Social rent is the bedrock of housing and it’s imperative we invest now

This drift started in the 1980s, when grants to local authorities to build new housing were axed, combined with the sale of council housing. By 1986, only 33% of funding went to the supply of new housing, while 67% went to housing benefit.

There was a similar trend across Europe at this time, but it was much more significant in the UK, being part of the 1980s ‘stand on your own feet’ approach.

Alongside this, there has been a fall in the percentage of homeownership. From a peak of 71%, it fell to 65% in the 2010s and recent research shows homeownership to be even lower in London, estimated to be around 49%. Part of the reason for this is that around 40% of the council housing previously sold off is now privately rented.

It will come as no shock to find that private renting has filled the vacuum created by the fall in homeownership and the reduced availability of council housing at traditional social rents. This has been the major reason for the increase in housing benefit costs. Market rents can now easily be three to four times that of social rent. 

“Around 40% of the council housing previously sold off is now privately rented. Market rents can now easily be three to four times that of social rent”

Even with the capping of housing benefit payments introduced under David Cameron’s government, the upward cost of rents has continued, and with it, the cost of housing benefit.

Furthermore, it has to be said that so-called affordable homes at 80% of market rent provide little in terms of a solution, primarily because people in constituencies like mine, Dagenham and Rainham, simply can’t afford to live in them without the support of housing benefit.

But another future is possible: a future where traditional social rents form the bedrock of our housing strategy, a future with a significantly lower welfare bill where communities can thrive. Each new social rent home could save the government between £500 and £1,000 per month, which would otherwise go to private landlords.

This does demand an initial increase in capital investment in the affordable housing programme, but it will produce huge revenue savings over time.

The government’s intention to build 1.5 million homes in this parliament is a real ray of hope, but just imagine the savings that could accrue if this supply-side housing investment was to increase to an even higher level, which many forecasts suggest will be needed if we are to make a dent in waiting lists.

“But another future is possible: future where traditional social rents form the bedrock of our housing strategy, a future with a significantly lower welfare bill where communities can thrive”

I am not presenting this position simply as a route to government savings; it is fundamental to my values as a Labour MP. Social rents deliver far-reaching benefits, such as community stability, which come with providing secure tenancies and economic growth where families have more disposable income.

And all research shows that this leads to a healthier population, saving the NHS money. Overcrowding is reduced, giving children better chances in education, and even more money is saved by reducing spending on hostels and temporary accommodation, which is currently crippling local authorities across the country.

There’s also a wider economic benefit, on top of these positive outcomes, from shifting the balance of housing expenditure to bricks-and-mortar investment. Boosting the construction industry generates economic growth, produces well-paid jobs and greater tax revenues.

When we look at the problems facing our society, or consider the economy, when we think about health or well-being or family stability, all roads lead back to the housing question. And the answer is traditional social rent. 

Margaret Mullane, Labour MP for Dagenham and Rainham