Housing Associations – social purpose of the carcinogenic variety

Housing associations are a cancer on the Welfare State creation of social housing …

Now there’s an inflammatory statement if ever there was one yet regrettably there are plenty of facts to support such a contention and the ever more commercial path that housing associations are taking and in such a short space of time sees them live up to their correct name of PRIVATE Registered Providers which is the name given to them by the UK housing regulator

Let’s start with what they built in 2016/17 and the National Housing Federation’s own figures below are revealing: (Source is here)

ha 201617 starts

In 2016/17 a mere 8% of HA new builds were ‘social rent’ just 3,903 out of 47,709.  In 2010 over 90% of all HA builds were for social rent.  That is a huge change in such a short space of time and a huge move away from any definition of social purpose.

Social purpose is the phrase used to describe comments such as “we will always house those most in need” or the 1948 Welfare State slaying of the giant of squalor yet we can see in the above that housing associations built just 8% for this social purpose and indeed built 2 for outright private sale for every 1 at social (purpose) rent.

92% of housing association build in 2016/17 was for higher rent or higher sale than the core product it has had since they began in either their lauded philanthropic roots of which we hear so much from them in marketing blurb, and from the 60% of their stock that are former council housing, some 1.6 million properties, of which we read and hear little from their well-oiled PR machines.

8% is a record low and beat the previous years 12% record low when 5400 out of 40,000 HA builds were for social (purpose) rent … and of course the same well-oiled PR machine was noticeably silent on this.

Housing associations still say they have social purpose coursing through their veins and only yesterday we saw Carole Matthews the CEO of The Riverside Group was opining this social purpose in an article about a Homes for the North meeting … in London (yes irony is just as much alive as delusion) when she said:

Housing associations build where there is clear demand, not the potential for high returns

Riverside announced last month they would not be building any social (purpose) rent housing for the next ten years.  We also have L&Q building 10,000 properties for private rent and many housing associations have private rent and private sales arms under their structures – Private Registered Providers is not a misnomer.

Pretty poor timing from Riverside who have one of the best well-oiled PR machines as it came on the same day the Financial Times ran an article saying the exact opposite with that most philanthropic HA in Peabody building £800,000 homes for sale in the capital.

ukhas ft

“We will always house those most in need” is oft-heard from the well-oiled HA PR machine yet Severn Vale Housing Association (SVHA) the former Tewkesbury Council housing department last year in April 2016 banned anyone under 36 from being allocated a property as a matter of policy – a policy for any council landlord that would be greatly exposed to legal challenge as being a blanket and unlawful one.

severnvale

Note well this says anyone under 36 “… regardless of employment status” too so this is a complete ban not just a reaction to the shared accommodation rate or SAR which applies to social housing from April 2019 in the LHA Maxima Cap policy.

That banning of under 36 year olds will also apply to the 30%* of women fleeing domestic violence and abuse who are single and have no children and end up in refuge and so no exit route into social housing for them in the Tewkesbury area is what this policy means when the LHA Maxima Cap policy begins!

That last point will be of interest to the new President of the Chartered Institute of Housing Alison Inman as this Guardian article of last week reveals in its banner headline:

alison inman domestic abuse guardian

How can housing policy for domestic violence and abuse be centre stage when housing associations by virtue of policy ban its survivors?

You can add the fact that housing associations evict in the same proportion as those ‘nasty’ private landlords they keep discussing and use as proof that they are more benficent and of course have the ethereal social purpose!  As I neatly repeated the facts so simply here:

• UK has 53% private properties and 47% socially rented ones.

• UK evictions show 54% private to 46% social housing evictions.

Evictions in the social sector are staggeringly high and given how much easier it is for a private landlord to evict and they need no reason to evict we actually see a greater proclivity to evict among ‘good’ social landlords than ‘nasty’ private ones!

Then we can add in the fact that between March 2010 and March 2015 housing association rents increased by 34% against CPI inflation of just under 13% in that time and the period saw a 16% private rent increase.  When we extrapolate this it means that housing associations charged and received £2.4 billion over and above inflation as rental income in 2015 alone – enough to build 100,000 social (purpose) rents at a £24,000 subsidy per property.

The purpose and theory behind the removal of grant or capital subsidy is that housing associations mitigate that loss by charging higher rents through the ‘affordable rent model’ and this extra rent or proceeds from private sales becomes revenue subsidy which is recycled to become capital subsidy.  Yet the social (purpose) rent housing fails to materialise and despite this recycled subsidy over and above CPI inflation being enough to build 100,000 houses from that one year alone!

The detail of that is here and is an extrapolation from official figures in the English Housing Survey whose facts are becoming peskier by the day in revealing the HA social purpose argument to be well-oiled from snake oil salespeople.

Even after the Government imposed a 1% rent cut for four years on social landlords the mean or average rent still increased – as the 1% reduction was just on net rent and not on gross rent so service charges increased more to compensate is one reason why this happened as well as the ever more new AR houses coming on stream whose rents will have factored this in.

In summary, it can no longer be argued that all of the above facts are the rants of this critic and are polemical.  Those facts are from official sources and all substantiate the deduction and analysis that social purpose is a chimera and smokescreen and does not exist within the housing association ‘movement’ as it likes to call itself.

__________________________

* Around 30% of women who enter refuge are single under 35 and childless a figure from actual data on the 17 refuges I advised and a figure that other refuges have confirmed as reliable and accurate.  The SAR reduced rate (which is as low as £45 per week in HB in Sunderland) does not apply when in refuge but does when the woman leaves.  So when a HA has a policy of banning allocations to anyone under 36 their ‘social purpose’ they claim to have is exposed for what it is!

 

 

 

3 thoughts on “Housing Associations – social purpose of the carcinogenic variety”

  1. Dear Joe,
    I have read your post and it is such a relief to hear someone from our profession telling the world what is really going on in Housing Associations! I have recently resigned my post as a senior Project Manager for a very large Housing Association as I so disheartened by what was happening to the organisation and the industry in general. For instance not wanting to take 4 bed properties because family would have lots of children, therefore they will be less likely to be working, and so most likely affected by the benefit cap.
    I have set up a new company that is register as a Social Enterprise and we are trying to deliver truly affordable housing with the support of the Local Authority, however it is proving very difficult to break into this monopoly and as you say there is a lot of spin, everyone seems to say the right things but not much substance. I hope those of us that still consider ourselves housing professionals are making efforts in our own small way to ensure pressure is put on these BIG Businesses to come back to their roots in providing truly affordable housing!
    Regards
    Sarah Walker
    Easy Rent Now ltd

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  2. I know that you have an issue with housing associations, but it doesn’t help tarring everyone with the same brush. The reason for the lack of social housing being built is the lack of grant funding available for it. Many associations are reluctantly building the Orwellian ‘affordable’ rent housing to ensure that they continue to develop and have the capacity to build social housing when there is a change in government. I accept that not all are like this though.

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  3. Paul – “I know that you have an issue with housing associations, but …” a classic case of blame the messenger and then disagree with what is said … but (a) no rebuttal of the facts and (b) the same old. same old vague generic response!

    I don’t have a problem with HA’s per se; I do have a problem with lies and deceits and anyone shafting vulnerable people in doing so which is regrettably what the facts reveal. This is much merit in your view that they are not all the same yet I can hardly draft 1500+ posts on the same issue and one for each HA can I. My posts detail the overall picture, the average picture and that is all anyone can do and that average picture as the above facts show is damning and needs addressing rather than the usual lets blame the messenger and other pitiful responses and denials. Facts are facts whether you like them or not.

    I could have added that HA’s because they have no duties to house or rehouse will adopt the SVHA approach with the overall benefit cap and not allocate to around 140,000 new prospective tenants per year that they would otherwise have tenanted but now their HB will not cover the rent. Social purpose and the trite “we will always house those in need” positions will soon have facts to prove.

    Come back with reasons why the HAs have not recycled the £2.4 billion in revenue subsidy into capital subsidy by all means which is how the higher rents to mitigate the removal of capital subsidy is supposed to work yet clearly is not instead of trotting out stock excuses (and they are more excuse than explanation). Finally I agree with you that the vast majority of HA workers and staff find this regrettable … all apart from 1500 finance directors that is

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