For the last 30 or so years there has been a wide consensus in the housing sector that what we are all trying to achieve is the elimination of housing waiting lists by making housing available to anyone who needs it at a rent that they can afford. Most of us genuinely believed that with the right government in place we had a chance of reaching this ‘holy grail’.
But, as we grapple with the Coalition Government’s austerity measures and their implications for our sector and contemplate what an alternative future government might do, it is difficult not to conclude that we now need a more realistic vision for the sector.
Years of property price inflation outstripping wage inflation in large parts of the country has led to a huge increase in the pool of people who can not afford to buy or rent housing at market rates. In the meantime, the stock of ‘social housing’ has not increased and social housing rents have, in many places, reduced as a proportion of market rents.
Consequently, a social housing tenancy is a valuable and scarce commodity and very large amounts of Government subsidy are now required to deliver the total number of new homes needed to change this situation.
Currently, ‘social housing’ completions are running at 20,000 to 30,000 a year. The Coalition Government is offering lower grant but higher rents to enable the sector to build approximately 30,000 - 35,000 homes a year. The amount of grant available has dropped from c.£8.4 billion over three years to c.£4.5 billion over four years.
But, to start make inroads into the numbers on housing waiting lists (1,763,140 in 2008/09), the sector needs to be building at least 100,000 homes a year for many years to come.
If we cling to the old vision and keep rents at their current levels, we need in the region of £8-£10 billion a year in capital subsidy to achieve these numbers of new homes. There are, of course, other factors involved here - not least housing benefit levels, the availability of private finance and securing sufficient land with planning permission. But the key question is whether any future Government is likely to give us £8 billion a year in annual grant? In other words, is housing ever going to be a sufficient political priority to compete for these kind of sums against the demands of health, education and defence?
The alternative is, perhaps, to accept that capital subsidies have had their day and that the Government, in future, has to subsidise the individual solely through the benefit system (arguably a better way of targeting help to poorer people). Rents must therefore rise to market levels to generate the funds needed to support the building of new homes and housing associations have to differentiate themselves from private landlords by the quality of their services and their willingness to act as social enterprises.
This will raise questions about the ethos and charitable status of housing associations. But it will bring an end to the current situation in many parts of the south where the allocation of every new housing association tenancy gives one family a subsidised home for life while disappointing five to ten equally deserving families. It will also stop housing association tenancies being ‘traded’ and misused by criminals and others for profit (see the recent Panorama programme) and reduce concerns about underoccupation.
But reaction to the Coalition Government’s proposals on higher rents and fixed term tenancies has been lukewarm at best and hostile at worst. Even Conservative and Lib Dem Councils in Hertfordshire, where Hightown works (and where the Housing Minister has his constituency), do not seem to like the idea of Affordable Rents at 80% of market rents and fixed term tenancies.
If these policies are unpopular, it is difficult to see the Labour Party, in its forthcoming housing policy review, adopting them. But public expenditure levels are likely to be severely restrained for many years to come so, realistically, how can any party subscribe to the old ideal of affordable housing for everyone in need?
Most importantly, what are we as a sector, through the NHF and CIH, going to be saying to the political parties (as they prepare for the next election) about grants, rent levels and tenancy lengths? Is it time for a new vision? Or should we all be doing more to promote the old one?