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

 

Social housing rental defies location-driven pricing of private sector

council housingLocation, location, location are often quoted as the 3 watchwords of property pricing as the area in which you choose to live has such a huge impact on the costs of buying or renting a home.

While that is true of the private market the social rental map of London offers a very different picture. Kensington and Chelsea, and Westminster are the most costly places to rent a home in the private sector. But average weekly rents for social housing are highest not in these expensive central boroughs but in Newham and Camden.

Social housing provides an affordable alternative for people who do not have the resources to buy a property or rent in the private sector. It is provided by local authorities and by Registered Social Landlords, defined as those that manage at least 1,000 homes. These can be charities or companies; most are housing associations.

Rents charged by social landlords are much lower and increases are controlled by a formula put in place by the government. Government policy for the past 15 years has been for rent convergence in social housing to ensure that similar homes in similar areas are charged at the same level. In order to achieve this it set target prices with those below the rate given some scope in the rent formula to gradually get prices up.

This more uniform approach produces a surprising rental map of London. Urbs looked at data from Registered Social Landlords gathered by the Department for Communities and Local Government. Newham and Camden emerge with the highest average price while one of the most costly areas for private rental, Kensington and Chelsea, is cheaper than Barking and Dagenham.

The data does not make clear the nature of the housing stock but tells a story of relatively level average rental pricing.

Social landlords

Using data from the Office for National Statistics in its Index of Private Property Rental Prices Urbs has previously looked at rental prices across London. The map shows a very different picture with sharp difference between monthly rental costs in central boroughs and outer areas.

Rental all prop map

In the last budget the Government revealed plans to extend the Right to Buy policy to housing association tenants, allowing them to own their rented home. While tenants who rent from Registered Social Landlords in central areas are paying similar rents to those in outer areas their properties are likely to command a much higher market value if they become part of the private housing sector.

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”

Urban chic or leafy charm? Inner city rentals catch up with affluent areas