Social housing crisis

Ruth Cooke (1)

Ruth Cooke, Chief Executive Officer blog...

We all know it – we have a housing crisis, and we have a particular crisis when it comes to social housing.  Whilst the ‘Homes for Britain’ campaign is doing a brilliant job of putting the issue of housing on the public’s agenda, housing associations are already in the midst of the battle. And let’s not even get started on the impact of Right to Buy.

The recent Budget showed exactly where housing stands on the political agenda but we need to deal with the here and now.  Already legislative changes such as the ‘bedroom tax’, Universal Credit and cuts to council tax support are having a huge impact. 

In many cases this has led to re-evaluating business models to counter the financial impact going forward but one thing is certain - we have all had to spend more to recover rent - money that could have been invested in providing more homes.

About two thirds of our customers are on housing benefit and have previously had rent paid directly, which means a fundamental change to how we work with the vast majority of our customers. Instead of collecting debts from over fifty local authorities, we will have to liaise with over 25,000 customers, many of whom have little or no experience of budgeting monthly.

Investing in workshops and continuing to help customers manage their money more effectively is costly and whilst we continue to care, we are having to get smarter about how we get the rent in. Who would have predicted that we would ever return to ‘1950s rent collection’ type tactics.

The stark reality is that those we are trying to help most will eventually be evicted if they do not pay their rent which ultimately means we place them in an even more vulnerable position.

For example, there are more and more people in work receiving housing benefit just so they can survive but the bedroom tax is a financial burden.  We have around 3,000 households wanting to downsize but with very little suitable accommodation available, customers are spiralling into more debt.

Victims of a policy they have no control over, we are seeing an increase in rent arrears which has a knock on effect. 

According to PWC and London & Quadrant ‘The Numbers Game’ report, over 240,000 homes need to be built each year, representing an annual investment of £39bn.  Political parties have said they want to see at least 200,000 affordable homes built each year but the last time we saw these sort of numbers in the UK was in the 1970s.  Over the past five years we have seen just 537,000 new homes built – just over half the target.

Social housing is subsidised housing and the clue is in the name-you can’t build it without subsidy. If that subsidy doesn’t come via grant, it’s got to come from other activities.Whilst we have the appetite to build, cuts to capital funding means that we have to be totally self-sufficient as a business and that means being absolutely commercial, being proud to deliver profit for a purpose. 

Social housing has always been seen as a private affair but now is the time for politicians to recognise and firmly address that it is a public issue.  Economically and socially, we need more housing. 

4th May 2015 | News, schemes and services | News