Social housing has a long history of providing affordable and good quality housing. What started as a philanthropic endeavour in the late 18th century, became the jurisdiction of councils in the early 20th century as the link between social housing and improved health outcomes became clear. However, in the 1980s under Thatcher, council homes were sold off for discounted rates in the notorious ‘Right to Buy’ scheme. Since the 2000s, not-for-profit housing associations and private developers have dominated the social housing market and councils have largely been forced into the backseat, only called in to foot the bill for residents in temporary accommodation on seemingly never-ending waiting lists.
The Labour Party has long recognised that improvements to social housing come hand in hand with tackling the complex web of health, education, and opportunity inequality. For Deputy Prime Minister Angela Rayner, the keynote speaker at this years’ Social Housing Conference, fixing the housing crisis, where 1.3 million households currently sit on waiting lists for social housing, underpins Labour’s five missions, especially economic growth.
Marking a departure from previous Conservative governments lacklustre approach and total disregard for the housing crisis, this Labour government has set the ambitious target of building 1.5 million new homes by the end of this parliamentary term. The theme of yesterday’s conference focused on how the sector can sharpen its focus in planning, funding, developing, and maintaining social houses to meet this government’s target.
Three weeks on from Rachel Reeves’ Budget there is much to be optimistic about. The Budget allocated a further £500 million of additional funding to the Affordable Homes Programme with the Spending Review for further funding details yet to follow. The Labour government has also secured a rent settlement that covers the next 5 years providing certainty to both landlords and tenants in the short term, while consultation is underway as to what form a longer-term settlement will take.
The base rate cut by the Bank of England is also good news for borrowers, and further interest rate decreases will reassure investors and accelerate private investment in the social housing market.
So long as investors have consistent policy and ambitious targets from the government, there is fertile ground for private and public capital to flow. Given that no secured lender has lost money on investment, investors can feel confident that cash will flow in the form of rental payments as demand is so high.
Despite ambitious policy and momentum seemingly shifting in the right direction, there are significant challenges to overcome. There is the glaring problem of continued high costs for social housing developments, whereby the final asset of a house does not amount to the investment taken to build it.
Added to this burden, is the additional pressure caused by increasingly complex tenant needs. Tenants are increasingly self-identifying as ‘vulnerable’ with many suffering mental and physical ill-health and facing prolonged unemployment. One landlord recalled her experience of a tenant in distress who threatened to burn down their block of flats with a petrol can. The scrapping of Local Strategic Partnerships by the coalition government of the 2010s, has dislocated avenues for social landlords to coalesce with local services including NHS and social care workers, councillors, and the police. This system was inexpensive to run and provided an effective way to engage across local services.
Moreover, with previous Conservative governments gutting social financing, affordable housing is often forced onto vulnerable residents who are placed in locations far from their familial and employment networks.
Surmounting the challenge of over a decade of austerity, stalling planning approvals, and the systemic passing the buck that has characterised social housing projects will certainly be no mean feat. Rayner did not shirk from the responsibility, stating that the difficulty of the challenge did not preclude the overwhelming importance of the task.
The key to meeting these targets is sectoral-wide reform and investment. The government has announced its plans to reform planning procedures by reintroducing housing targets for councils and by making it easier for developers to build on ‘grey’ parts of the green belt. By removing red tape whilst ensuring that safety regulations are accounted for, there is hope that this could cut costs and speed up developments across the sector.
Rayner also announced the beginning of her departments’ consultation of the ‘Right to Buy’ scheme. Indeed, George Osborne’s overzealous discount rates in 2012 sent 2 million council homes into private hands and left vulnerable tenants with a lack of affordable housing options. Rayner emphasised the need for urgent reform to incentivise home ownership whilst supporting councils to invest, develop and receive rental income and thereby oversee the ‘biggest wave of council housing in a generation.’
Giving councils cash to buy homes from landlords, letting them at cheaper rents to those on waiting lists, and receiving rental income, would also avoid incurring the millions of pounds councils currently spend on temporary accommodation.
A revision of interest coverage for SME housing developers could also be a welcome change to inspire healthy competition and drive improvements in the social housing sector.
There also needs to be a shift towards improving and maintaining existing social housing. Integrating tenants into governance and decision making and ensuring there are consistent feedback processes, is vital to ensure social housing responds to tenants’ needs and to ensure tragedies such as Grenfell, where tenants’ concerns were continually ignored can be avoided.
With all these levers at hand, from a political standpoint the consensus is clear. Government must work to join the dots for the housing sector, bringing together different stakeholders and finding common solutions and innovative strategies to reach its ambitious targets.
An ambitious housing agenda ties directly into Labour’s five key missions. Bringing the Industrial Strategy and Infrastructure Strategy in line with the housing agenda will ensure that responsibilities are not siloed into individual departments but that departments work together to achieve all five missions and ‘Get Britain Building Again.’
If you enjoyed this piece, follow the link here to read MP for Cities of London and Westminster Rachel Blake’s recent blog on tackling short term lets.
