Chair of the Policy & Politics Board Alex Marsh reviews the implications of the proposal to cut housing association rents by 1% each year for the next four years, announced as part of the recent government summer budget. This post was originally published on the Policy Press blog.
George Osborne’s recent “emergency” budget proposed many changes to state support to lower income households in a bid to fulfil the Conservatives’ manifesto pledge to cut £12bn from welfare spending.
One unexpected aspect of this package was the proposal to cut housing association rents by 1% each year for the next four years.
This proposal was justified with reference to social housing rent rises over the last few years. These have pushed up the already substantial housing benefit bill. Households have needed greater state assistance in order to afford the rents being set. Bearing down on rents over the next few years will, it is claimed, both reduce the housing benefit bill and force social landlords to deliver efficiency gains. Continue reading Summer budget 2015: Lower income families hit by housing policy changes→
Everybody seems to accept that there is something wrong with the way that housing is delivered in Britain, particularly in England. In some parts of the country house prices are stubbornly high and rising; elsewhere there seems to be housing nobody wants. All political parties are committed to enabling people to live in homes that they own, yet levels of home ownership are falling as the proportion of the population living in private rented housing rises. More people now live in private rented accommodation than in social or council housing. The massive decline in council house building since the 1980s has not led to a significant rise in the building of new homes for sale.
The solutions on offer by the major political parties seem to circle around the provision of some sort of subsidy to first-time buyers, as well as looking for ways of persuading (sometimes effectively bribing) local authorities and neighbourhoods to allow developers to build in their areas. Under the last Labour government, regional and local targets were introduced for new housing, albeit with few levers to ensure that the targets would be met. The latest proposal from the Conservative Party is to allow tenants of housing association properties to buy the homes they live in at discounted rates, with little reflection on the extent to which the sale of council houses has brought more private rented property onto the market, rather than increasing home ownership.