Social Housing

Peter Spring kindly transcribed a piece from BBC Radio 4's More Less on Social Housing, it is still available on Sounds

“More or Less” broadcast at 9am on Wednesday 20 September, presenter Tim Hardord, fact-checked Rachel Maclean, Minister of State at the Department for Levelling Up, Housing and Communities claim on 7 February 2023 that the government ‘built record numbers of social rent homes’. (Social rental housing, is meant to be relatively lower cost.) It is not, however, true that England has built a record number of
social rental housing.

Overall, it is true that between 2010 and 2022 the Conservative government built more higher rental affordable housing than the 1997 and 2022 Labour government but this is not what the Minister said.
Also, the amount of lower-rent social rental housing built has fallen to a level where the total stock is actually declining.

Main points
- 2010-2022 total low-rent social rental housing building is 56% down on 1997-2010.
- 2010-2022 total overall higher rent affordable housing building is 0% up on 1997-2010.
- Percentage of affordable housing accounted for by social rental housing is down from 64% (1997-2010) to 26% (2010-2022).
- The 60% cut in government affordable housing grant meant in 2010 about 64% of government grant built affordable housing were purposed for social rental but by 2014 the percentage had fallen to 14%.
- Post 2010 lower government grants have resulted in higher borrowing and interest costs adding financial pressure on housing associations and councils.
- Social rental housing new builds are currently exceeded by demolitions and right-to-buy sales meaning the total social rental
stock is actually falling.
- Government savings on cutting the affordable housing grant by 60% are counteracted by higher payments to private-sector renters and B&Bs.

 Abridged content

In 2010 [the last year of a Labour government] 39,500 social rental houses were built. In 2022 the number had fallen to 7,600. Also, the Labour government (1997 to 2010) built 360,000 social rental houses and the Conservative government (2010 to 2022) 160,000.

The Department of Levelling up was unable to provide data to support the minister’s claim. The department referred to affordable housing which is not the same as social housing. (Affordable housing is a broad definition of lower-cost housing where rents can be up to 80% of market rates.) Social rental housing falls under the umbrella of affordable housing where rents are typically between 30 to 50% of
market rates.

Department of Levelling Up said that the Conservatives (with for a period the Lib-Dems) had delivered more affordable homes between 2010 and 2022 than labour had Labour 1997 and 2010. Between 1997 and 2010 under Labour 560,000 affordable houses built and between 2010 and 2022 under the Conservatives 620,000.

Therefore, under Labour about two-thirds (360,000/560,000 = 64%) of affordable housing was for social rent of the most affordable kind. Under the Conservatives, the same proportion was for about one quarter
(160,000/620,000 = 26%).

After 2010, contrary to what the Minister claimed, the number of social rent houses dropped dramatically. The underlying reason was that in 2010 the government cut the affordable housing grant rate by 60% - that is money going to subsidise discounted housing. The housing associations and councils building these homes could either: build far fewer homes but continue to build them for lower social rental; or
build more homes at higher affordable rent. Most associations and councils did the latter. Thus, in 2010 about 64% of government grant built affordable housing purposed for social rental but by 2014 the percentage had fallen to 14%.

Also, lower government grants meant associations and councils borrowed and the higher interest costs added pressure to designate new homes not as heavily discounted social rent homes but as less d discounted alternatives.

Further despite some new social rent housing being built the actual total stock is falling. In 2022 21,600 homes were sold under right-to-buy or demolished and there were 7,500 new builds resulting in a 14,100 fall in the stock of social rental housing. Over a decade the overall loss in social rent housing was estimated at about 165,000. (Currently, there are about 4 million social rental houses which is about 17% of the total.)

Essentially the saving in government expenditure from the 60% cut in the affordable housing grant has resulted in higher expenditure in payments to private sector landlords. The low-income families who
would have been offered social rental housing 20 years ago have not gone away but will be living in the private rented sector in which cases councils will be topping up their rent through housing benefits or worse still they could be living in bed and breakfast.  The House of Lords estimates that the bill for housing benefits is about £23.4 billion a year which is more expensive than most government departments and a good chunk of that will be go to private landlords so effectively subsidising private landlords.

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