Opinion: Why the Government’s social housing reforms are flawed

The Coalition announced its plans for the reform of social housing on Monday and Andrew Stunell – our man inside the Department for Communities and Local Government – summarised the main points and the reasoning behind them here on Lib Dem Voice.

These plans, especially when coupled with the previously announced changes to housing benefit, are sure to spark a great deal of debate on these pages and we’ve already seen this happening in response to Stunell’s article.

At first glance, the main idea behind the reforms is admirable – to make social housing fairer. Most people are aware of the astronomical waiting lists that exist for social housing and that there are a great number of people living in overcrowded and/or unsuitable homes due to a lack of supply.

But I think a lot of Lib Dem supporters will disagree with the role assigned to social housing in the DCLG consultation document. On page 5, we are told that social housing “should act as a springboard to help individuals make a better life for themselves.”

This isn’t the purpose of social housing. Social housing is intended to provide homes, creating long term stability for individuals and their families, filling the gap left by the private housing market. The proposals include the introduction of fixed term tenancies with the minimum tenure option at two years. This would change the nature of social housing, removing the “home” element and downgrading it to simply providing a roof over your head.

It’s only fair to point out that the minimum term is one of the aspects of the proposals highlighted as being open to consultation, and I would urge all Lib Dems (and any non-Lib Dems) to challenge this. However, there is a larger problem here. One of the aims of the reform is to move people into the private sector, or into “affordable rent” properties – another coalition proposal. Taking the private sector first, one of the reasons demand for social housing is so high is because of the near impossibility for people to get on the property ladder, coupled with sky high rent prices.

Under the ‘housing’ section on the Lib Dem website, there is a paragraph that states:

Liberal Democrats believe house prices shouldn’t be allowed to spiral out of control because it stops young people from getting onto the housing ladder and puts millions of family homes at risk. And we believe there should be good, simple, cheap homes to rent for people who can’t afford to buy so no-one’s left without somewhere decent to live.

If the coalition is serious about bringing in these changes to social housing, then they also need to address the difficulties in buying properties and the astronomical rent prices. Speaking from a personal point of view, I am in that generation of people who cannot dream of owning their own property (especially as I live in London) and although I work two jobs, can afford little more than a room in a houseshare.

So far I haven’t seen any serious attempts at introducing the means to regulate the private housing markets.

The affordable rent properties may be intended to help address this. But if landlords are able to charge 80% of local market rates under this scheme, how “affordable” these will be is highly questionable.

And this brings me on to my biggest concern about these proposals. We keep hearing that the Government wants to make work pay – that they want to encourage aspirational thinking by rewarding progression in the workplace. But what we could witness here is that individuals in social housing could make themselves worse off – they could lose their home and have to move to a worse property, or even a different community – if they get promoted at work and the end of their tenancy is approaching.

We are told that advice and assistance for tenants moving out of social housing should be provided so as to avoid homelessness. But with the problems the private sector faces still unaddressed, how much practical use this advice and assistance will provide remains to be seen.

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  • One of the fundamental issues with the coalition is that they are trying to change the nature of the welfare state once and for all, for mainly ideological reasons.

    Before it was ‘cradle to the grave’ as Bevan put it, and there had always been a consensus of sorts on that at least within the political sphere (although a debate about what should be provided from the cradle to the grave has always occured).

    Now the government is attacking the premise of the welfare state. The welfare state should just be there for those who absolutely need it, and it should provide a minimal service. Instead of having a strong public sector which everyone is invested in the government wants to make the public sector provision distinctly second class so that anyone who can would much prefer private services.The most worrying thing is that they have never revealed these worryingly radical intentions either during the election or since, they are still trying to manipulate the debate so they don’t have to confront the issues…. it’s particularly worrying that Clegg backs them wholeheartedly when the party would never support this ideological stance independently. It’s a dangerous road we are heading down.

  • There is a myth that Britain is a crowded island, mostly concreted over and with no room to house the population.
    Some facts on housing and land ownership:
    There are 60m acres of land in the UK – 70% of it is owned by 1% of the population
    2.8m acres of that land contain 16m of us living in what we consider normal houses and flats.
    28m acres are owned by fewer than 40,000 families
    An acre of land without planning permission is worth around £10,000, with planning permission land is worth £1m per acre.
    The only way new land is released for constructing housing is when one of the 40,000 families that own britain sell land. They only do that when planning permission is granted. The £1m per acre is then taken from the productive activities of a lifetime of the buyers work and transferred to the ancestor of someone who acquired the land. In the meantime they rent it out to tenant farmers and receive farming subsidies from us.

    Solution – we the people agree to pay £20k per acre to land owners for building land (double the market rate for it as agricultural land) and use it to construct rentable publically owned housing. If the total cost per property is £70k then we rent it out for what the cost of a 30 year repayment mortgage would be over that time. After 30 years no more rent is payable but there is no right to buy and no right to pass it on and you pay for your own repairs.

    The tenant gets a secure home for life at a reasonable price, the public benefits from a rental income, private rents fall to compete, house prices fall which means less money is spent on servicing debt.

    What is not to like?

  • Timak

    The issue that you will face will be that building will reduce the value of existing properties driving mortgage holders into negative equity. Land owners will stir up opposition on that basis. If there was any chance of this not preventing what you suggest I would be with you all the way.

    Do you have any solution to this problem that is not Georgist based. If not then you should join the Georgist movement. I am 100% behind doing something but it will require a lot more that detail than the simple idea that you suggest which will certainly fall at the first hurdle. The politicisation of huge groups of people particularly the lower middle class, young working people,and non unionised labour will be required as the first move. A massive education process is required to show these groups where their true interests lie.

    It would be better to hack away at the periphery of this problem, specifically business land, rather than go for the jugular as you suggest.

    Ed Joyce

  • Is there a glaring problem with Government proposals in the amount of rent that can be charged.

    If it is fair to set the level of housing benefit at the level of the lowest third of rents in an area then social housing should surely match this rather than 80%. Otherwise social housing would be out of reach for those that need it most. Perhaps I’ve read this wrong??

  • I am similarly confused Steve. If social housing and housing benefit are designed for those who are excluded from the private sector, then surely they should be aimed at, broadly speaking, the same group of people? Both the social housing housing and housing benefit reforms seem regressive to me and completely at odds with the social mobility = equality liberalism that Clegg has been espousing the last few days.

  • Norman Fraser 25th Nov '10 - 2:00pm

    Matt, since you are being a smart arse, it would appear that ‘cradle to the grave’ is less a quote than a dead metaphor. See http://thinkexist.com/quotes/with/keyword/cradle_to_the_grave/

    The rest of you post is Tory nonsense not requiring detailed rebuttal.

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