Let’s build the social rent homes we need

First Wessex and Sentinel have announced they plan to merge to form VIVID. Peter Walters, Chief Executive of First Wessex explains why homes for social rent will form at least 20% of their development programme.

benefits

Why build social rented housing anymore? It may seem a stupid question – most of us know that its desperately needed.

In certain parts of the country at least, large numbers of people can’t afford ‘affordable’ rent. For those in low paid work in particular, and on partial Housing Benefit or just above the limit (‘just about managing’), ‘affordable’ rents are out of reach. And yet in 2015/16 just 6,550 social rented properties were built.

It’s not difficult to explain why: with a subsidy regime supporting nothing but the ‘affordable’ product, there’s little incentive for housing associations to pour resources into building social rented homes.

There’s also a genuine debate as to whether to build as many homes as possible to meet the housing crisis, or whether to build fewer more heavily subsidised homes to meet the needs of people for whom any other form of tenure is out of reach.

Perhaps there’s a further, more insidious reason for the decline in social rented too.

With the honourable exception of the White Paper, which is at least a step in the right direction, previous Government policy announcements in the last few years have tended to be more and more cataclysmic for the sector and for tenants or aspiring tenants, with each woeful policy announcement eclipsing its predecessor.

By the time the Government came up with its notorious proposed 2016-2020 programme consisting almost exclusively of shared ownership and expensive starter homes, maybe the ‘affordable’ rents initiative, in retrospect, felt positively benign.

But it isn’t. Many ‘affordable’ rented properties are only affordable to those on full housing benefit. There is a need for genuinely affordable social rented homes and it’s not being met. Other forms of tenure are beyond the reach of a significant number of people in need.

There is a strong case for Government to subsidise a social rented building programme too.

Last year’s Capital Economics report (‘Building New Social Rented Homes’) argued strongly that in the long term, one-off bricks and mortar subsidy in the form of grant to fund social rents was more cost effective than the ever-increasingly housing benefit budget footing the bill caused by the switch to the ‘affordable’ product.

Maybe central government will one day buy this argument. But in the meantime, many associations would like to build more social rented homes and cross subsidy is the favoured route.

At VIVID we plan to build a mix of tenures, with outright sale providing our own bricks and mortar subsidy to enable us to let at least 20% of our new homes at social rent for the foreseeable future.

Other associations have already recalibrated their sums to deliver rented homes at levels that are genuinely affordable. Let’s stop the numbers dwindling, and help meet the need.

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