Social Housing Affordability – The REAL Housing Crisis

Housing Associations and council landlords are refusing to house those who cannot afford the rent directly because of the overall benefit cap level that was recently cut by £500 per month in the regions.

Can they do this? – Yes!

Many wrongly believe that housing associations and council landlords must house those most in need and are unable to refuse to accommodate, yet they can refuse and they are doing so, and to make this crystal clear from the outset I am not blaming them for refusing.


WTF is going on?

The easiest way to explain what is going on is to think of the Simpsons – Homer, Marj, Bart, Liza and Maggie – the family unit of a couple and 3 children who now receive a maximum of £50 per week in housing benefit due to the £500 per month / £6000 per year cut from the overall benefit cap policy.

The Simpsons approach their council one-stop shop and are referred to the councils own landlord who rents out the 3 bed property the Simpsons require at the UK regional average of £94 for a council 3 bed.  The council landlord says no we wont house you as you can’t afford the rent as they are £44 per week short which is a £2,294 per year risk of arrears.  The same will happen is they approach a local housing association with their £104 per week average 3 bed rent and the Simpsons then are on the homeless pathway the overall benefit cap creates.

The Homeless Pathway?

The Simpsons then go to the council homeless department who have to accept them as homeless and has to arrange (so-called) temporary homeless accommodation for them and the council pay for that cost which if the Simpsons are lucky in a low rent area will be two rooms in a Travelodge at £49 per room per night or £686 per week.

Yes this does read like financial madness and it is yet the overall benefit cap is a massive transfer of cost and financial risk from central to local government – and it is happening as an article in Inside Housing yesterday confirms and also confirms what I have said has always been inevitable.

How many will this affect?

When you factor in that council and housing association landlords have 385,000 new tenants per year just in England and that 140,000 of them will be the 3 bed property that is now unaffordable for the benefit family like the Simpsons or any other who fully occupy a 3 bed property then the homeless numbers and homeless cost will go through the proverbial roof.

Just from 140,000 families refused in social housing in England alone sees circa 467,000 children being made homeless.  Then add in the many more who will be refused on the same affordability grounds by private landlords and we see that homelessness becomes an epidemic scale right across the UK.

For comparison at Christmas 2016 or just 6 weeks ago Shelter figures caused outrage at 120,000 children being homeless on Christmas Day.  Yet the overall benefit cap impact could quadruple that 120,000 figure just from those refused social housing!

General Comment

The media bombards us with high private rent levels and how expensive it is to rent in London yet today we see the cheapest landlords in councils refusing to house those on benefit in the cheapest areas of the UK.

This is a totally new level of housing crisis as the cheapest rents of the cheapest landlords in the cheapest areas now see benefit tenants refused then the obvious follow up is where the hell will they live?  The answer is that local council homeless departments and/or social services will have to house them in temporary homeless accommodation and at a huge cost to local council budgets as explained above.

Death of Social Housing? Yes!

The UK no longer has a housing safety net because of the overall benefit cap policy and the one-fifth of the 1948 Welfare State which created ‘social housing’ to slay the giant of squalor is no more; it is the Norwegian Blue Parrot pining for the fjords.

There is no such thing as social housing when social landlords are forced to turn away those most in housing need. This is not Cathy Come Home, it is much worse than that.

Social landlords have always been the safety net for those that the private landlord refused to accommodate yet that safety net has been removed because of the overall benefit cap policy as social landlords can no longer afford to house the Simpsons either!

The Simpsons are falling on the parish and the local council have to pick up the tab at a huge cost to local council budgets that can only mean huge cuts in other council services to pay for the multi-million pound per year cost of the temporary homeless cost the overall benefit cap gives.

Cost to and lack of local council options?

Surely any council should pay the shortfall with a DHP as this is much cheaper than the cost of putting the Simpsons in a Travelodge?

That is obviously right yet cannot be done and I use Liverpool to illustrate why the numbers show this to be impossible and I use a £100 per week 3 bed rent level to keep the numbers simple which means the Simpsons have a £50 per week shortfall that the question involves paying the social landlord £50 per week with a DHP, a Discretionary Housing Payment.

Liverpool receives £2 million in DHP from central government and is allowed to put a further and maximum £3 million to this to give a £5 million maximum DHP pot. Let’s assume Liverpool City Council can find this extra £3 million.

Tenants in Liverpool prior to the cut in the overall benefit cap has £0.3 million cut by the policy in housing benefit and also had £6.7 million in HB cut with the bedroom tax.  In total a £7 million per year cut.  As their maximum DHP pot and spend was £5 million there is a £2 million per year shortfall in Liverpool’s DHP pot.

After the overall benefit cap cut, Liverpool tenants still have the £6.7 million cut in HB of the bedroom tax yet the amount of HB cut with the reduced overall benefit cap increases from £0.3 million per year to over £7 million per year.  Thus the total HB cut is £14 million yet Liverpool still has a maximum DHP spend of £5 million.  The £2 million shortfall in the councils DHP coffers becomes a £9 million shortfall per year.

In short Liverpool cannot pay the DHP to mitigate the new overall benefit cap cut even if it wanted to.  Hence they will simply have to suffer the huge increase in its temporary homeless bill, which while admittedly has a fair degree of speculation could be as much as £30 million per year which in turn means Liverpool City Council has to find £30 million of cuts elsewhere to pay for it.

Get a job you scrounger!

The only way to escape the overall benefit cap or at least the only practical way is to work and forms the basis of the Tories rationale.  After all just 16 hours per week at minimum wage if a lone parent and just 30 hours a week at minimum wage if a couple is surely easy to do right?

No – as those pesky facts once again prove.

The pesky facts of the overall benefit cap

The DWP official data released in November 2016 on who was benefit-capped at the old and higher level reveals that just 13.6% of households claim Job Seekers Allowance (JSA) and are thus ready and able to work.

15% of benefit-capped households were getting ESA, which we used to call Incapacity Benefit, and the ESA cohort are expected to be ready and able to work in anything up to 2 years and if they get support to move back into employment which does not exist.  The ESA cohort are thus unable to work and thus unable to avoid the overall benefit cap and thus unable to avoid becoming homeless.

More benefit-capped households were and are incapacitated and prevented from working that those who are on the dole!

The vast majority of benefit-capped households are lone parents with, critically, children of preschool age and account for almost 60% or 3 in every 5 benefit-capped households.  For this cohort to be able to work they need child care provision and this means at least another 400,000 minimum child care places have to appear out of the ether in order for them to work and avoid the overall benefit cap.

Barely scratch the surface in practical terms as to whether child care provision can be found, can be found at the times needed, that is further complicated by the only employment available being zero hour contracts and the employee called in at different times and on different days and this is hugely problematic and illogical to believe it is possible.

The cost of the get a job you scrounger ideology?

Even if it was possible in practical terms and even if the minimum 400,000 new child care places could appear out of the ether overnight, this would actually cost central government somewhere between £0.9 billion and £1.2 billion per year MORE as they would have to pay for this child care provision (or up to 70% of it) and the working tax credits bill would also rocket too by around a further £1 billion more per year.


Numbers don’t lie only politicians do is a phrase I often use to describe the hugely superficial political rationales used when it comes to welfare that crass Americanism that has slipped into vogue.  As long as Joe Public believes the scrounger narrative and believes that hundreds of thousands are sitting on their lazy backsides watching Jeremy Kyle on their flat screen TVs and each getting £500 per week in welfare … blah blah blah … such superficial narratives and post-truth ideology holds sway.

Yet that entire edifice of post-truth superficial ideological nonsense is about to come crashing down and exposed for what it always has been with the horrendous homeless impacts that the overall benefit cap policy directly and solely creates.

The fact it will take a further half a million children and it could be significantly more to be made homeless and have their life chances irreparably damaged to finally expose the superficial ideological nonsense of the overall benefit cap policy and more generally welfare reform / austerity or whatever you care to call it is sickening and an outrage.

The UK is becoming a non democracy when it cannot provide a roof over the heads of its most vulnerable which is what the overall benefit cap policy does.  It is despotic when alongside that the policy overtly targets children who are punished for the apparent sins of their parents which is precisely what this policy does.

I have stated and repeated all of the above arguments for at least 18 months and till I am blue in the face repeating them and nobody has listened or done anything about it.  I am not however pining for the fjords and no one calls me Joey any more…


If you want to read more and in some detail try here and here and here all from 2017 and a further minimum 30 such posts I have written over the last 5 years on the overall benefit cap are still all there on this SPeyeJoe wordpress site


The Inside Housing article stating social landlords are refusing is here and the key passage:


The DWP data on benefit capped households (Table 6)


The 36% of social housing that is 3 bed+


The average social rent levels


The new social lettings per year official data





11 thoughts on “Social Housing Affordability – The REAL Housing Crisis

  1. I would not contend the figures you present, but why haven’t the Office for Budget Responsibility summerised this for public consumption, even if the politicians refuse to acknowledge it?

  2. This government……………. I will not use expletives to demonstrate my OUTRAGE regarding the Tory elite, but I think you will know exactly what I mean. T May et al would prefer to cosy up to D Trump than deal with the mega crises we have in UK. She smiles, says what she thinks are the correct words. How do you know when she is lying?……. she opens her mouth and speaks. I will leave it there because my rage at the Tory elite is overwhelming! whereas the Tories are; insipid; inept; bland etc. They EACH have MORE faces than our church clock.

  3. Based on Inside Housing’s findings, are you prepared to row back on your claim that affected tenants will be refused from all social housing? 11/34 gives means somewhere between 17% and 48% of HAs are “tightening up affordability criteria.” Even if all of those respondents mean they are refusing all affected households – which is probably not the case – this is less than half, maybe a lot less. And councils must be less likely to refuse than HAs, exactly because of the temporary accommodation costs they’ll incur as you point out in your post.

    The benefit cap is a horrible policy – indefensible now that they can’t even use the “no more money than a working family” rhetoric – but it doesn’t mean the end of social housing. The housing sector will be able to take some of the hit itself.

    1. I still maintain that it is inevitable that all social landlords have no option but to refuse and that includes councils.

      This is one survey with the questions not asked, and no time frame for the questions asked and some very errant pre-existing figures that the ones given are all higher than the official last figures in every locale mentioned.
      What basis do you have for saying that the sector will be able to take some of the hit? Please elaborate on this assertion which you do not substantiate.

      And while I do maintain for the reasons given that social will inevitably refuse, that fact that if just 1 refuses based on affordability rather than need DOES mean the end of the social housing model

  4. Isn’t it a little no-true-Scotsman to say that one refusal means the end of the social housing model? I’m sure there were some affordability based refusals on the fringes long before the benefit cap started.

    My bases for saying the sector can take some of the hit:

    – Two thirds of the IH sample said they won’t be tightening up their affordability criteria at all;
    – Housing associations I’ve spoken to and heard present at conferences on this issue also have not tended to say they will refuse tenants;
    – Councils I’ve spoken to have been generally supportive of the idea that paying a rent top up will save them money in the long run;
    – Many HAs and councils have invested in good employment coaches who offer nuanced and holistic support when it comes to finding tenants jobs, which is a way out of the benefit cap for many tenants.

    1. Your 4 bullet points
      1. How many social landlords were aware of the benefit cap impact on new tenants? There was not one mention of this publicly by social landlords or CIH, LGA, NHF.
      2. See 1 above
      3. Councils cant do this as the figures for DHP show
      4. That only applies to existing tenants not new tenants

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