Social housing tenants in London have paid £50 million extra in rent over the last three years because housing associations have been re-categorising their properties, changing them from “‘social”‘ to “‘affordable”‘.
If a property is categorised as “‘affordable”‘, housing associations can charge up to 80% of market rate, as opposed to 40% for “‘social rent”‘. Tenants in properties catagorised as “‘social rent”‘ also get lifelong tenancies while no such guarantees exist for “‘affordable”‘ properties. As “‘social rent”‘ tenants move out (or when estates are redeveloped) housing associations are quietly converting properties to “‘affordable”‘.
11,000 properties across the capital have been changed from “‘social”‘ rent to “‘affordable”‘ rent in the past three years. Over half of the housing associations involved are charging over 70% of market rent for their “‘affordable”‘ rent properties. The idea that this is affordable is ridiculous.
The National Housing Federation (NHF), which represents housing associations, claims that housing associations are being forced into raising rents due to cuts in government funding. In 2010 the government made a 63% cut in capital investment budgets for housing associations, resulting in a £3 billion reduction in funding.
Yet the NHF and housing associations have a choice on whether to recatagorise properties; they also have a choice to fight government cuts. Housing associations are happy to pay high executive and director salaries, raise rents and move on tenants deemed to have “‘spare rooms”‘. The NHF is one of the main drivers behind the “‘Homes for Britain”‘ campaign that looks to cross-party solutions that are limited to some funding committement.
Social housing should be publicly owned and controlled, not outsourced to housing associations or arms-length organisations, high quality, and with really affordable rents.