LGA: Two-Decade Social Home Build Could Have Saved Renters Billions

Building 100,000 government-funded social rent homes a year over the past two decades would have cut ‘billions’ from the housing benefit bill, new analysis reveals. The Local Government Association (LGA) said its new research ‘provides evidence’ for why the government should use the Spending Review to work with councils to ensure that the genuine renaissance in council housebuilding needed to ‘increase housing supply’, ‘boost affordability’ and ‘reduce homelessness’, is a success. According to reports, the LGA have also said that a boost in social housing over the last twenty years would have provided higher disposable income for tenants and generated ‘significant economic returns’. Read more on the LGA website.

https://www.local.gov.uk/about/news/building-social-housing-over-20-years-could-have-saved-renters-ps18-billion

RTB Properties Re-Let Privately Pose ‘Major Challenges’

One of the most contradictory and problematic developments in private renting lies in the growth in Buy to Let tenancies on council estates, a new report says. Published by the London School of Economics and Political Science (LSE), the report identifies the anomaly that sees councils housing homeless families in former Right to Buy properties converted to private rental. According to the report, around 40% of all Right to Buy properties are now re-let privately, posing “major challenges” for housing management in driving up Housing Benefit bills and maintenance problems on flatted estates. Download the report, Private Renting: Can social landlords help?, from the LSE website.

http://sticerd.lse.ac.uk/dps/case/cr/casereport113a.pdf?from_serp=1

Affordable Housing: Construction – Parliamentary Written Answer

Lord Taylor of Warwick: To ask Her Majesty's Government what assessment they have made of the claim by the Centre of Social Justice in its report, A Social Housing Strategy, published on 27 October, that designated affordable new homes do not reduce the housing benefit bill.

Lord Bourne of Aberystwyth: We have not directly carried out an assessment in response to the claim made by the Centre for Social Justice. However, new affordable housing reduces pressure on the Housing Benefit bill by enabling people to live in sub-market rent homes which, on average, have lower associated housing benefit costs than the Local housing Allowance on an equivalent home in the private rented sector.

https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2018-10-29/HL11102

Housing Benefit Bill ‘To Hit £71bn By 2050’

The housing benefit bill will rise to £71bn a year by 2050 unless levels of social housebuilding increase, an influential thinktank has warned. Analysis by the Centre for Social Justice’s (CSJ) housing commission predicts that half of that money will go to private landlords. People receiving housing benefit while living in the private rented sector cost the taxpayer 25% more on average than those living in social housing, researchers said. And they warned that affordable housing products – such as affordable rent, which can be up to 80% of market rates, or shared ownership – “will do nothing to reduce the burgeoning housing benefit bill”. Download the CSJ’s analysis.

https://omghcontent.affino.com/AcuCustom/Sitename/DAM/108/CSJ_-_A_SOCIAL_JUSTICE_HOUSING_STRATEGY.pdf

Housing Benefit Bill Set To Double As More OAPs Rent Through Retirement

Taxpayers face a multi-billion pound bill as they try to keep a roof over the heads of more middle-aged and older renters priced out of the property market. Soaring house prices have left many middle-aged renters without a chance of getting on the property ladder. The proportion of people in the 35-44 age group privately renting has doubled from 13 per cent in 2007 to 26 per cent last year, the Office for National Statistics said. The percentage of 45 to 54-year-olds renting rose from 8 per cent to 14 per cent over the same period. Failure to tackle the housing crisis will push the housing benefit bill up to £16bn by 2060. Read more on the Politics Home website.

https://webcache.googleusercontent.com/search?q=cache:Hk1ifRx8J7kJ:https://www.politicshome.com/news/uk/communities/housing/news/95121/housing-benefit-bill-set-double-taxpayers-more-oaps-rent+&cd=4&hl=en&ct=clnk&gl=uk&safe=vss

Spending On New Homes Plummets While Housing Benefit Soars

Government investment in building new homes has plummeted while spending on housing benefit has soared. In 2015/16, just 4.3 per cent of the government housing subsidy went towards measures to boost new building – down from 82 per cent in 1975/76 – while 95.7 per cent went on housing benefit and support for mortgage interest (up from just 18 per cent 40 years earlier). The vast majority went to housing benefit, with support for mortgage interest accounting for around £200 million. The extent of the shift is revealed in the UK Housing Review 2018. The review shows that investment in social housing has dropped from £13.7 billion in 1979/80 to 5.1 billion in 2016/17, in today’s prices. Read more on the CIH website.

http://www.cih.org/news-article/display/vpathDCR/templatedata/cih/news-article/data/Spending_on_new_homes_plummets_while_housing_benefit_soars_new_analysis

Housing Money Wasted 'Propping Up Rents'

Taxpayers' money is being wasted on "propping up rents" in a "failing housing market", a report says. The National Housing Federation report highlights how money spent on housing benefit rose from £16.6bn in the mid-1990s to £25.1bn in 2015-16. It added that since 2011, no government money has been made available to build homes in England for low paid people to rent. The government said building more homes was its absolute priority. Read more on the NHF website.

CLG Urged To Shape Up Over New Homes

A government that spends around £21bn each year on housing benefit does not know what contribution this money makes to the supply of new housing. Now, a key Commons committee has put the CLG on notice, wanting a report back within a year on identifying metrics that can be used to establish the full impact of housing benefit on building new homes and scope for this financing to be used more innovatively to increase housing supply and home ownership. The Public Accounts Committee says it specifically wants to see research into the estimated £8bn in housing benefit a year spent on subsidising rents paid by tenants in the private rented sector.  Read more on 24housing.

Landlords Call For Supported Housing Funding Changes

The government should cap supported housing management costs and stop funding them through housing benefit, a group of 100 housing associations has recommended. Umbrella body Placeshapers said the management costs charged by supported housing providers “would require a new, separate funding stream outside of ongoing housing benefit… capping management fees and clear parameters for eligible services”. In its response to the National Housing Federation’s (NHF) consultation on the future funding of supported housing, Placeshapers said such a move would address fears that the housing benefit bill is “out of control”. Read more on the Placeshapers website.

Selling Off Affordable Homes ‘Would Add £4bn To Housing Benefit Bill’

The government’s proposed sell-off of thousands of affordable homes could add more than £4bn to the housing benefit bill over the next 30 years, Labour has claimed. The sum emerged from an opposition analysis of the housing bill. The bill calls for the sale of low-rent housing, which the housing charity Shelter has estimated will mean the loss of 19,000 council homes and 66,500 housing association homes. “If you sell off genuinely affordable homes and don’t replace them, then people on lower incomes will be forced into more expensive private rented accommodation and this will mean higher housing benefit spending to cover the cost,” said John Healey, shadow secretary of state for housing. Read more on Welfare Weekly.

Five Big Concerns About Pay To Stay

Parliament must look long and hard at the potential impacts of the Government’s proposed Pay to Stay policy, part of the Housing and Planning Bill. Shelter is not against the principle of some social housing tenants paying slightly higher rents, depending on their income and household need. But we are very concerned that doing it in this way risks taking a sledgehammer to a nut and finding there is little of the nut left at the end.  We have 5 big concerns about Pay to Stay:

1.  It will increase the housing benefit bill

2. It will weaken incentives to work

3. It will price out nurses, paramedics and teachers

4. It will create a costly, bureaucratic headache

5. ‘Higher income’ social tenants will be unable to afford to buy

For more details go to the Shelter blog.

Rising Rents And Low Wages Fuel £25bn Housing Benefit Bill

Britain’s estimated £25bn housing benefit bill for 2015-16 is being fuelled by soaring rents in the most prosperous parts of the country as workers struggle to find affordable accommodation, new research has found. Welfare spending is growing rapidly in boom areas of the South-east of England, largely driven by the growing cost of housing benefit payments. A report calculates that almost one million jobs have been created in the UK’s cities since 2010, but average annual wages have dropped by £1,300 per person, making it more difficult for workers to make ends meet. Despite the record employment levels, spending on housing benefit in better-off cities such as London, Cambridge, Bournemouth and Milton Keynes has risen 50 per cent more than in lower-wage cities such as Glasgow and Liverpool. Read more on the Independent website.

The Tories Are Building A Housing Crisis - John Prescott

When Labour left power in 1979, 42 per cent of Britons lived in council homes. Now it’s under eight per cent. So we subsidised a small minority of people to buy their own homes instead of helping others get a roof over their head. And here’s the kick. More than 30 per cent of those ex-council houses have been sold to private landlords who now charge a fortune renting them back to the poor. So we end up paying over the odds in housing benefit when it would have been better to fund housing associations and councils to build more social housing. These discounts and subsidies wasted more than £40billion of taxpayers’ money. They have created record levels of homelessness and B&B households. Read more on the Sunday Mirror website.

1,000 Council House-Building Plan Cut To Just 78 Homes

Reading council’s ambitious plan to build 1,000 council houses over 30 years has been cut back to just 78. The business plan to start the scheme was drawn up by Reading Borough Council through its housing revenue account in April and demolished by Chancellor George Osborne in July in his emergency budget. The chancellor’s rent reduction for council and social housing tenants of one per cent per year for the next four years - intended to cut the housing benefit bill - meant the figures for 1,000 homes no longer added up. Read more on the Get Reading website.

Housing Benefit Cuts Could See Claimants £500 A Year Worse Off

Cuts to housing benefit – now seen as the Treasury’s preferred alternative to cutting tax credits – are likely to damage similar groups of in-work poor claimants by depriving them of more than £500 a year, suggests fresh research by the Institute for Public Policy Research. The research indicates if the chancellor makes all housing benefit claimants pay the first 10% of their rent from their own funds, he will save around £2.4bn a year, but hit 4.8 million households. The housing benefit budget has risen in recent years and now costs the Treasury £25bn. Their analysis comes as George Osborne has been forced by a Conservative backbench rebellion to backtrack on his plan to cut tax credits. Cutting housing benefit entitlement could help make up the shortfall. Read more on the Politics Home website.

Duncan Smith's Great Council House Giveaway

Millions of council tenants could become the owner of most of their home for free, under a plan being pushed by work and pensions secretary Iain Duncan Smith. Tenants living in local authority housing for three years would be handed 70 per cent of its equity then rent the rest of the home, in a scheme to slash the housing benefit bill. Mr Duncan Smith wants to reduce welfare spending, and this Right to Shared Ownership idea is being considered. The stake would be equivalent to discounts under the Right to Buy scheme – up to 70 per cent of the value, or a maximum of £103,900 in London and £77,900 outside the capital. He believes it could unleash a new generation of part-home owners as well as slash the £25billion a year housing benefit bill. Read more on the Daily Mail website.

Osborne’s Housing Gamble

George Osborne is taking some big gambles on housing policy which may or may not pay off. One major gamble he’s considering at the moment is what to do with the Affordable Homes Programme. In 2010 this budget was cut, as part of the broader deficit reduction programme. To reduce the impact of the cut, Osborne changed what could count as “affordable”, allowing rents as high as 80% of the local private market to continue to fund some new development. Renters had to pay more, but so did taxpayers through the housing benefit bill, and crucially some homes for rent still got built.  Osborne is now considering going even further in his reforms. In his 2015 conference speech he said: “this autumn we’ll direct our housing budget towards new homes for sale.” This indicates another big change in affordable housing policy. Read more on the Shelter blog.

Labour Hit Back At Cameron’s “Record Of Failure” On Housing

Labour’s Shadow Housing minister John Healey has slammed the “five years of failure on housing” since Cameron took office. He said: “Over the last five years with David Cameron in charge the Conservatives have completely failed on housing. They claim to be the party of home ownership but it has fallen every year for the past five years and is now at its lowest level for a generation – for those under 35, it’s down by over a fifth. Their record of failure has also seen rapidly rising rents, more homelessness, higher housing benefits bill, and fewer homes built than at any time since the 1920s. After five years of failure on housing, the millions of people struggling to cope with their housing costs deserve a real plan for more affordable homes to rent and buy. And the country needs a new wide debate about how our deepening housing crisis can be tackled.” Read more on the Labour List website.

Extending Right To Buy To Cost £6bn By 2020

Extending the Right to Buy to housing association tenants will cost £6 billion over the next four years as almost 100,000 households take up the offer. It is forecast that around 24,000 housing association tenants a year will buy their home with an average discount of £63,271 under the Right to Buy extension - the discount would cost £1.5 billion a year. The Local Government Association (LGA) is warning that the offer must not be funded by forcing councils to sell-off their social housing, which would drive up rents and the housing benefit bill and lower the capacity of councils to build more homes and tackle waiting lists. It is crucial that councils are able to retain 100 per cent of receipts from the sale of any council homes to reinvest in the desperately needed homes across the country. Read more on the LGA website.

Social Rented Housing – Parliamentary Written Answer

Alex Cunningham:To ask the Secretary of State for Communities and Local Government, whether he plans for the one per cent reduction in social housing rents announced in the Summer Budget 2015 to apply to (a) supported accommodation claimed as specified accommodation under the Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014 and (b) other hostel accommodation for the single homeless.

Mr Marcus Jones:In order to reduce the Housing Benefit bill, the Government has taken the decision to bring rent increases within the social sector back into line with the private rented sector. But we acknowledge that there may be some circumstances where the rent reduction policy should not apply. In particular, the types of accommodation that are current excepted under the Rent Standard such as specialised supported accommodation are likely to remain excepted. We are considering whether the existing definition is appropriate in light of the revised policy and will be setting out the details in legislation.