Affordable Housing - What it is and why protest?

I have been sent the graphic below and asked to circulate this protest against the affordable housing awards.  I do so as it gives opportunity to say what the claimed ‘affordable’ housing actually is - the direct opposite of the dictionary meaning of the word affordable

The term ‘affordable housing’ was invented with the 2011 Affordable Homes Programme which spawned the chronic misnomer of ‘affordable rent’ or AR and which on average is a 37% higher rent level set by councils and housing associations than their traditional rent level called social rent or SR. 

Essentially, AR is the government sweetener to SRS landlords for government cutting capital subsidy by 60% in 2010.  The notion is the difference between the 37% higher AR level and the traditional SR level should be top-sliced and recycled from revenue subsidy into capital subsidy for new housing development by the social landlord.  

In short, this is government telling SRS landlords get the capital subsidy to develop new housing by charging tenants more in rent.  Sweat the tenant not the government!

How do those tenants paying the affordable (sic) rent level feel about being overcharged and paying more than they need to in order to subsidise future tenants? 

I leave that as rhetorical and first turn to the actual rent levels. The official rent data of SRS landlords is by each local authority area and below I present for ease of illustration for each of the nine English regions with the average social rent (SR) amount and the average affordable rent (AR) level amount. This is for the current financial year 2023/24.

On the regional basis we see a range of so-called ‘affordable’ rent being between 26% and 71% higher than the traditional rented housing of council and HA landlords.  

The ‘affordable (sic) rent’ level is – supposedly – no more than 80% of the local gross market rent level (GMR) and this is hugely problematic for many reasons. 

Firstly, what is the local GMR level?  The discrepancies between what SRS Landlord A says it is and what SRS Landlord B assesses it are wide and stark and there appears no scrutiny by any external regulator of these very different assessments by SRS landlords.  I will spare you the details, which are numerous, but read my discussion of the 3-bed AR level in Reading below

Secondly, the overwhelming majority of new developments are set at the much higher AR level and the SR and traditional level for any new housing has all but vanished.  Whether this is financiers dictating to SRS landlords for a greater return on their investment or whether this is SRS landlord commercial greed is a moot issue.

Thirdly, there is a public purse issue, as ALL of the AR rent can be paid by the taxpayer in housing benefit because AR is deemed a social housing tenure.  This means that wherever the Local Housing Allowance (LHA) – the private renter version of housing benefit – is 79% or less of the local gross market rent (GMR) then more housing benefit is paid to the SRS landlord than is paid to the PRS landlord.  

In very simple terms imagine the full GMR weekly rent is £100 and the LHA rate is £75pw which means £75 per week is paid by the public purse in housing benefit to the PRS landlord.  The affordable rent charged by the SRS landlord is set at 80% of GMR and £80 per week and so £80 per week is paid out in housing benefit.

In 2017 I did a ‘deep-dive’ into the Statistical Data Return for 2016/17 which is the actual rents charged by property size and by AR and SR which all SRS landlords return each year to government. 

I posted about it on numerous occasions and one occasion was here which detailed that Clarion Housing Group were charging £442.88 per week for a 3-bed general needs property in Reading.  

As AR is deemed social housing all of the £442.88pw of 7 years ago was and still is payable in housing benefit and by the public purse.  Yet today in FY2324 the maximum in housing benefit (LHA) payable for a 3-bed in Reading is £264.66 per week.

The SDR for that year revealed other SRS landlords in Reading setting a rent of  £245 - £319 per week for a 3-bed AR property

Fourth – and most heinous – there is the SR to AR conversion with the policy having a built-in incentive for SRS landlords to evict existing tenants.  

To explain, once an existing tenant paying the traditional social rent (SR) level leaves and for whatever reason, the exact same property can be re-let to the replacement tenant on the affordable (sic) rent AR level. 

Looking at the table above this means the London SRS landlord can get rid of the tenant paying £584 per month and replace with a new tenant the very next day who is charged over £1001 per month.  

That is one hell of an incentive for SRS landlord to find ways to evict all current tenants paying the traditional social rent level of rent. 

Did you know official government data reveals more SRS properties have been ‘converted’ from the social rent to affordable (sic) rent than SRS properties sold under the Right To Buy (RTB) between 2012 and 2019?  

 

When a social housing property is ‘converted’ from the traditional social rent level to the misnomer of the affordable (sic) rent level such properties no longer are affordable in the dictionary definition of the word.  

All of these 116,243 SR to AR conversions mean an overnight rent increase averaging between 26% and 71% as my first table above reveals.

Imagine a private landlord evicts a tenant to replace them with a higher paying replacement tenant.  

The private landlord is rightly condemned as a money-grabbing heartless b*stard … 

... yet this has been done more than 116,000 times in 7 years by the so-called good guys of the social landlords who have been incentivised to do precisely that by government!

Now these so-called ‘good guys’ who also state and restate that they are ‘social’ landlords who have social purpose coursing through their veins and who will always house those most in housing need (blah, blah, fucking blah) are having an ‘affordable housing’ awards event celebrating that they are greedier bastards than the proverbial greedy bastard private landlords they howl outrage towards at every turn!

Summary

The above are just a few reasons why I am more than willing to publicise a rightful protest against these ‘good guys’ for an awards ceremony on the charade that is affordable (sic) housing and an awards ceremony which is also paid for out of SRS tenant rents.

 

 

 

 

 

Starmer's pledge for 300k new properties per year? What the darn pesky facts say!

Starmer Labour claims it will build 300,000 new houses per year and 1.5 million in its first 5 year parliamentary term.  Here I look at how likely that is using past house-building data and (darn pesky) fact.

Firstly, the 300k / 1.5 million claim is an intention to build new houses not the increase in overall total housing units available.  If 1.5m are built and 1.5m are demolished then there is a zero increase.

 Secondly, and with relevance to my first point, the last ten years of the last Labour government from 2000 to 2010 saw 277,560 newly built social housing properties yet the total number of social housing properties in England fell by 278,000 from the total SRS properties of 3.953m in 2000 to 3.675m in 2010.

 Thirdly, back to the 300k per year figure: -

• The average number of new homes built by private enterprise in the post war period is 160,000 per year.
• The last time the SRS total was above the 90,000 pledged was in 1980 when 110,000 were built
• The average yearly SRS new build number since 1980 has been 28,874 with a high of 36k in 2009
• IF the SRS pledge is for 90k per year it means that private enterprise needs to build 210,000 per year to make up the 300k per year pledge.
• The last time that private enterprise built 210,000 properties per year was 1968 when 226,000 were built.

                                                                                                [All fully sourced at end]

For private enterprise to move from 160k to 210k per year may well be feasible with the pledged relaxation of planning rules that Starmer Labour has intimated.  Let’s for the sake of argument (and an unholy row over planning laws and NIMBY objections) say this is possible as the real issue is the staggering increase needed in new social rented sector properties built.

The social rented sector (SRS) to go to 90,000 per year from its average of c30,000 per year is a tripling of new housing built or developed by its council and/or housing association landlords than they have achieved since 1980!!

Reader, can I suggest you look out of your top floor or office window and you will doubtless see a pig who has just downed a can of Red Bull if you think that a tripling of new build social housing properties is possible and on a sustained basis.  Flippancy? Unfortunately not!

A nuance is Matthew Pennycook the shadow Labour housing minister has already said that 90k new SRS properties will NOT be developed in the first year of a new (or should that be New) Labour government. If 50k new SRS builds are delivered in Year 1 it still leaves 400,000 new SRS builds over the following 4 years or 100k per year! 

A few years ago (2019) the National Housing Federation (NHF) and the umbrella lobby for housing associations in England said each new SRS build needed a subsidy of£78,000 per property and doubtless this will have increased significantly.  Yet 90,000 lots of £78,000 would be £7.02 billion in subsidy per year that the new labour government would need to stump up and in real terms probably £10 billion per year today is a more accurate ballpark figure 

Where is the £10bn per year coming from for the 90,000 per year social rented sector new build target and pledge?  The ultra conservative (not just in cautious definition) Starmer Labour Party declare they will not make unfunded pledges at all so the question of where this £10bn per year subsidy funding to SRS landlords is coming from is a bit of a mystery – and even more of a mystery when the aim of making 70% of Brits owner occupiers as Lisa Nandy asserted a few months back when she was shadow housing minister, which Starmer ratified today on all the news outlets, sees mere social rented housing as way down the housing priority list for a Starmer Labour government!

I remind again the last Labour government oversaw a 278,000 cut in the English social rented housing capacity and this was despite them giving ‘full’ subsidy levels (the ones the Tories cut by 60% in 2010) and despite reducing the RTB discounts to prevent a loss of social housing by that route.

None of the above is meant to be anti Labour Party or anti Starmer.  It is simply a dose of reality to the extreme delusion and hyperbole the SRS ‘sector’ has rushed to all forms of media to proclaim about the Labour Party conference and the very vague aims it pledged.

Actions always speak louder than words and yet we have no idea and have been told absolutely nothing about where a Starmer Labour government will find the £10 billion per year that is needed for council and housing association landlords to triple their output of newly built social housing!

As I stated earlier the likelihood of private enterprise increasing house-building from its 160k per year average to 210k per year is far easier to achieve, and may well be achieved, than the likelihood of SRS landlords tripling their yearly new house-building average … although rest assured that private enterprise will ONLY develop more new properties per year if it is in their best profitable interests else they will continue to sit on the enormous land-banking reserves until government stumps up the tax or other incentives for them to build.  Again, this is just the reality we know as that is how the system works and has always worked.

 

 NOTES:

The above figures come from the official house-building data compiled by government for the post-war period and specifically Table 241 (which for whatever reason was discontinued in 2018)

 Table 1 – the Last Labour ‘lot’ from 2000 to 2010 by builder / developer 

• 

Table 2 – The 2000 to 2020 position (EHA as sourced)

Ive highlighted the 'last Labour Lot' in green and the 278,000 net loss of social housing properties

What was that reader? Facts are pesky?  You’re darn right they are!

 

 

 

 

 

 

 

 

 

 

 

Housing 2000 to 2020 in England - The FACTS the usual experts don't want you to know

In 2020 there were just 31,000 more social housing properties than in the year 2000. In 2020 there were 2,406,000 more private rented properties than in the year 2000.

These figures (for England only) reveal: 

For every 1 new net social rented sector properties built there were 78 private rented sector properties built over the 20-year period

This is a WTF statement and fact.  The figures are from the English Housing Survey and they also mirror the Census 2021 official data making these facts irrefutable and non-moot.

I used this simple line chart and table of official data last week as part of a long and detailed paper that the social rented sector (SRS) does not ‘do’ fact, indeed consciously avoids it and is a FACT FREE ZONE with its leaders and lobbies choosing to rely on myth and shibboleth.

The SRS propaganda machine tells us daily and this week the SRS myth and delusion is in overdrive due to the Labour Party conference in Liverpool.  One example of scores of similar specious and false claims is below and this from the largest housing association in England

Housing association at the heart of delivering homes you say?

• The 31,000 increase in SRS properties over this 20 year period equates to less than 1 new property per social landlord PER YEAR
• From 2000 to 2020 the size of the social rented sector increased by 0.8% whereas the size of the private rented sector increased by 119%. 
•  The population of England grew by > 7 million in this time (49.2m – 56.5m) ONS 

As a fellow Liverpudlian or anyone would respond when we look at facts and not myth:

The overall point in my fact-heavy and detailed theme of social housing being a FACT FREE ZONE is that by the ‘great and the good’ of the SRS continue to choose not to look at fact, and largely because fact makes mockery of the SRS propaganda, the social rented sector and its lobbies fail to diagnose or scope the problem and in doing so assert ‘solutions’ that sound and read good yet can never work.  The upshot is the never-defined Housing Crisis gets worse by the day.