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A "modest" programme of new (un)affordable housing Matthew Warburton - 28/06/2013

Mark PriskIn a statement on 27 June, Danny Alexander, Chief Secretary to the Treasury, gave details of the government's plan for £100 billion infrastructure investment by 2020. It includes just £3.3 billion for affordable housing over the three years from 2015/16.

CIH described this as "modest" - "not the 'game changer' required to make a significant impact to alleviate our housing crisis." The £3.3 billion is expected to support 165,000 new homes, which implies a government contribution of just £20,000 to the cost of building each of them. The assumption is that the properties will all be let at "affordable" rents of up to 80% of market rents.

Speaking to the CIH Conference the same day, Housing Minister Mark Prisk said that the government would be looking for "something for something" - registered providers bidding for funding would be expected to demonstrate efficiencies or put in a significant contribution from disposals or by converting existing properties from social to affordable rents.

The Minister's speech included no mention of council debt caps - not even to say why the government has chosen not to lift them - and no acknowledgement of the contribution councils are making to the supply of new social housing, or of the fact that they could do more.

At the same time that the government has decided to further tighten the screw on welfare spending by lengthening the time unemployed people have to wait for jobseekers' allowance, it seems oblivious to the fact that its housing policy choices will almost certainly have the long term effect of pushing up welfare spending.

A report by Future for London published earlier this month includes an analysis of the progress so far of the affordable rent programme in London showing that 3104 new affordable rent tenancies had been created by December 2012, of which just 543 were in newly built homes, the remainder being relets of existing dwellings converted from social to affordable rents.

The average income of the tenants concerned was £240 per week in the new properties, and £205 in the conversions, compared with an average of £243 for tenants in social rented homes. Not surprisingly, more of the tenants in the higher rented "affordable" properties were eligible for HB - 87% compared with 83% of tenants paying social rents.

If the same pattern applies to the affordable rent programme more generally, it is clear that the long run impact on housing benefit spending will be considerable. Can it really be said that this approach offers long run value for money to the taxpayer?


See also, 'The new rent formula - what does it mean?'

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ARCH Member Comments 6 people like this

  • Tim Campbell, Woking BC - 28 June 2013

    Far from a joined up approach. Watch out for more misquoted stats from the housing minister and Sec. State for Works and Pensions.