While the government has every right to challenge received wisdom on social housing, it should engage in meaningful dialogue with councils and housing associations, who could be willing partners in delivering the new affordable homes that are so desperately needed, especially in London and the south-east.
Imposing cuts on social rents may help reduce the housing benefit bill but will leave councils and housing associations with less scope for housing investment. Using the sales receipts of high-value council voids to fund the right-to-buy for housing association tenants will have a negative impact on future social housing supply overall. However, in the Budget and productivity plan, George Osborne has raised some points of principle that merit further discussion.
First, is it right to continue with the practice of a fixed social rent level for a home of a given size, regardless of the tenant’s level of income? A single giant leap from social to market rent once a tenant’s income passes a given threshold may be unwelcome, but some level of means testing against a sliding scale of rents might be perfectly acceptable, even to tenants themselves.
Indeed, a policy of variable rents could enable councils and housing associations to raise more money for both planned maintenance and new build. It is therefore to be regretted that the chancellor’s proposal would in fact remove this possible opportunity for additional housing investment by local government, as only housing associations will be allowed to retain the additional rental income they generate from their better-off tenants.
Second, given the shortage of affordable housing in many parts of the UK, it is reasonable to ask whether every new social housing tenancy should last a lifetime, regardless of individual circumstances. For some, a fixed-term tenancy of two or three years at a social rent might enable them to stabilise their housing situation for a subsequent entry or return to the private sector.
Given the acute shortage of family units in many places, a related question worth asking is should tenants acquire the right to a specific dwelling or rather the right to be housed in a flat or house that meets their changing needs over time?
Third, more land does need to be released for housebuilding, but the challenge for councils as planning authorities is balancing the desire for more, specifically affordable housing with concerns over the impact of large developments and increased density.
The mayor of London or a new combined authority may find it slightly easier to make unpopular decisions for a particular locality but these will still rank among the most delicate of political judgments.
Graeme Gordon, independent consultant