Council and housing association landlords can no longer afford to house those most in housing need. These social landlords may not like the fact, yet it is fact.
In England alone we will see 385,000 pre-tenancy allocation tests called affordability tests for the 385,000 new social housing tenancies created each year on average and when, due to the overall benefit cap policy, these prospective tenants cannot afford the rent and social landlords cannot afford to house them because of it, then hundreds of thousands of prospective social tenants will be refused what we still call social housing.
The social housing model that originates in the 1948 Welfare State to house those most in housing need now becomes social housing allocation by affordability.
I stress, emphasise, accentuate, highlight and give prominence to the fact that council and housing association landlords have no choice but to refuse to accommodate those who cannot afford to pay the rent – the benefit household in that pejorative political jargon – yet this is fact and inevitable fact is one that social landlords cannot hide from or hope goes away or goes unnoticed.
The overall benefit cap policy means that the social housing model that is often called social ethos or social purpose is dead and buried. It is no more. It is the Norwegian Blue Parrot pining for the fjords as I detailed here and in any previous discussions. I am passionate about social housing so I can understand that housing professionals get angry when I say that social landlords will refuse to house the benefit tenant, as indeed do I, yet we cannot pretend this is not happening or that vague assertions such as social purpose will change it.
The provision of rented housing by council and housing association landlords is now not about housing need but on the ability of the benefit tenant to afford to pay given the £500 per calendar month cuts to their housing benefit entitlement from the reduced overall benefit cap limit.
A critical fact is that at least 74% of existing social housing tenants receive housing benefit (3.18 million of them) and some more will now receive Housing Benefit’s replacement in Universal Credit. Even if the 9% of all social housing properties which become empty each sees all of them replaced with the non benefit tenant it will take years for the core tenant of social landlords to change.
The social housing model that has served the country well for the past 70 years since the Welfare State is in crisis and a crisis with no apparent solution in sight.
Further threats to the social housing model are about to come on-stream too with Universal Credit and the LHA Maxima cap policy and both, when viewed correctly, will damage existing provision not just future provision.
The LHA Maxima fundamentally changes the provision of UK older persons housing and again factually, social housing has 3 pensioner headed households at 1.2 million for every 1 in the private rented sector (396,000) according to English Housing Survey (EHS) figures. The same LHA Maxima policy will give a bedroom tax type cut to under occupying (and even fully occupying) pensioners and under Universal Credit will apply to all existing tenants not just new tenants.
What these all have in common is cuts in entitlement and levels of housing benefit upon which social landlords operate and the social housing model with social purposes exists.
Everyone of these cuts to hosing benefit has been raised and recognised though regrettably met with weak and often apathetic challenge, except the overall benefit cap impact to prospective tenants which has been by and large missed despite being THE most significant impact of all the housing benefit cuts for the social housing model.
When we look at the numbers, which by definition are also facts, we find not just a huge change but one one with a huge regional shift in dynamic. There are in fact for overall benefit cap purposes 12 household types who qualify for a 3 bed property from the 1 Parent 2 Child (1P2C) through to the 2P4C household – six household types each with two variants of JSA or ESA.
- 1 Parent 2 Child JSA
- 1 Parent 2 Child ESA
- 2 Parent 2 Child JSA
- 2 Parent 2 Child ESA
- 1 Parent 3 Child JSA
- 1 Parent 3 Child ESA
- 2 Parent 3 Child JSA
- 2 Parent 3 Child ESA
- 1 Parent 4 Child JSA
- 1 Parent 4 Child ESA
- 2 Parent 4 Child JSA
- 2 Parent 4 Child ESA
With the overall benefit cap was at £26,000 per year it saw 3 of these household types (10, 11 & 12) have a maximum housing benefit below the average 3 bed social rent in London. It now has 7 of these 12 with the reduction to £23,000 per year.
Yet outside of London when the overall benefit cap was at £26,000 none of these 12 household types had a maximum housing benefit figure less than the average 3 bed social rent figure. At the new £20,000 per year cap is has 9 of these household types with a maximum HB less than the regional average 3 bed social rent.
Type 7 of the 12 above will get just £50 per week in their maximum housing benefit. Type 8 will get £21. Type 9 will get £25 per week. Types 10, 11 and 12 will get £0.50 pence per week as their maximum housing benefit (and have a bigger cut if on Universal Credit too.)
Now throw into the mix that 83% of social housing is outside London and 36% of all social housing is the 3 bed or larger property and this change is of huge significance as the overall benefit cap moves from 44% of all capped households being in London to just 17% and with 83% being in the regions (85% using CIH figures.)
There is no doubt that the overall benefit cap policy has destroyed the social housing model and rendered it historic and nostalgic. There is equally no doubt that the OBC is a nationwide phenomenon and affects the social housing model in the lowest UK rental areas.
Sit and moan? Hope above hope that nobody notices? Hope its all a bad dream? Repeat the mantra of we will always house those most in housing need and every variant of that vacuous platitude? Or will social landlords finally wake up to the fact that their social housing business model no longer exists and holding on to it in silence will only see it die much more quickly?
Just thought I’d put a few thoughts down rather than be one of the many minions who will today be writing what a damp squib the Housing White Paper turned out to be …