Housing associations core new product is private rent and private sale as the official figures show and building for social rent is now an afterthought and niche product.
Housing associations trade on such vacuous statements as we are charities and we have social purpose and we will always house those most in need are nothing of the sort as the FACTS show.
Yesterday the National Housing Federation released figures for the first 3 quarters of 2016/17 which sets off huge alarm bells for the social housing model as they say just 13% of completions and just 10% of new housing starts were for properties to be rented at a social rent level.
In Table 1 we see 3,304 completions at a social rent level out of a total of 25,294 which is just over 13% and in Table 2 we see 3,226 of 31,270 new build starts being for social rent which is just over 10%.
In the previous financial year of 2015/16 housing associations new builds were just over 13% for social rent with 5456 out of 40,124 and so what the facts reveal is that social rent has become a niche product for these claimed social landlords and that private products have become the core product of housing associations.
Before the usual howls of outrage come from the housing associations, I know full well why you are building what you are and also know full well that you will argue this is what you are forced to build as central government has pull the funding plug – and I fully accept such arguments – it is time to stop the delusions and look at the inevitable impacts of this direction of travel.
The first delusion is we – the housing associations – are building private products to subsidise the allegedly ‘core’ social rent product. This is pure sophistry as in 2015/16 we saw the lowest number of social rent properties built by housing associations in the post war period yet the National Housing Federation only focuses on the record high number of 40,124 overall completions.
Secondly, the cash cow of private sale and private rent products is NOT producing new social rent properties as the figures show. The argument of building new private to cross-subsidise social rent can only apply to new builds not to existing social rent products and yet this is not happening.
Thirdly, we see around 50% of new completions being the misnamed ‘affordable’ rent product which again while chasing the higher rent to mitigate no government funding also has a huge impact on both social purpose and affordability.
These AR products mean right across the country that the family with 2 children is caught by the overall benefit cap or in short they cannot be rented to the core social housing tenant who is in receipt of Housing Benefit – and some 74% of all social tenants receive HB.
This means that housing associations core customer has to change and change very quickly and that is not achievable. Then on top of these figures we see the huge steer in the recent Housing White Paper that means all councils are forced to build only private rent products and so inevitably housing associations will do the same in this rental revenue grab and indeed will be forced to do so as what they build is not under the control of HA boards but of the bond markets.
There cannot be any social purpose of we will always house those most in need and all of the other similar phrases that housing associations trot out like mantras and thus there is no such thing as the social housing model any more.
The affordable (sic) rent product was and is a rush to charge the tenant so much more to mitigate the reduced and zero funding that government now gives and cannot continue as (a) the change in the core tenant simply cannot happen, and (b) the stated purpose of building AR and private products to cross-subsidise social rent will never see any social rent housing developed ever as the bond markets will never allow it.
Housing associations have been on a fast slippery slope that only leads to being fully private landlords with no social purpose by their undue haste to charge the tenant more with the affordable rent products which are anything but affordable and which changes to Housing Benefit with the overall benefit cap make hugely financially risky.
As a result of that undue haste to charge the tenant ‘customer’ more not only has social purpose and the social housing model been under attack, we now see the HWP go the full hog and take control away from HA boards as to what housing products are built and passed to the bond markets. Housing association boards have in large part neutered themselves and social purpose has become a term of meaningless empty nostalgia used only as a PR smokescreen.
So while I am fully aware of why housing associations have chased the tenant money they need to be aware of the consequences of this and FFS please stop deluding yourselves as well as everyone else when you say this dash to private products is to cross subsidise social rent that has now become a niche product or even obsolete.