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Why all roads lead to social rent
The government’s 1.5 million homes target will have little impact unless it includes a significant portion of genuine social rented housing, writes Dr Stuart Hodkinson, associate professor at the University of Leeds and commissioner of the Manchester Social Housing Commission
Stuart Hodkinson is a lecturer in Critical Urban Geography at the University of Leeds, and a member of the Manchester Social Housing
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Why all roads lead to social rent #UKhousing The government’s 1.5 million homes target will have little impact unless it includes social housing, writes Dr Stuart Hodkinson of the University of Leeds #UKhousingAcross England, a decent, secure and affordable home is being denied to increasing numbers of people due to a housing crisis that in almost every measure is worsening by the day.
Levels of homelessness and rough sleeping have been steadily rising over the past decade and are now on steep upward curve. Last year, 123,100 homeless households – including 150,000 children – were warehoused in temporary accommodation – a 16.3% spike on the previous year and the highest on record.
Many families are crammed into overcrowded properties riddled with damp and mould, as well as lack basic facilities for cooking and laundry. Some will wake each morning not knowing where they will be sleeping that very night. Around a quarter of households will have been stuck in this situation for more than five years.
These are life-threatening housing conditions – a possible cause of 74 child deaths in temporary accommodation last year.
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Beneath these extremities lies a much larger crisis of precarious housing and unmet need with sharply rising evictions and 1.33 million households on social housing waiting lists – the highest numbers in a decade.
This crisis has its epicentre in London, but is also badly affecting cities like Manchester, where over the past 10 months I have had the privilege of working with an incredible group of people on the Manchester Social Housing Commission.
Our first report, Manchester’s Housing Crisis in Context: Why We need Sustainable Homes for Social Rent, paints a depressing picture of city’s housing fortunes. Outside of London, Manchester has the highest proportion of households in temporary accommodation (three times the national average) and shares the second highest local rate of homelessness, affecting an estimated one in 71 people.
Having lost more than 16,000 social rented homes since 1979, the city is now almost completely dependent on private landlords to temporarily house homeless people. Beyond the immediate human cost, the city council is having to divert millions of pounds away from frontline services to fill the gap between housing benefit rates for temporary accommodation that are frozen at 2011 levels and runaway private sector rents.
While the commissioners don’t always agree on everything, we do agree on two fundamental things. First, the government’s ambition of building 1.5 million homes over the next parliament will have little impact on the housing crisis unless it includes a significant portion of genuine social rented housing. Just building more homes for market sake or rent – or even affordable rent – does little for people in temporary accommodation, sleeping rough or sofa-surfing, and won’t affect house and rental price affordability.
Only a major scaling up of social housing – with rents linked to local incomes, allocation based on need and security of tenure – can do this. Modelling commissioned by the National Housing Federation (NHF) and Crisis estimates the need for at least 90,000 net additional social rented homes across England every year to address the backlog of need and meet future demand.
Second, the government will fail to hit its 1.5 million target and deliver the social housing we urgently need if it continues to rely on the privatised supply model. As the Competition and Markets Authority recently concluded, housing supply is effectively dominated by a small number of land speculators that deliberately drip feed homes on to the market to maintain high house prices and game the viability clause in the planning system to minimise and even evade their affordable and social housing obligations.
More than a million homes handed planning approval since 2015 remain unbuilt, equating to roughly one in three over the period. Rather than further liberalise the planning system, the government should be breaking up the developer oligopoly.
That’s why our report sets out a roadmap for boosting housing supply through increasing the delivery of genuine social rent.
Achieving this will be extremely challenging given we are currently building just 10,000 social homes a year while losing 26,700 annually primarily from Right to Buy (RTB) sales. It will require a massive increase in public investment to provide the estimated £11.8bn needed to deliver 90,000 social rented homes a year. The government’s large reduction in RTB discounts back to pre-2010 levels will certainly stem the loss of stock, but it must go further and abolish the RTB to incentive social landlords to build.
“Just building more homes for market sake or rent – or even affordable rent – does little for people in temporary accommodation, sleeping rough or sofa-surfing, and won’t affect house and rental price affordability”
Social landlords also need a long-term rent settlement to provide certainty about income to support borrowing and commit to stock improvement, and local authorities need greater access to cheaper debt through the Public Works Loan Board and more support to get council housing built again. Cities like Manchester also need financial help to deliver large-scale housing growth of all tenures on brownfield locations. Increased investment must come with increased accountability for how funds are invested, and increased rights and enforcement capability for tenants and regulators to ensure homes are safe and healthy.
Alongside this investment, the government must separate the delivery of social rent from other affordable tenures. It should reintroduce minimum requirements and local targets, specified in an updated local plan, to ensure the right number of social rent homes are built to meet local need based on people who are currently homeless, at risk of homelessness, and on the social housing waitlist. Setting a minimum requirement also helps to address viability loopholes and creates a level playing field so that places are not ‘traded off’ against each other.
In the longer-term, the most effective way of increasing housing supply in general, and social housing in particular, is for local authorities, housing associations, co-operatives and other community bodies to build it themselves on public land.
The government will no doubt baulk at the cost implications given the gloomy state of the economy and public finances. But this is a win-win solution. The government is already spending most of this money on subsidising private landlords’ profits via housing benefit. Re-directing it towards bricks and mortar subsidy to build 90,000 social homes a year would yield a net economic benefit of £51.2bn that would fully repay the initial investment within 11 years and provide a massive economic stimulus.
Dr Stuart Hodkinson, associate professor, University of Leeds, and commissioner, Manchester Social Housing Commission
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