more affordable housing offering security not less!
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Anonymous | 18/06/2010 1:09 pm
""Whilst there may be a need to reform social housing; propsals to increase rents and reduce security are in effect proposals to abolish social housing! I would strongly object to any such proposals as I would like to see more affordable housing offering security not less!""
I am sure that many would agree with you, but where is the money coming from? The whole country is in a mess and cuts will happen everywhere, not just in social housing, sadly we cant always afford what we need, we have to balance the books, whether its in Govt or in our own private finances. If your morgage goes up, you have to make cuts to other areas of your spending or you go bankrupt, common sense really! Time to get real!
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