The Conservative government has a current consultation paper on council and housing association rent increases in England (only) that the 3.9 million English social tenant households should oppose en masse. And it is so simple to do by email.
Why would social tenants NOT oppose a proposal that sees them pay out on average £8,400 more in rent over the next fifteen years? That’s around £580 per year more in rent each year and coincidentally the same £580 per year that benefit tenants have lost out by the social security benefit freeze of the Tories austerity programme since 2015.
How typical that the benefit freeze draws lots of media attention yet there is absolutely bugger all about the shafting of the social tenant that has seen 34% average rent increases (2010 -17) that have been 4 times benefit inflation (8.3%) 3 times wage inflation (10.8%) and double prices or CPI inflation of 16.6%!
The government proposes to increase rents by inflation plus an additional 1% that will see the average social tenant pay £8600 more in rent over the next 15 years than they should. A simple two-minute email response from English tenants can stop this and I am encouraging as many tenants as possible to do precisely that and send an email to SocialHousingRents@communities.gsi.gov.uk opposing this unjustifiable and perverse rent increase.
Some groups of tenants such as disability groups and some London and other tenants groups have become more vocal these past few years yet still remain insignificant in number. Opposing the perverse (see below) proposal to increase rents by 1% more than CPI inflation is a great chance for 3.9 million households with 5 million plus voters to flex their muscles for the first time ever and en masse. All it takes is a two-minute process of sending an email too!
If tenants do this then the government HAS to consider it and especially if they propose the alternative which is rents to increase by CPI inflation only that is a proposal that benefits tenants and government and the taxpayer and guarantees more new housing will be built which is the government rationale for this inflation busting proposal.
Template Letter (feel free to amend)
Tenants can copy and paste the following template letter and email to the email address above of SocialHousingRents@communities.gsi.gov.uk
I am a social housing tenant in England and my post code is [INSERT]
I write to oppose your plan for an inflation-busting rent increase by council and housing association landlords in England for the at least 5 year period commencing April 2020 and do so for the following reasons:
The proposal is perverse as the additional 1% over and above inflation adds an unnecessary 1% to the Housing Benefit (and its UC equivalent bill) that currently stands at £15.07 billion per year.
In the first year, 2020, this adds a further £150.7 million cost to the taxpayer and in the hope – and nothing more than hope – that social landlords recycle this to develop new housing. Yet just 1 in 5 English housing associations actually develop new housing so the proposal gives added rent funding to all HAs yet only 20% use this for new housing. That is perverse and a chronic waste of taxpayer money
I propose an alternative which is to limit social housing rent increases to CPI only and to sweep the additional 1% you propose into a centrally held capital subsidy pot that English social landlords can bid for solely to develop new housing. This guarantees that the additional taxpayer money of £150.7 million in 2020 is used for the intended purpose.
This model – that costs the exact same to government – continues each year and realises a new house building pot of £311m in 2021, £482m in 2022, £663 in 2023 and £855m in 2024. The consultation states the rent increase formula is for “at least 5 years” and so if this alternative model continues it realises a new house building pot of £1.06bn in 2025, £1.27bn in 2026 and reaches over £2bn in 2029. If continued for a further 5 years it realises a centrally held new house building pot of £3.52 billion for the year 2034 in 15 years time.
On a basis of £40,000 capital subsidy per new house built the £3.2 billion in 2034 equates to around 88,000 new houses built by English social landlords and a social housing new build figure last achieved in 1981. Since 2010 all UK social landlords have built an average of 33,040 per year and this alternative use of the exact same HB/UC taxpayer cost you propose will deliver 166% more new housing units.
This alternative as well as delivering 166% more new housing also means government reduces the housing benefit bill by £3.52 billion per year by 2034 with its obvious political advantages as it repurposes the current proposal and removes its perversities and targets taxpayer monies with much greater efficiency.
Additionally, it produces lower rents that are much more affordable to existing and future social tenants. This reduces poverty and allows social tenants to save more and save more quickly for a mortgage deposit and get on the housing ladder. It arrests and then will reverse the UK home ownership rate that has fallen from 71% in 2004 to 63% by 2017 and is one of many advantages to government.
This alternative prevents the supply crisis we have experienced for decades by restoring a programme of capital subsidy that becomes systemic and allows all housing actors to plan with greater confidence. It develops and maximises new house building from the same amount of government revenue funding and it benefits tenants, government and reduces dependency enabling more tenants to take up employment opportunities as their rents become a lower proportion of their income.
In short, this proposal gives a political solution to the UK Housing Crisis elements of undersupply and affordability and costs government not a penny more. I thank you for the opportunity and recommend you consider this alternate proposal carefully for all the above reasons.
Explanation and supporting evidence
What the consultation (here) means for English social housing tenants is illustrated in Table 1 below using the current CPI inflation figure of 2.4% and uses the current All England average weekly rent from the English Housing Survey (EHS) of £102.16:
Hopefully Table I above is self-explanatory and yu can see how the seemingly insignificnt 1% adds an unnecessary rent cost of £8,400 to each social tenant household on average over the next 15 years.
What the figures mean for government are below in Table 2 which reveals the Housing Benefit spend at CPI+1% and at CPI only
Table 2 also reveals the difference in its final column that should go into the capital subsidy housing pot per year for developing social landlords to bid for. Note that when the Tories reduced capital subsidy in 2011 it reduced to £1.13 billion per year and this model sees it become three times that figure by 2034 – all at no added cost to government than they propose to pay out in their CPI+1% perverse plan.
Typically any government housing consultation sees around 300 responses with at least 299 of them (!!) from landlords and the tenant opinion is never heard by Government and that needs to change.
Average social housing rents increased 34.2% from 2010 to 2017 and more than double CPI inflation of 16.6% in that time as the chart (Table 3) below reveals. That needs to change and the power lies with tenants to change that.
The chart above also reveals that social (sic) landlords with their overall average 34.2% rent rises increased their rents by half as much again as the proverbially ‘nasty’ private landlord increases of 23% over the same period!
Never forget that the 3.9 million English council and HA tenancies contain 5 million voters and no government can afford to ignore that. It is time that social housing tenants wielded their huge latent political influence.
The purpose of this post is to inform tenants that they can get involved and how easy it is to get involved as copying and pasting my template letter and emailing it IS a 2 minute action for social tenants.
IF just 1 in every 100 English social tenants did email in this letter it would be 3,900 tenant consultation responses from the 3.9 million English social tenants. It would mean 93% of all responses were from social tenants. The government would have to consider this response that sees English social tenants paying £8,600 less in rent over the next 15 years!
Quite why social (sic) landlords expect preferential treatment in receiving above inflation rent increases year on year when everybody else has to cut their cloth is staggering in its conceit. Working in housing for 25 years this has always amazed me in principle though prior to 2010 has had little impact for those on benefits as HB has typically kept pace with rent inflation.
Yet as the yellow line in Table 3 below shows average HB increased 22% in the same 2010 – 17 period that average social housing rents increased by 34.2%. HB went from paying 94% of rent to an average of 86% of social housing rent in that period and many simply do not realise this impact. It is time they did.
The facts don’t lie only politicians and social landlord apologists do!
Dear social tenants,
It is way past time to send this email and force government and your landlords to sit up and take notice. Tenants the power IS in your hands and you need to wield it. Please don’t just utter “enough is enough” and sit on your arses and moan! It only takes 2 minutes to save £8,400 in future rent …