Is this the beginning of the end of the council house?

Council Housing Thamesmead-2London is soon to pass a housing landmark – the amount of social housing provided by the private sector is about to overtake the number provided by councils.

There are currently 799,400 households in social housing across the capital. That’s 23% of all households, and the rate has been fairly stable for the past 7 years, falling very gradually from 24.6% in 2009. During the same period the demand has increased from a growing population, and there are more families living in social housing in London now than there were in 2009.

What has been changing more dramatically is the ownership structure. 20 years ago town halls owned 3 times the number of homes as housing associations in the social housing sector.  The latest figures on housing stock for 2015 show that they are now near parity and the trend suggests that the majority of homes will be owned by private providers this year.

Social housing chart

Council-owned housing stock has been in decline since the 1980s when the government of Margaret Thatcher introduced the Right To Buy scheme to enable tenants to buy their council property.

Housing associations have been building at a faster rate than council have been replenishing their stocks and some councils have transferred their homes to these private providers.

A number of London boroughs have done this.  Richmond owns no housing.  Bexley, Bromley and Merton have also transferred their social housing stock to private registered  landlords, although all have a very small number of homes still listed under their ownership.

In contrast, the borough of Southwark owns 36,687 homes, the largest number in London.

Council housing stock

As many people struggle to find a suitable place to live the demand for social housing remains strong.  More than a quarter of a million households are on housing waiting lists held by local authorities.  The number has gone up by 3% since last year to 263,491, the first rise in 10 years.

All local authorities have a register of people who are seeking social housing, which offers much lower rent and secure tenancies.  The criteria councils use to decide whether someone is eligible for a place on the register have changed since 2011 when they were given greater freedom to manage the lists.  This has contributed to the reduced number of people on the lists, until last year’s rise, according to the Department for Communities and Local Government.

Most councils warn people seeking a place on the register that with limited numbers of houses and few becoming available each year they are likely to have to wait a long time for a property, if they qualify to receive one at all.

Whether they are hoping for a council house or social housing from a housing association, their chances are limited. The social rent sector is under pressure.  Out of more than 17,000 new “affordable” homes built in London last year only 3,000 were for social rental, as reported by Urbs.

This means that many people on lower earnings will continue to seek an affordable option in the private rental market.  Rental price increases in recent years have made this a real struggle, as reported here, which is why it has become one of the key battlegrounds in the forthcoming elections for Mayor.

Source data

See also

Social housing rental defies location-driven pricing of private sector

Families face the biggest premiums for renting homes in the capital

Paying the rent takes up 72% of income for private tenants

 

Elderly bear the brunt of deprivation in the capital

Hands walking stick Kristo-Gothard Hunorshutterstock_162933494

Photo: Kristo-Gothard Hunor ┃Shutterstock.com

Elderly people in London are being left behind in the fight against deprivation.

Over the past 5 years a number of boroughs that were among the most deprived local authorities in England have reduced multiple causes of deprivation in many neighbourhoods. Hackney, Newham, Tower Hamlets and Haringey have pulled themselves above the bottom 20 boroughs in England since 2010.

But in these districts and others in the capital thousands of older people are living in income deprived households.  This is a particular problem for London. Of the 10 boroughs in England with the highest level of over 60s living in income deprived households, 7 are in London including the 3 with the worst record, Tower Hamlets, Hackney and Newham.

Local authorities with the highest proportion of older people in income deprivation
1 Tower Hamlets 49.7%
2 Hackney 43.1%
3 Newham 41%
4 Manchester 36.3%
5 Islington 36.1%
6 Southwark 34.3%
7 Lambeth 33.2%
8 Liverpool 32.7%
9 Knowsley 32.6%
10 Haringey 31.8%

5 more are in the 20 most income deprived boroughs for older people – Brent, Barking and Dagenham, Hammersmith and Fulham, Camden and Lewisham.

In Tower Hamlets nearly half the old people are living in income deprived households. The borough also has the worst record on children in income deprived households with 39% of under 16s affected.  In 6 other boroughs (Islington, Hackney, Barking and Dagenham, Enfield, Lambeth and Southwark) at least 30% of children are living in income deprived households.

These figures are revealed in data gathered for the Department of Communities and Local Government for the Index on Multiple Deprivation – the government’s measure of levels of deprivation across England. The index looks at 7 areas – income, employment, education, health and disability, crime, housing and the living environment.

The government measures deprivation in small areas called LSOAs.  Each of these neighbourhoods has around 1,500 residents.  There are 32,844 of them in England and 4,835 in London.

275 of these neighbourhoods in London are among the 10% most deprived in England. London has done well in reducing deprivation over the past 5 years, but the borough map shows a clear divide with much higher levels of deprivation in the east.

Deprivation borough map

The most deprived neighbourhood in the capital, according to the index, is an area of Hackney to the south of Homerton High Street and west of Mabley Green.  This neighbourhood is home to 1,300 people.

Of the 5 most deprived neighbourhoods in London, 2 are in Hackney, 2 in Westminster and 1 in Islington. The least deprived neighbourhood, according to the index, is in Bromley.

Source data

See also

Areas where pensioners most likely to be lonely identified

Low birth weight babies in Tower Hamlets 60% above London average

Elderly losing out in city with high levels of digital skills

98,000 not claiming their pension in a tale of two Londons

 

 

 

 

 

 

More “affordable” homes but the rents prove unaffordable for many

High Rise-2More affordable housing was delivered in London in the last financial year than for any period dating back to 1991. 17,913 homes were built or acquired and made available in the affordable rental sector, according to data from the Department for Communities and Local Government, and the GLA.

This will be welcome news to many Londoners who struggle to find a suitable place to live against a backdrop of rising private rents and ever climbing property prices. But the increase in delivery is being driven by a particular part of the affordable housing sector and for many it is not really affordable at all.

Affordable rents were previously available through what was termed social housing. This is rented property provided by a council or a housing association with long, secure tenancies and rents at around 50% of the market rates.

Housing associations also provided Intermediate rental. This gives a tenant a subsidised rent, usually around 60% of the market rate, while they save for a deposit to buy the property.

In 2010 the government introduced a new category, which it confusingly called Affordable Rent. This aimed to give social landlords a route to maintaining or increasing the amount of lower cost rental while relying less on public funding. It allows them to charge more and have less restrictive tenancies. Affordable Rent properties can charge up to 80% of the market rate.

As the chart below shows, it is this sector that has taken off in the past year, increasing the amount of affordable housing, but the amount of Social Rent housing has declined sharply since AR was introduced. And this is not due to the building of new stock alone. Some Social Rent property is re-classified as Affordable Rent when it becomes vacant.

Affordable rent

The last time the delivery of affordable housing was at this level was in 2011-12. In that year a comparable number of Intermediate Rent properties was made available. But in 2011-12 there were 11,374 Social Rent homes. Last year there were 3,053.

To examine the impact on monthly rents Urbs looked at the data on market rates for various property types, previously reported here, and applied the Affordable Rent and Social Rent rules. We have used the median London price for each size of property determined by the Valuation Office Agency, which advises the government on property pricing.

Market Rate Affordable Rent (80%) Social Rent (50%)
1 Bedroom £1,155 £924 £577.50
2 Bedroom £1,400 £1,120 £700
3 Bedroom £1,695 £1,356 £847.50
4 Bedroom + £2,500 £2,000 £1,250

A family needing a 3 or 4 bedroom house would require a substantial income to afford an Affordable Rent and in many areas of central London the cost will be much higher.

Some families may be able to claim Housing Benefit to bridge the gap but the Benefit Cap introduced in 2013 means that the total claim for all benefits for a family is £500 a week – the amount needed just for rent of a 4 bedroom house in these calculations.

In its own impact assessment of the policy in 2011 the government acknowledged that the difference between the Social Rent and Affordable Rent would be hard for some to meet and reduce their housing security, or as it put it:

“Although some households are not likely to realise the same degree of benefits as would have been the case had they been allocated a social rented property (e.g. in terms of the introduction of time-limited tenure and potential for higher rents) the policy will also bring substantial advantages to the same type of households by increasing supply”

It says that without the policy there would be far less affordable housing and these people would have to wait for the limited amount of social housing while remaining in private rental properties at higher prices.

It can be argued that the introduction of the Affordable Rent category has addressed a decline in social housing. But the increase in affordable housing may be of little comfort to the least well off for whom an affordable rent of up to 80% of market rate in London is, well, just unaffordable.

Source data

See also

Families face the biggest premiums for renting homes in the capital

Under 40s locked out of housing market destined to be “generation rent”

Renting in London: 2 bedroom homes