Back to Rachman ?

If anyone was in any doubt before 8th July, it is now crystal clear – the Tories just don’t like social housing.

The gradual erosion of building subsidies and piece-meal benefit changes of the last decade have been absorbed by social housing providers, in the belief that this couldn’t last and that we would adapt, get more efficient, use more private funding, but essentially carry on as before. Not any more….

The latest budget and policy directives send a clear message: the Government vision for a low tax, low wage, low public-spending economy means the end to grants to build affordable housing and limited benefits to make rents affordable (except for the most vulnerable). Coupled with the start of a negative media campaign, and hints about de-regulation and de-regiScreen Shot 2015-08-02 at 08.36.58stration, I am in no doubt that the Tories would much rather Housing Associations dropped their pseudo-public personae and joined the ranks of big business – borrowing and building at scale for market and sub-market rent, with the sole objective of increasing supply, and ‘let the market take care of affordability’.

We are witnessing the start of a revolution as big as any of the last Century – the start of Council housing, the growth of home-ownership, and bigger than the right-to-buy of the ’80s. As much as I am fearful of the turmoil that will result, and resent the disregard for the poor people who will be hit by the changes, there’s a little bit of me that reluctantly thinks (dare I say it?) maybe it’s right….

I’ve long thought that subsidising home ownership simply drives up house prices, and that social housing has been wrongly obsessed with eligibility and access – forgetting that whereas you might need affordable housing at some stage in your life, this may change, and why should you hang onto this scarce and valuable social resource to the detriment of the thousands of others who are homeless or on waiting lists?

At it’s peak in the 80’s, social housing comprised almost 1/3 of the stock, and was a tenure of choice – unimaginable today and in a future where low-cost ‘safety-net’ housing might be available only for the minority of people most in need. Home ownership has started to decline and this trend will continue for the foreseeable future, as average house prices continue to outstrip average wages. Private renting has been on the increase since the early 90’s, with more than half the households in London now renting at exhorbitant market rents. Recent figures show the UK as having the highest housing costs in Europe with an average monthly rent over £900 compared to just £600 in Germany. We are building less and our scarce housing supply is being eroded by investors, rather than providing homes.

We’ve known for ages that the housing system in this country is broken – just blaming the Government and carrying on as before won’t fix it. Maybe the Tories will bring about the revolution we need to shock the system into a new paradigm: to rebalance supply and demand, to reset prices to meet affordability, and to have a healthy mix of home ownership and rented housing, with a social housing sector that is valued by all.

As well as stepping up and building more homes to rent, maybe social housing providers have another role to play – no longer trying to maximise access to social Screen Shot 2015-08-02 at 08.35.47housing, but to provide homes for people when they are most in need, and to protect the most vulnerable from the excesses of the market – otherwise who will prevent the exploitation and appalling conditions that prevailed when the private rented sector was last king?

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