10 COMMENT A CRISIS OF SUPPLY
Patrick Mooney, housing consultant and Housing, Management & Maintenance news editor, says the tiny increase in overall numbers of low rent housing is masking a growing affordability problem in England
Patrick Mooney, editor of Housing, Management & Maintenance
urther evidence of a crisis in the supply of affordable housing has been revealed in official data, as calls for reform of the ‘broken model’ grow with the Government’s focus on building shared ownership and unaffordable rentals in the firing line. Latest figures from the Housing Ministry show that a total of 57,644 new affordable homes were delivered in England in the 12 months to April, but only one tenth (6,566 homes) of these were built for letting at social rents to low-income households. Most of the affordable homes were built either for sale on shared ownership terms or for letting at ‘affordable rents’ or intermediate rents (typically set at 80 per cent of market rents), which most housing professionals say are well beyond the reach of households reliant on Universal Credit (UC), or other welfare payments.
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MINISTRY OF HOUSING FIGURES SHOW THAT NO NEW SOCIAL RENT HOMES WERE BUILT LAST YEAR IN 162 ENGLISH LOCAL AUTHORITIES
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The housing benefit element of UC is calcu- lated to cover the cost of the lowest 10 per cent of rents in the private rental market. If tenants want to move into properties with higher rents they have to somehow make up the difference, either from ‘other elements’ of their UC payments, or from other income, such as loans from friends or family members. The fall in the supply of social homes at the lowest rents is in stark contrast to the situation 25 years ago when between 50,000 and 60,000 new low rent homes were being built each year by councils and housing associations.
NEW LOW RENT HOUSING Worryingly, detailed figures released by the Ministry of Housing show that no new social rent homes were built last year in 162 English local authorities, with counties as diverse as Cheshire, Derbyshire, Norfolk, Kent and Surrey showing zero completions in most districts. In the whole of the north east there were only 58 social rent completions across all 25 council areas, with North Tyneside and Redcar & Cleveland accounting for 60 per cent of the total, while Newcastle, Middlesbrough and Sunderland managed just nine new social rent homes between them. Given the poverty and poor conditions in many parts of the private rented sector, these figures offer little hope to the local populations.
Better news came in the size of the new build starts figure, which showed that 68,346
new affordable homes were started, an increase of almost 20 per cent on the comple- tions figure, but even then this good news was tempered by the fact that shared ownership and affordable rental properties accounted for 70 per cent of the total, albeit this was down from 77 per cent in the previous year. However, there are growing calls from the social housing sector and from campaigning groups and charities like Shelter and Crisis for a far greater share of the affordable housing budget to be diverted away from shared ownership and affordable rents, with the former being increasingly highlighted as a ‘broken’ model.
THE FOCUS ON SHARED OWNERSHIP Anecdotally, people point to things like one and two bed shared ownership properties in the capital being marketed at values of between £500,000 and £600,000, while the shared ownership market has also been badly hit by the cladding scandal, with many shared owners being stuck in properties they cannot sell or re-mortgage, as their homes ‘attract’ zero valuations. At the same time many of the shared owners are facing demands for contributions running into tens of thousands of pounds for cladding removal costs and paying for ‘waking watch’ patrols. The new building safety draft legisla- tion has done little to resolve the problem or to satisfy shared owners who feel they have been badly let down by policy makers and develop- ers, while their landlords claim they lack the
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