We need government support to meet millennial housing challenge

AmicusHorizon and Viridian are on the cusp of merging to create one of the largest housing associations in England.

Suitable housing crisis costing NHS over

With stock covering the Midlands to the Kent coast, our newly merged organisation will have around 44,000 homes and aims to deliver significantly more over the coming years. It’s an exciting time of rapid change and collaboration. But there are challenges ahead.

A combination of demographics and stock profile means we’ll house a comparatively high number of young people.

That means we’ll be particularly exposed to the Shared Accommodation Rate (SAR) once it’s applied to social housing in 2019.

Our modelling suggests residents will typically face a weekly shortfall of between £10 and £20 between their housing benefit and eligible charges.

This isn’t a small amount to make up, especially given rising inflation. But there are some cases where the shortfall is set to be much higher, sometimes exceeding £50 a week. Shortfalls of this magnitude clearly aren’t sustainable and present a problem for both resident and landlord.

The immediate issue for us and other associations is a dearth of homes with rents below the SAR. We have only a few hundred and history tells us only a small proportion will become available each year through tenancy turnover.

This reflects the nature of our stock. We have very few shared homes, and those we do have are typically specialised accommodation such as supported housing (which thankfully will be exempt from the SAR).

Many of our residents are vulnerable and not suited to the pressures, complexities and compromises associated with sharing. We have to remember that when addressing the risks posed by this reform.

One minor blessing is the long lead-in time. Residents on Universal Credit or who’ve begun or renewed a tenancy from April 2016 will be affected.

But capping will only commence from April 2019. In the intervening period we get some time to think about how we might limit the impact, and Capping Aspiration offers some useful options.

We’re already charging social rents to single under 35s, as opposed to more expensive Affordable Rents, when they move home.

This doesn’t eliminate the shortfalls. But it does mean they’re more likely to fall into the more manageable £10 to £20 category rather than the unsustainable £50+ one.

We’re also thinking about future customers. We know many will face a significant challenge to afford, let alone access, low-cost housing.

This is a problem not just for the low-skilled, but also those in apprenticeships and other vocational training, or in the early stages of their professional careers.

We’re doing some exciting work on new innovative shared housing products with subsidised rents aimed at these groups. But more needs to be done – by landlords and government – if younger people are to continue to benefit from the firm foundation offered by affordable housing.

The upcoming general election offers an opportunity to get our message across.

Along with other CASE members, we’ll be encouraging DWP and DCLG to conduct a thorough review of the impacts of the SAR.

A recent poll by YouGov suggests half of voters think welfare changes have gone too far so there may be some support amongst the electorate for a rethink. Government has yet to publish an impact assessment.

If Government goes ahead with the policy we want to make sure some of the worst consequences are avoided.

Amongst other things, that will mean clear and wide-ranging exemption criteria, robust transitional arrangements and measures to support housing associations develop homes suitable for and affordable to single under 35s.

Capping Aspirations shows housing associations are determined to continue housing young people and that young people value what we have to offer.

Our lower rents, enhanced security of tenure, standard of accommodation, superior repairs service and added value services distinguish us from the private rented sector.

But the SAR threatens to jeopardise our contribution. We need Government’s support if we are to play our part in meeting the millennial housing challenge.