NHF chief executive Kate Henderson has slammed housing associations having to bid directly against developers “making millions” from luxury properties while 1.3m children live in PRS poverty.
That 1.3m figure is revealed in newly released NHF research that shows an increase of 537,325 children (69%) living in poverty in privately rented homes in England since 2008.
Henderson urged “more direct” government funding for social housing, citing that nearly half (46%) of all children in privately rented homes in England live in poverty – despite seven in 10 (71%) of their families being in work.
She said: “It is a disgrace that in one of the wealthiest countries in the world we cannot provide our children with a secure and affordable home.
“The critical lack of social housing is pushing more and more families into poverty by forcing them into insecure privately rented homes they cannot afford.”
She continued: “It’s so obvious that we need to be building more social housing, and the government has a duty to our children to invest in this – this means increasing funding for social housing and urgently reforming the way that land is sold in this country.
“We will only be able to build desperately needed social homes for children living in poverty if housing associations have access to land instead of the current situation where they are forced to bid directly against private developers who make millions from luxury properties.”
The research points out that high property prices and a shrinking proportion of social housing mean the number of families living in privately rented homes has increased by more than three-quarters in a decade – growing faster than couples and single people.
Many parents are being forced to live in insecure private rented homes which they can’t afford, pushing them and their children into poverty, the report says.
Pressing the case for that direct government funding, Henderson said around a quarter of a million – 242,753 – of the children identified in the report would not be living in poverty if they had access to social housing.
She said: “A further half a million children would be better off in social housing, with their families able to keep more of their income.
“These children have also been affected by low incomes, cuts to tax credits, and other benefit changes.”
The report shows that by moving into social housing, typically 51% of market rent, households in poverty would be around £3,172 a year better off – more than a year’s worth of food for an average household.
And the government has scope to save around £1.8bn of taxpayers’ money each year in housing benefit payments.
Chris Town, Vice Chair of the Residential Landlords Association (RLA) maintained the biggest driver of PRS poverty was Government’s freeze on Local Housing Allowance rates.
“Support for housing costs is simply failing to keep up with the realities of rented housing and we call on the Government to use its spending review to drop the freeze,” said Town.
“It is though disappointing that today’s report failed to note that the official data shows that the proportion of income spent on private sector rents is falling compared to the social sector where it is increasingly.
Data also shows that over the last year private sector rents fell in real terms,” he said.
The English Housing Survey shows that between 2010-11 and 2017-18, the proportion of household income (including housing benefit) that private sector tenants spent on their rent decreased from 35% to 33%.
In the same period the proportion of household income (including housing benefit) that social renters spent increased from 27% to 28%.
The Office for National Statistics has reported that in the year to December 2018, private sector rents paid by tenants in the UK rose by 1% – well below inflation.
A report for the RLA by Manchester Metropolitan University has noted that Local Housing Allowance rates are the main driver of tenancy failures in the private rented sector.
According to figures from the NHF and Crisis, England needs to build 90,000 social homes a year to make up for the critical shortage.
Last year only 6,463 were built.
Darren Baxter, Housing Policy and Partnerships Manager for Joseph Rowntree Foundation (JRF), said “step change” was needed in the provision of low cost rented homes.
He said: “That’s why we are calling on government to set out a plan to increase the supply of social housing, at rent levels that ensure affordability for families on low incomes.
“It is not right that any child should be swept into poverty, or live in a family which struggles to keep food on the table or a roof over their head.
“But this is the reality for more than four million children in the UK – and it doesn’t have to be this way.”
Further responding to NHF’s report, Chris Town, Vice Chair of the Residential Landlords Association said: “The biggest driver of poverty in the private rented sector remains the government’s freeze on Local Housing Allowance rates. Support for housing costs is simply failing to keep up with the realities of rented housing and we call on the government to use its spending review to drop the freeze.
He added that it is ‘disappointing’ the report failed to note that the official data shows that the proportion of income spent on private sector rents is falling compared to the social sector where it is increasingly.
“In the end, the best way to ensure rents are affordable is to boost the supply of homes to rent alongside all other tenures. This means the Government adopting a positive, pro-growth tax regime that supports and encourages the majority of good landlords to provide them”, he said.