Is the money tree green enough for social housing?
After weeks of speculation, the Ministry of Housing, Communities & Local Government has published its much-anticipated green paper on the future of social housing. We’ve spent the afternoon working our way through the 70 pages so you don’t have to, and here are five things we’ve learned:
1. The Grenfell fire continues to cast a long shadow over the sector
Accusations of voices going unheard and a lack of accountability have been prominent themes in the ongoing Grenfell Tower Inquiry. It’s therefore no surprise that the green paper tells us to expect a new support programme to help residents engage with their landlords on issues of building safety and mechanisms to give residents a stronger voice on matters of fire safety.
2. Expect a shift in emphasis away from financial viability towards consumer regulation
There’s a lot of talk about “empowering residents” and “sharper teeth” for the regulator to intervene. There will be a review of social housing regulation, with a call for evidence launched today on the current regulatory framework and the introduction of league tables for the sector, with the possibility that these might be linked to grant funding to incentivise landlords. Also expect measures to speed up the complaints process.
3. Words aren’t the same as money
Funding certainty for housing associations and some extra borrowing capacity for local authorities, will be welcomed by the sector. But the cap that prevents councils from borrowing against their asset base to be able to build at scale remains in place. For decades as a country we have failed to build anything like enough social housing (there are almost 1.2 million people on waiting lists, but only 6,000 social homes were built in England last year) and while Government recognising a role for social housing in tackling the housing crisis represents a step in the right direction, there’s no new money being announced here. The green paper succeeds in framing the conversation, but it will take more than words to get more social homes built.
4. When it comes to supply, home ownership remains the priority
The green paper paints social housing as a springboard to home ownership, pointing out that two-thirds of social renters would prefer to own their own home. Shared ownership and other forms of affordable home ownership can certainly play a role here, and it is true that given a free choice most people would want to own their home. But wanting something doesn’t necessarily mean it is realistic, particularly when we have a broken housing market in which the average house now costs almost eight times the average salary.
5. There’s some really good stuff in here, but…
The Government has listened to the sector and dropped two highly controversial policies. Firstly, councils will no longer be forced to sell off their most valuable homes to fund the extension of the Right to Buy to housing association tenants. (It’s not yet clear how this will now be funded). And they have also decided against making fixed-term tenancies mandatory for local authorities. But the Government still appears to see social housing as a short-term safety net and springboard to other tenures, which could undermine efforts to build stronger communities and tackle the stigma around social housing.
This article was written by Matthew Whittley, Account Manager at MPC.