The sheltered housing pensioner in Liverpool needs to pay £2,400 per year more in rent due to the Tories housing benefit changes.
Sheltered housing is dead due to Conservative housing benefit policy and social landlords haven’t even noticed this cataclysmic change to their business!
Housing benefit in the social rented sector will be capped at the Local Housing Allowance (LHA) rate is the Conservative policy which I detail below and the current average 1 bed sheltered housing property has a rent of £136.98 and the 1 bed LHA rate in Liverpool is £90.90 per week.
The pensioner would therefore need to top up their rent from their state pension by £46.08 per week which is £2400 per year!
The same situation will happen in most of England (though not London) and in Scotland and Wales as this change is a housing benefit policy and therefore GB wide.
This is the exact same policy change that I argued would close all domestic violence and abuse refuges and most other supported housing provision here and shows just how little the Conservatives actually look at the impact of their policies before they announce them. I am amazed and quite frankly, angry that social landlords have not seen this and not raised merry hell over the issue but let me explain how this works.
The policy change
In the Autumn Statement 10 days ago George Osborne said that housing benefit paid in the social rented sector would be capped at the LHA rate and the Comprehensive Spending Review (CSR) blue book says this:
The wording is specific and note well the emphasis on including I have highlighted above as the HB change is not just to the shared accommodation rate but to all social rented sector rents including supported housing and sheltered.
The latter part of the wording reveals it will apply from 2018 but only to new tenants from 2016 and so does not apply to existing sheltered housing tenants, yet it does means that any new sheltered tenants from April 2016 will have their maximum housing benefit reduced from 2018 and so what social landlord in their right mind will give a new sheltered housing tenancy from next April!
Liverpool figures – About an hour ago I looked on the choice based lettings portal at 1 bed sheltered housing and there are currently 8 number 1 bed sheltered properties available with rents ranging from £120.57 per week to £150.87 per week and the average of these 8 properties is £136.98. Yet the 1 bed LHA rate is £90.90 in Liverpool which means the sheltered tenant would need to find a £46.08 per week top up to make the rent.
I doubt the sheltered housing rent level will be lower than the £136.98 Liverpool figure in other higher rent areas yet I note that in Birmingham the 1 bed LHA rate is £98 per week giving a £39 per week shortfall or in Leeds here is it £99 per week (£37 shortfall) or even in Bristol with a 1 bed LHA of £121 per week with at least a £16 per week shortfall.
London typically has a £250 per week 1 bed LHA rate so sheltered housing there will not be affected yet it will in most other parts of England and throughout Scotland and Wales if this policy change goes ahead.
Why has this not been seen?
Allow me a rant on this reader and that rant is directed at London, London, bloody London! All policy changes taken by this and all previous Governments look to London’s housing conditions and ignore the rest of the UK. If it works for the 12% of housing that is London it will work for the other 88% in the regions.
This issue is the classic example of that as the London social housing pensioner has a rent well below the 1 bed LHA rate which is why (a) this pea-brained Government missed the points above, and (b) why the ‘great and the good’ of social housing also missed it because the CIH, NHF and all other social housing omniscienti only ever look at London, London, bloody London!
Housing people should note well that David Orr the Chief Executive of the NHF in an article about the limiting of housing benefit to the LHA rate only mentioned extra care housing in East Anglia in his article when any of housing’s ‘great and good’ would surely have seen the issue that sheltered housing for 88% of social landlords in the country is dead and buried because of this change!
Pensioners are not exempt from LHA regulations which also appears to have been overlooked by housing’s omniscienti and of course a fair proportion of sheltered housing tenants are not pensioners and in the 45 to 67 age group so even if the Conservatives walk the Damascus road and exempt the pensioner from the LHA limit, then there is still a huge percentage of sheltered housing tenants that are not pensioners and will be hit by this change.
In summary, social housing, wake up and smell the bloody coffee and grow a set of balls once you realise the impact of proposed HB policy changes that affect you and your tenants.
Go back and read what the blue book says and read all the CSR documentation and you will quickly realise that the LHA limit imposed on social housing HB is not just the SAR an is not just the refuges and hostels and other supported housing environments it affects, it is your common and garden sheltered housing.
Do I need to remind that the English Housing Survey says 28% of all social housing tenancies go to the over 65s or that the sheltered cohort of all those over 45 amounts to 63% of all social tenants! Yes the entire business model of sheltered housing and a huge percentage of all social landlords business model is well and truly buggered by this change (London and other perversely high rent areas excepted) and make that a triple espresso sharpish!
The implications of this are massive for social landlords, how about due diligence and the merger code you are all poring over at the moment? What’s that? Did you really just say those expletives housing people?! One of these days you will realise what each policy change by this Government actually means and grow a set instead of getting into bed with Government and believing that Glorious Leader Orr is the Messiah… he’s not even Brian!
Tenant Campaign Group (TCG)
I said a month or so ago that the social tenant needs to mobilise and utilise the latent political power that 5.6 million social tenant voters have in the TCG and so many social landlords emailed me to say what a good idea this is and how can we help and what support do you need. Here we have a classic example of how the TCG could lobby and stop this outrageous policy change and save the sheltered housing model and every social landlords business plans.
Yet the TCG cannot get off the ground without initial funding which many social landlords said they would do on a one off no-strings basis and because tenant and landlord do have many mutual interests such as this example above. The fact that social landlord lobby groups have not even seen this mainstream sheltered housing issue and are blase over the supported housing issue this also sees such as the closure of all refuges just shows how badly the TCG is needed for social housing’s survival.
If you want an idea of just how serious this is in financial and leaving aside the huge political significance of cutting pensioner benefits of any kind the official housing regulator figures for sheltered housing just in HAs and assuming 74% of pensioners receive HB then this is a £500 million per year cut to housing benefit landlord income. Or about 1.5 times the bedroom tax HB cut to housing benefit and that figure does not include pensioners and other sheltered tenants in council housing!
The death of sheltered housing also means the death of social housing in other words..and yet the social landlords omniscienti have not seen this! No wonder today we see the first reported case of a housing association leaving the NHF in protest at their ineptitude!
A number of housing people have tweeted that they DO know all about this issue and some ‘scary numbers’ are being passed around. Yet if that is the case it also becomes a case of the so-called ‘housing sector’ adopting the usual strategy or (a) we know best, (b) how dare you say we don’t know, and (c) far more worried about their bottom lines than they are about the social tenants they call customers!
This issue cries out for general public consumption given it sees the “poor pensioner” at huge threat of eviction and ANY form of benefit cut to the grey vote is a huge electoral liability for ANY Government. Yet once again the housing sector refuses to make any form of communication public facing and instead carries on with its secretive we know best strategy – yes that is the same one that has not worked for the past 40 years!!!
Perhaps I need to put out a list of those housing associations who have a large sheltered housing percentage in its stock and who are massively financially exposed by this sheltered housing change they all claim to know about!!!
I can fully understand any organisation wanting to keep its huge financial exposure as secret as possible in general terms,as this affects its credit ratings, yet not on this issue given the political and electoral sensibilities AND because if I can see this sheltered housing issue then it goes without saying that the financiers who fund housing associations can also see this huge issue.
Once again, and even accepting that the housing sector knows about this which I doubt, we see that same old failed policy of shhhh we can sort this out behind closed doors strategy that has never worked for the past 40 years and the social tenant once again gets well and truly shafted.
When will social housing ever learn!
Here’s some evidence from propertypool the Merseyside choice based lettings portal and check for yourself the cost of 1 bed sheltered housing eg in Liverpool , Wirral and Sefton
Liverpool 1 bed LHA is £90.90 pw – a pensioner HB cut of £3,004 pa
Wirral 1 bed LHA is £86.30 pw – a pensioner HB cut of £3,240 pa
Sefton 1 bed LHA is £90.90 pw – a pensioner HB cut of £2,546 pa
How strange indeed that the housing sector does not make these figures public given that the general public went ape over a £1300 per year tax credit cut?!
Shhh! Don’t tell anyone as ‘housing knows best!’