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Government’s ownership focus completely misses the real need in the market and the economy

The new Affordable Homes Programme won’t change a bleak picture of fewer new social homes and declining re-lets at the same time as growing waiting lists and a huge increase in temporary accommodation. The focus remains elsewhere despite consistent growth in the private rented sector and homeownership levels holding steady. This has to change, argues Brendan Sarsfield

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“The reality is that the policy completely misses the real need in the market and the economy,” writes Brendan Sarsfield of @PeabodyLDN #UKhousing

The sector knows the government’s focus in relation to housing is on planning reform and boosting homeownership.

That’s fine in isolation and is not unexpected. Peabody builds a lot of homes for sale and shared ownership. But there is also a silence about the real problems at the other end of the market, which are only going to get worse without a change in approach.

I do acknowledge the five-year £12bn Affordable Homes Programme (AHP) and the fact that there is at least some government money for social and affordable rents. But as we come out of lockdown, it is worth reflecting on the problems that were there before and what needs to happen next.

The increased use of temporary accommodation in the past decade has damaged hundreds of thousands of lives and shows that demand is far exceeding supply, despite the above investment. Councils in England now spend over £1bn a year on temporary accommodation and the numbers of households in it has risen 82% in a decade. Incredibly, there are now more than 125,000 children in temporary accommodation – which is an outrage.


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We’re all hearing a lot about the ‘new normal’.

But we have a lot to do to sort out the old normal when England has more homeless children than the entire population of major cities such as Cambridge or Chester. The mass use of temporary accommodation to house children and their families should never be the norm.

There is a moral and economic argument for more social rented housing. When we talk about the AHP we’re not talking about investment in housing associations or councils, we are talking about investing in vital infrastructure for the country to enable people to work and children to learn.

“The mass use of temporary accommodation to house children and their families should never be the norm”

The explosion in the use of temporary accommodation is partly to do with the lack of new supply, but it’s also to do with churn (or re-let) rates in existing stock, lettings and the growth of the private rented sector (PRS).

I’m not against the PRS, but we know there is a link between higher rents, insecure tenancies and homelessness and temporary accommodation.

It isn’t the solution for everyone. Indeed, London Councils said the termination of a PRS tenancy is now the biggest single cause of homelessness.

The number of general needs lettings has reduced by 20% nationally since 2013, with housing association lettings in London declining by 35%. This is mostly because of difficulties in delivering new supply of affordable homes in London and the incredibly low churn rate in the capital because for most people it is unaffordable to rent or buy privately.

If you have a low income and find yourself with a social tenancy in London, how can you move out into other tenures? It is a double whammy.

The Ministry of Housing, Communities and Local Government agrees that the low number of re-lets is down to affordability pressures in London. It’s also why the experiment with fixed-term tenancies didn’t work – people were just not able to make ends meet without low rents.

Despite this evident lack of social mobility, a key plank of the government’s housing strategy takes the form of First Homes and a 30% discount on the market value (with a cap on a valuation of £420k). This means the grant rate for First Homes will be similar to the grant rate of a social rented home.

The homeownership discount (funded from AHP) doesn’t particularly work in London on any terms, and the real housing need is for social rent homes. You can now see what I mean about silence on the issues that matter.

“The people furthest away from homeownership are the growing numbers who are homeless, in temporary accommodation or who are already in social housing but have no means to move on”

The bleak picture is one of fewer new social homes and declining re-lets and churn rates at the same time as growing council waiting lists and a huge increase in temporary accommodation. This is compared with consistent growth in the private rented sector, homeownership levels holding steady and government ideology and resources directing subsidy to the top end of the market.

This is not just me saying that housing policy is focused at the wrong end. The hard evidence and numbers make it obvious.

The people furthest away from homeownership are the growing numbers who are homeless, in temporary accommodation or who are already in social housing but have no means to move on. Some of those currently in the PRS might benefit from home-buying discounts, but do they need it? The reality is that the policy completely misses the real need in the market and the economy.

I hope councils (of all political persuasions) and housing associations can join together and reinforce this evidence and message to government.

This is a structural problem that existing investments are not solving. When will the numbers be unacceptable to the sector and government or do we accept they will rise and rise? What is our plan? If the UK is going to succeed post-Brexit and recover from coronavirus, we need government to deliver for its people, invest in housing and help eliminate the homelessness crisis.

Brendan Sarsfield, chief executive, Peabody

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