There is more chance of having a dinner party with a Unicorn than ever seeing the return of council housing. Is that an outlandish statement reader or will you take no more than a few minutes to read this post which explains why, in irrefutable terms, and using irrefutable facts, that this is an inevitability?
The Tories have bought off every local council from ever returning to council housing, something the Labour Party pledge to build 100,000 council houses per year does not see out of ignorance and the concept of irreversible austerity.
There are two types of austerity in reversible austerity and irreversible austerity so why is the focus always on the reversible and not the much more damaging irreversible and endemic austerity?
- Reversible Austerity – Getting rid of the Bedroom Tax or the Overall Benefit Cap policies or a number of the Universal Credit policies such as the two-child limit are reversible. The offensive impacts and consequence are halted and reduction to especially Housing Benefit which leads to the arrears – eviction – homeless pathway is halted.
- Irreversible Austerity – Rent!
If the affordable rent regime was halted, that today sees 11% of housing association properties at an average 44% higher rent than the social rent level, we would still have 11% of so-called social housing properties at these much higher rents which would never reduce.
The 230,000 general needs properties and a further 14,000 sheltered housing ones would not have their rents reduced and we still have an endemic ongoing affordability problem and a Housing Crisis.
If the policy of local councils setting up their own private landlord companies known as LHCs (Local Housing Companies) was reversed and these LHCs also charge the affordable rent level and even full market rent, those rents would not reduce and we still have an endemic ongoing affordability problem.
My home city of Liverpool is planning 10,000 such properties, barking and Dagenham is planning 42,000 and almost all councils have or are developing their own private landlord company.
The LHC construct of a council being a private landlord is why we will never see a return to good old-fashioned council housing and the apparent Labour Party policy of building 100,000 council houses a year can ONLY be built in Cloud Cuckoo Land. We will never see a return to council housing as the Tory government has bought off all local councils even those that are Labour run and controlled with the Local Housing Company policy and this is the most heinous form of irreversible austerity.
Liverpool City Council set up its private landlord company called Liverpool Foundation Homes Limited a few years ago and it intends to develop 10,000 properties by 2030 which would make it the second largest landlord in the city after Torus (formerly LMH, formerly council housing) and, it will add to the 30% of all housing in Liverpool that is owned by the private rented sector landlords making Liverpool a city that will always have 35% of properties being the PRS.
Liverpool will NEVER achieve the national average of 64% of all housing being in home ownership is also what this means too!
Foundations, as it is known, by virtue of being a private landlord can only use the same no-fault-eviction tenure (AST) that other private landlords operate and there is no security of tenure and much lesser tenant rights than with a council or HA landlord. Yes that means the council owned private landlord which promotes itself as ethical can evict without any reason needing to be given!
Foundations recently opened its first development called Harrington Row of fourteen 3-bedroomed terraced properties in Dingle in the south of Liverpool, which is and remains a working class area fully of back to back terraced houses. If you can remember the TV Series Bread it is 800 yards from where Harrington Row is located. In short, it is not an ‘above average area’ to be tactful.
How many know that the cast of Bread (above) sees the vicar Giles Watling who is now a Tory MP and responsible for the affordable rent and Local Housing Company regime?
The blurb from Foundations (and which reveals the so-called 3rd bedroom size is over 10% smaller than the 100 year-old Homes fit for Heroes Tudor Walters standard of 65 square feet of floor space!) says the rents are set at the affordable rent level which has a legal maximum of 80% of market rent and those rents were initially advertised at £575 per month which then changed to “from £550” per month. Let’s examine those figures and claims to illustrate a very significant point.
Official figures are published yearly by the Regulator of Social Housing (RSH) that details the actual rent levels charged by housing associations in every local authority in England and called the Statistical Data Return. Other official rent figures are released for council landlords though Liverpool has no council housing so I will compare to the SDR18 figures for housing associations in Liverpool. These reveal:
- The average 3-bed HA property at the social rent level is £388 per month
- The average 3-bed HA property at the affordable rent level is £460 per month
- Extrapolated the 3-bed property at market rent is £575 per month
- The maximum LHA or private landlord housing benefit is £525 per month
Yet Foundations, the private landlord company wholly owned by the City Council is charging £575 per month in rent which is the market rent level when the £460 per month affordable rent level is 80% of market rent.
This £575 per month Foundations rent – which is £132.24 per week – is above the maximum LHA housing benefit level of £120.82 per week which is what Foundation tenants on benefit would receive and so the City Council is operating No DSS as the benefit tenant cannot afford the alleged affordable rent level and would be refused these properties.
IF Liverpool City Council was to revert to being a council landlord as the Labour Party policy of building 100,000 council houses per year intimates, then Liverpool City Council instead of getting £575 per property per month in rent would only get the social rent of £388 per month in rent. Liverpool City Council operating council housing would get £2,244 per year less in rent per property and 46% less in rent per year.
Moreover, every penny of council rent income that LCC would get as a council landlord would have to be ring-fenced and spent entirely on council housing. Yet LCC operating as the private landlord called Foundations can spend profits from Foundation rents on anything it chooses and with no constraint or regulation to stop this which would apply as a council landlord.
To finish on Liverpool and why no council housing as we know it will ever be built ask yourself the following question:
What local authority of ANY political persuasion would choose to revert to council housing and take a 46% cut in income?
The answer to that question is none and note particularly well that the affordable rent regime and the Local Housing Company regime are entirely 1005 optional and a CHOICE
I have previously written about the LHC regime in Dagenham and Milton Keynes so the illustration using Liverpool above is happening country wide and endemic.
The affordable rent regime and the Local Housing Company regime are classic examples of irreversible austerity with the extremely regrettable consequence of the death of new council housing that is central not to Labour Party policy but also to solving what we call the Housing Crisis.
The cross-party independent Shelter Commission earlier this year stated (cautiously) we need at least 155,000 new homes per year and at least 90,000 of them need to be social housing and this dictates a huge increase in council housing … yet housing associations have never in their history built more than 32,000 social homes to rent in any year.
The Tories in buying off councils with the LHC regime (30 pieces of silver) have not only ensured that council housing never gets built they have ensured that the Housing Crisis we have will always get worse! As such this is not a political posit but a social one that is apolitical and the Housing Crisis of both supply and affordability are going to get much worse and directly because of the Tory AR and LHC regimes.
To emphasise that I posted a few weeks ago that the affordable rent regime means that a nurse or teacher who are lone parent with one child household would need to pay out 43% of their total NET household income (wages and tax credits and child benefit) for a 2 bed affordable (sic) rent property in Salford, and 49% in the equally low rent area of Exeter for a 2 bed affordable (sic) rent property.
Yet just two weeks ago saw John Healey, the shadow housing secretary outraged that private landlords were charging yong people 33% of GROSS income and revealing how ignorant the Labour Party is of key workers needing to spend 49% of NET income on social housing’s affordable (sic) rent product!
In short, the irreversible austerity called the affordable rent regime means the current teacher and nurse and other key worker shortages we have will only get worse as key workers can’t afford social housing at the so-called affordable rent level. That is irreversible austerity of the worst kind and a kind that even the most ardent right-winger and member of the shady Tax Payers Alliance can see is totally unacceptable.
The Labour Party policy on the affordable rent regime is ignorant and says it will ban affordable rent conversions and nothing more. These ‘conversions’ that account for over half of all AR properties is where the existing tenant of a 2 bed social rent property paying £122.08 per week in rent leaves and the HA charges the new replacement tenant £335.01 per week as they convert the exact same property overnight from a social rent property to an affordable rent property.
The above are exact and official figures for a 2 bed property in Bromley managed by Clarion housing association (UKs largest HA landlod and who had 11,903 AR properties in 2017/18) and the rent TRIPLES overnight for the exact same property. How social are social landlords eh!
Labour policy is of course right to ban these conversions which sees the Tories affordable rent regime give the purportedly social landlord a massive financial incentive to evict all tenants paying the social rent level. Yet the Labour Party in not seeking to ban affordable rent altogether is ignorant of the fact that a newly qualified teacher with one child will have to spend half of their NET income to afford a 2-bed property in low rent Exeter and many other low rent areas of England.
Moreover, as I have stated, even if Labour or any other government bans the affordable rent policy and regime we will still have 11% of all housing association properties at this level and where the distinctly unaffordable rent will not reduce! Note too that in some LA areas as much as 30% of all HA properties are the affordable (sic) rent property!.
In conclusion reader, Imagine I have just been hit by a bolt of lightning and my brain has been frazzled and I become the typical Daily Mail reader …
- Social landlords are operating No DSS to the benefit tenant with affordable rent goes the headline and my response is … good let the lazy bastards get a job!
- Nurses are unable to afford social housing because of affordable rent is the headline to which the response is the Jeremy Clarkson one of take out all housing association chief executives and execute them in front of their families!
These are both the exact same issue of the irreversible austerity of the affordable rent regime – and while the truly ignorant and incompetent Labour Party allow themselves not just Daily Mail readers to believe the only consequence of the affordable rent regime is the first bullet point and not the second then the greater the damage will be as housing association and council landlords, the ordinary ones and those who have private LHC constructs – will develop even more social housing and a greater percentage of what we misterm social housing will become unaffordable.
As a pacifist I would never recommend th Jeremy Clarkson ‘solution’ that you shoot any politician or housing person who mentions the word affordable in the context of rent. I merely ask you recognise that it is a deceit and bastardisation of language, as is the word social when used as an adjective ahead of housing, landlord and purpose.
There isn’t a hope in hell that new council housing will be built and hell is where housing and the Housing Crisis is going and in a handcart with the affordable rent regime and the Local Housing Company regime of the Tories.
Definition of LHC (from Tories Social Housing Green Paper 2018)
NB: LHCs been around since 2011 and the above definition uses the word “commercial” which means private.
The Companies House record of Liverpool Foundation Homes Limited revealing this is a private limited company and private landlord organisation
The Milton Keynes example of LHC from earlier this year:
As you can see the increase in rental income per property is £413 per month and £4,956 more in rent per property per year in Milton Keynes and puts my earlier question into even starker context:
What local authority of ANY political persuasion would choose to revert to council housing and take a
46% cut £4,956 per year cut in income?
You still think new council housing will be built reader?
You care to read my post about LHCs called Barking Mad in Dagenham from two years ago which detailed the exact same issue?
You care to re-read my post entitled Social landlords to more than double rent in the housing white paper from 2017 which also said the same?
I was stating the bloody obvious then just as I am stating the bloody obvious then of there isn’t a hope in hell’s chance of new council housing being built and the Tories have bought off ALL local councils with their LHC regime and policy.
This is IRREVERSIBLE AUSTERITY that the incompetent Labour housing secretary John Healey and his team of staff and policy wonks have STILL to see the bloody obvious that is staring them in the face and has been for years!
Below is the first part of a table produced back in 2016 about LHCs
You will see how (and why) I emphasised Barking and Dagenham with their intention of 42,500 over 15 years and 2,833 per year. Now let me bring you the actual figures for LB Barking & Dagenham.
The same official SDR18 figures reveal that a 3 bed at social rent level there charges £133.58 per week. It also reveals a 3 bed at the affordable rent level charges £202.64 per week. This is £69.06 per property per week more in rental income for the council;s private landlord company. It is £300.29 per property per month more in rent by using the private landlord vehicle called the LHC. It is £3,603.45 per property per year more in income for the council to use the LHC vehicle than revert to being a council landlord.
Now the £3,603.45 more per property per year when developing 2,833 such AR properties per year means the council gets a staggering £10,208,574 per year more in rental income by using the Tory LHC vehicle rather than being a council landlord operating council housing. Just a miserly £153 million or so more in income for the council over the 15 year period.
Reader, is there still anyone who thinks that council housign will ever be built again – apart from the buffoon John Healey the Labour Party housing secretary I mean?
2 thoughts on “The Tories ensure we will NEVER again see the return of council housing. Here’s why …”
No it doesn’t mean that John. Many council landlords operate the affordable rent model that has significantly higher rent levels than ths social rent model and level. In Leeds the difference (at 2017/18 levels) is £800 pa more in rent.
Joe, if Leeds has taken its housing stock back “in House” does that mean we don’t have to “worry” unless they create an LHC?
Whether we ever get sensible numbers of council houses is another matter!