Osborne, the Budget and Social Housing

Just 15 months from the next General Election and the political posturing is in full swing.  In the 2014 Spring Budget George Osborne announced a number giveths notably:

  • An increase in the threshold for 40p income tax from £41,450 to £41,865
  • The removal of pretty much all tax restrictions on pensioners’ access to their pension pots
  • And my favourite – Beer duty cut by 1p a pint

However in terms of housing there was scant little in terms of announcements.  The extension of the equity loan part of help to buy being the main highlight for the generation rent lot.  That carrot of home ownership is still being dangled. Just hope mummy and daddy can give you a hand.

The main taketh however, and easily the most eye-catching announcement for social housing providers, was the cap on overall spend on the welfare benefits system (excluding the state pension and Jobseeker’s allowance payments). Given that typically 50-60% of households living in social housing receive housing benefit (which is included in the cap) social landlords may be getting close to squeaky-bum time.  Particularly as direct payments and universal credit haven’t hit yet and they are already feeling the pinch.

Yet even more is expected to come.  The under 25s, that feckless, largely non-Tory voting bunch of students, bohemians and vagrants (in short my sort of people), are being eyed for exclusion from the right to housing benefit.  Whilst dark mutterings about the further reduction of the benefit cap, currently standing at a mighty £26,000 per annum (for a two parent household) to just £20,000 have refused to go away.

Both of these changes would severely impact on the means by which younger social housing tenants and work-less households pay their rent.  This in turn will increase the arrears of social landlords and reduce their ability to build, support local communities and generally fill in for the state where it is being lazy/has no funding.

On top of this ministers expect social landlords to build more with even less central government money and are threatening to take action against those organisations who do not develop.  The mantra of develop or die* has returned, albeit with a new edge.

*Note to the uninitiated, develop or die was a ballsy mantra taken up by the sector during the heady years of lots of government grants and a care free approach.  The bar was open, the drinks were plentiful, yet like your dull uncle Trevor a few didn’t sip from the trough.  As the sector grew a large number of these organisations were swallowed up by the bigger fish.  Now an even bigger fish, i.e. central government has turned up and the cat is definitely amongst the pigeons, or maybe the fish… Too many animal analogies methinks, anyway get building or get merging (if you are a small social landlord).

Social Housing – Why?

Over the past 4 years I have both studied and worked in the wondrous world of social housing. It is a sector that is in equal parts frustrating, exciting and bewildering.  Nearly half a decade on I am not really any closer to being able to succinctly define what the social housing sector is about.  But for you folks, through a series of blog posts, I will try to do just that.

Social Housing – The Why?

The reason d’etre of social housing organisations is to provide subsidised housing to the poorer sections of society.  As a consequence the sector houses higher numbers of the disabled, the work-less and marginalised.

Social Housing – The What?

Typically social housing organisations provide

  • General Needs housing – if you are poor, you’re in
  • Affordable Housing – if you are poor, you can’t afford it, if you are rich you don’t want it
  • Intermediate Rent Housing – professional types unable to afford full private rent or save towards home ownership
  • Private sales – same as any private property developer, build and sale boys!
  • Sheltered accommodation – where you send Gran when you can’t be arsed to look after her anymore
  • Supported accommodation – for the severely disabled

However the sector is increasingly diversifying the types of housing it offers.  Many of the bigger organisations now offer everything from General Needs housing to Private Sales and Student Housing.  Though the case of the ill-fated Cosmopolitan Housing Group highlights that may not always be a shrewd move.

The Future

The sector is ever changing and evolving and with the current plethora of welfare reforms hitting it is likely the sector will change further.  Buckle down and sit tight kids, this ride is likely to get rough.

Hopefully that has given a very brief overview of what social housing provide, I will move onto what they exactly do beyond simply ‘giving’ houses to the undeserving poor in next week’s post.