Subsidies exist in private sector too

Perhaps the most obvious hole was that she conveniently forgot to mention housing benefit, which is given to around one million private tenants. The average cost of benefit per tenant in the private sector is about £20 higher than that for a housing association tenant who receives benefit.

Of course, many private landlords dislike dealing with benefit recipients. As the Rugg report on private renting pointed out, the public sector has had to invent expensive incentive arrangements for landlords, such as leasing schemes which pay guaranteed rents for up to five years, even when the property is unoccupied.

There is nothing wrong with such schemes, but they are clearly a form of subsidy for housing poorer tenants that goes direct to the landlord.

Ms Wilson has one clear point, which is that social sector rents are below market levels. As Steve Wilcox, editor of the Chartered Insitute of Housing’s UK Housing Review, shows in the coming edition of the report in December, the gap is currently an average of £36 per week - much less than Ms Wilson would have us believe, and one that varies enormously between the north of England and the south east.

It is true that this is an economic subsidy, but it is not a cash subsidy: council housing is currently in surplus at national level, as Inside Housing has repeatedly made clear.

The worst aspect of Ms Wilson’s piece was that it perpetuates the impression that ‘subsidised’ housing is the same as social housing. But of course, there are cash subsidies for homeowners, too.

Low-cost home ownership, renovation grants and income support for mortgage interest together cost the taxpayer well over £1 billion each year.
And both homeownership and the private rented sector also get hidden subsidies. Although owner-occupiers no longer get tax relief on their mortgages, they get very substantial relief from capital gains tax.

Private landlords don’t get this tax saving, but they do still get mortgage interest tax relief, as well as tax relief on the costs of repairs and management.

What constitutes ‘subsidised’ housing is therefore much more complicated than Karen Wilson suggests.

Applying the label only to social housing tenants is not just a slur on the tenants, but also happens to be completely wrong.

John Perry, policy advisor to the Chartered Institute of Housing

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