London’s 15 largest housing associations have proposed a policy that will ban ALL benefit claimants from accessing ‘social’ housing within the next 5 years and make ‘social housing’ all over England become a no go zone for anyone reliant in whole or in part on social security benefit.
The G15 group, the largest 15 housing associations in London, are demanding that government allow social housing rents to increase by 1% above CPI inflation for the next 30 years after the same original formula [CPI+1%] ends in 2025. The G15 group demand this for London yet know that it will be applied right across England and to Registered Providers (RP) i.e. council landlords and not just Private Registered Providers (PRP) i.e. housing associations.
This is dangerous commercial as well as social madness and is the typical deluded vacuum theory of the G15 group at play once again in its myopic delusional focus that ignores any other housing or social policy variable; or a proposal that a bunch of 7 year-olds in a debating society would dismiss as dangerous illogical madness.
For example it means that all existing ‘benefit households’ will be shortly and rapidly evicted from ‘social’ housing due to increasing non-affordability and no new ‘benefit households’ will ever become social tenants due to the same non-affordability issue which we can call No DSS or No Job No Home or Any Disability No Home as all being correct. Reader, be in no doubt this is not scaremongering but irrefutable fact and reality as I detail below in which I try to avoid asking what planet do these ignorant deluded fuckwits called the G15 reside which is the obvious question.
The G15 demand a 30 year policy from 2025 to 2054 of social housing rent increases of 1% above CPI inflation. In 2 minutes you can easily populate a spreadsheet to crunch the numbers assuming CPI inflation averages the government target of 2% (it is currently higher) and assume the status quo of housing supply and current proportion of affordable rent versus social rent levels and all other things being equal. The baseline is English Private Registered Providers the correct name for housing associations had a turnover of £21.8 billion realising a profit of £6.3 billion in the latest available yearly data.
With a CPI inflation figure of 2% and the added 1% above inflation increase demanded by the G15:
- Turnover increases to £57.8 billion by 2054
- Profit increases to £16.44 billion in 2054
- PRP Housing Benefit incomes increases by £21 billion per year
With a CPI inflation increase of just 2% and no added increase on top:
- Turnover increases to £41.9 billion pa
- Profit increases by £11.99 billion pa
- HB receipt increases by £12 billion pa
The seemingly innocuous additional 1% over and above CPI inflation makes a massive difference:
- Turnover and thus how much more rent is charged pa by 2054 is up £15.9 billion per year
- Profit of England’s PRPs (housing associations) increases by £4.45 billion pa more
- PRPs receive £9 billion pa more in housing benefit (& or UC housing cost element)
The difference that the additional 1% rent increase makes over and above inflation is staggering and not innocuous at all as the numbers demonstrate and as stated previously the government cannot limit permitted rent increases or the maximum rent formula demanded of CPI+1% to just housing associations or just London or just London housing associations, it is the rent formula governing all social landlords, council (RP) and housing association (PRP) across the whole of England.
Overall Benefit Cap policy and impact
The OBC policy operates as the maximum amount of benefit a household can receive and currently set at £20,000 per year and £1667 per calendar month. It is worked out by deducting all benefit and what was tax credit income from this £1667 limit leaving a maximum residual that can be paid as housing benefit.
Imagine a household today has a benefit / tax credit income of £1200 per calendar month which when deducted from the £1667 cap leaves £447 as the maximum payable in housing benefit. The rent is £450 pcm so all but £3 per month is paid in housing benefit towards rent. Now factor in benefit / welfare increases of 2% per year and rent increases of 3% per year.
2021 Maximum HB £447 pcm set against monthly SRS rent of £450 pcm = £3 pcm HB shortfall
2022 Maximum HB is £443 as income rises 2% from £1200 to £1224 and rent is £464 with 3% increase = £21 pcm shortfall
2026 The first year of the new 30 year CPI+1% rent formula with OBC limit still £1667 pcm.
Rent has increased to £507 pcm with yearly 3% rent increases and other benefit/welfare income increased to £1320 pcm with 2% yearly increases. The maximum housing benefit payable is £1667 less £1320 and £347 per month in housing benefit to pay for a rent that has increased to £506 pcm for a monthly shortfall in housing benefit of £159.
In 5 years times the exact same period of the G15 demand as CPI+1% is already the rent formula until 2025 in the context of the OBC policy and benefits up 2% pa and rents up 3% pa a negligible £3 per month shortfall in housing benefit today becomes a £159 per month shortfall meaning all existing social tenants are on the arrears to eviction to homeless pathway and all prospective benefit tenants will never be allocated the social housing property due to affordability.
2030 Sees total benefit / tax credit become £1429 per month leaving £237 as the maximum monthly housing benefit yet the 3% rent increases have taken today’s £450pcm rent up to £570 pcm – a housing benefit shortfall of £313 per calendar month and more than 100 times the £3 pcm shortfall of today
The numbers and basic arithmetic reveal this not any subjective or moral assertion that could be labelled as scaremongering. Two plus two always equals four.
Allocation of social housing and social purpose (hahaha!)
Today as I discussed and detailed yet again recently (here) social rented housing is already operating a No DSS allocation that is rapidly approaching a No Job No Home policy. ALL 3 bed and larger social housing properties are No DSS to all fully-occupying households due to the overall benefit cap policy and the bedroom tax demand to fully populate all new social housing due to bedroom tax. Many 2 bed SRS properties fully populated are at this level in higher rent areas and/or the 200,000 ‘affordable’ (sic) rent properties each having an average 47% higher rent level than the typical social rent model. In some areas this also applies to the 1 bedded SRS property as well.
The proposed CPI+1% rent increases mean at 2% CPI that rent will increase by 3% and if social security benefit increase by CPI then by 2%. In as little as 5 years this will mean as the numbers starkly and unambiguous reveal that no existing or prospective household in the SRS will get their full rent paid by housing benefit or UC housing cost element. Every SRS household will be forced to top-up their housing benefit with other subsistence level benefits they receive. And every year a higher percentage of benefit income will be spent on rent. IF the national minimum wage increases by (just) CPI each year and/or all wages rise by inflation only or less then all employed SRS tenants will have to spend a higher percentage of their wage income on SRS rent.
Millions of existing SRS households on benefit or on minimum wage become at ever-greater risk of the arrears to eviction to homeless pathway.
The same applies to all prospective SRS tenants seeking the 300,000+ new SRS properties that become available each year and they will be denied social housing on grounds of affordability as both No DSS and No Job No Home become the central basis of SRS allocation. The phrase ‘housing-need’ becomes nothing more then nostalgic whimsy.
This is the deluded vacuum policy of the G15 money-grabbing bastards as they wholly ignore every other housing, housing benefit and social policies in their myopic drive to increase their profits.
The benefit household and even the minimum wage household see social housing become a no go zone that they will be prevented from accessing. I say ‘social’ housing when it is clear that the 1% rent increase over and above inflation demand means there is no such thing as ‘social’ housing and its demise caused by asocial landlord greed.
The allocation of both council and especially housing association properties becomes devoid of housing need and devoid of social purpose or indeed any similarly related claims the blinkered idiots who live in the SRS bubble love to state it is.
All of the above is NOT scaremongering in any way; rather it is what the irrefutable numerical facts say and starkly say and cannot be denied by the innumerate dickheads of the G15 or any other SRS lobby or quarter.
The real issues and direct manifestations
Imagine the massive increases in homelessness!
Now scratch the surface and imagine the massive increases in disabled and incapacitated homeless households who are not ‘workless’ by any form or design but solely because they have been refused social housing by the purported social landlords on affordability grounds!
Those poor social landlords who are now pouring thousands into employment training for existing social tenants (aka teaming up with the largest zero hours minimum wage paying local employers) only to find they will have to spend far more as they will be refusing prospective tenants on minimum wage as this is not enough to afford social (sic) housing even at the social rent level … whilst the same landlords laugh in the face of any prospective tenant on benefit including those who are disabled or incapacitated who laughingly still thinks they have a chance of being housed.
By the way the authoritative English Housing Survey says 54% of existing SRS households have a disability so local authorities need to be sourcing temporary homeless accommodation that is full disability compliant for the mass increase in existing disabled households evicted because of the 1% above inflation rent increases demanded. Good luck with that local authority homeless departments!!
Instead of disability groups rightfully moaning that they cannot negotiate around cars parked irresponsibly on pavements we will see petit bourgeois social housing ‘professionals’ demanding the police or the local authority clear the parks of disabled rough sleepers so they can do their park run in their latest £200 a pair trainers and avoid tripping over their wheelchairs parked outside their tents!
The same social (sic) landlords who say they support Housing First in principle because of its housing is a human right premise will soon be placing a huge caveat on that in housing is a human right IF it can be afforded but not otherwise – as that is precisely what this CPI+1% for 30 more years means and the idiotic innumerates who are the G15 fail or can’t be arsed to see this inevitability.
Do I need to say how immoral and how asocial this rent increase proposal is? Many will already be commenting on how can they justify charging existing tenants to pay more so landlords can expand with more properties, the exact same argument that has been the basis of the social housing trickle-down economics in the affordable rent regime whose rent levels means the exact opposite.
The G15 30 year CPI+1% rent increase proposal sets in concrete an English system of ever-increasing structural homelessness which those on the left of the political spectrum will rightly bemoan, and also set in concrete the ever increasing greater number of those who cannot get on the property ladder by those on the right and right across the political spectrum. The irony of a Conservative government putting in place a massive structural barrier to increased home ownership as no renter will ever be able to afford a mortgage deposit due to ever higher real term rents is hilarious yet do not be surprised if the deluded ideological dickheads in the Tory party also fail to see these direct consequences of the CPI+1% increases for 30 years demand and accede to it!
In final summary please do not see this JUST as a money grab by the ever more commercially driven RP and PRP landlords who comprise what we still laughingly call social housing. This is the death of any definition of ‘social housing’ as it will mean in the space of just a few short years that council and housing associations landlords WILL be refusing ALL future benefit tenants, refusing all future minimum wage tenants, be refusing all future households that contain a disability… AND redoubling their efforts to evict the existing benefit household tenants who as a direct consequence of SRS landlord greed will become an acute risk of the arrears to eviction to homeless pathway.
This is No DSS and No Job No Home and Any Disability No Home all writ large!
All of the above arguments are also a strong argument to abolish the Overall Benefit Cap policy of course yet as NONE of the political opposition parties have ever made it their publicly stated policy the likelihood of it being abolished are as rare as hen’s teeth or rocking horse shit! As I said way back in 2012 ahead of the OBC policy coming in it will create mass systemic homelessness and the end of any semblance of housing need or social housing or social purpose. The OBC limit has never increased with inflation and the original 2013 onset saw £26k pa as the limit across England which reduced in actual terms to £23k pa in London and £20k pa in the provinces in late 2016 and has received no inflationary uplift since. Just and inflationary uplift would today sees £28,600 as the cap limit when it is £20k across most of the country – or a cut in subsistence level benefit income of circa £165 per week and £717 per calendar month.
If you are on say the average household income or even double that could you afford a £717 drop in net income per month? No! Then how the hell does this government and opposition politicians and national media and even the G15 group of social landlords expects the benefit household or the low pay household afford such a cut?
My initial response to this dangerous madness being announced late last night was in the following tweet which barely cuts it
I stand fully by that tweet and the 200o+ words here fleshes out some of the detail and just some of the adverse yet inevitable consequences of this ill-conceived and dangerously innumerate proposal from the uber capitalists who are the G15 group who really, really, really do not give a shit about the tenant and whom they see only as a cash cow.
PS The difference between CPI only and CPI+1% until 2054 is 2% average CPI inflation ONLY sees a rent increase of 188% on today’s rents. The 2% CPI plus an additional 1% over and above inflation – the G15 demand – means that rent increase will be 258%.
Or put another way the £380k pa salary of Clarion’s chief executive and G15 member Claire Miller will rise to £712k per year at inflation only but increase to £974,000 per year with rent rises of 1% above inflation if linked in the same way!