Introduction

In 2017, the then Communities Secretary, Sajid Javid, promised a Social Housing Green paper which would be “the most substantial report of its kind for a generation”. There were two main sources for this renewed political interest in social housing. The first was the growing recognition in light of the Global Financial Crisis that the market alone could not adequately accommodate low-income households. The second was the Grenfell fire, a deadly and tragic demonstration of the failings of the current housing system.

To ensure this newfound reforming zeal remained informed by the evidence-base, the UK Collaborative Centre for Housing Evidence (CaCHE) established the Social Housing Policy Working Group, whose purpose was to synthesise the existing evidence on social housing and to develop policy implications in collaboration with a range of relevant stakeholders. The group met three times over the course of 2018 and published six papers covering experience in Scotland, Wales and Northern Ireland, as well as the subject areas of Governance, Finance and Design.

The context – social housing in England

Social housing is defined here as housing provided by public or non-profit organisations that is rented at substantially below market rents and is accessible to low-income households.

Social housing reached its peak in 1979, when it provided homes for 31% of all households in England. In 2016-17, 4 million households in England were in social renting, making up 17% of all households the reduction being due to the policy of sales through the right-to-buy as well as historically low new-build rates.

English social housing is tightly targeted on people with low incomes. Forty-five per cent of social renting households were in the lowest fifth by income, and only 3% were in the top fifth.

In the consultations around the governments’ Housing Green Paper in 2018, the tenants consulted raised issues of stigma, powerlessness and the hostile rhetoric of ministers towards social housing. Nevertheless, in 2017, 1.2m more households were on local authority waiting lists for social housing.

Social housing in other parts of the UK

Much of social housing policymaking is devolved, meaning that the experiences of Scotland, Wales and Northern Ireland are quite different from those of England. Both Wales and Scotland, for example, have abolished the right-to-buy and enjoy relatively higher grant rates than England.

Scotland

Since 1999, housing policy in Scotland has been diverging from other parts of the UK, arguably at an accelerating rate. The UK Housing Review summarises the key features of divergence in Scotland as: targeted increase of affordable housing; the abolition of Right to Buy; and distinctive private rented sector reforms. Before devolution, Scotland had the highest social housing ratio among the UK nations, and this remains the case with social housing making up almost one-quarter of the total housing stock.

In 2011 the Scottish Government launched a programme to deliver 30,000 affordable units over the five years of the Parliamentary term (2011-16). A distinctive feature of the programme was the introduction of grant-funded council housing on a scale similar to that of the grant per unit offered to developing housing associations with no restrictions on borrowing by councils to fund new social housing. The target was achieved. The successful delivery of the programme significantly rested on a group of larger developers- both councils and associations, with a long tail of smaller developers.

Following the 2016 Scottish General election, the SNP-led Scottish Government sought to produce 50,000 additional affordable homes by 2021, 70% of which is to be for social rent.

View paper: Social housing in Scotland

Wales

In 2017 the social rented sector comprised 16% of housing stock in Wales. The right-to-buy council houses has been substantially curtailed in Wales over time and was fully abolished at the beginning of 2019. The majority of the social housing stock in Wales is now owned and managed by approximately 35-40 active developing associations.

The current Welsh Government’s programme, Taking Wales Forward 2016-2021, includes a commitment to deliver an additional 20,000 affordable homes over the period 2016-2021

A significant part of the programme will still be funded through Social Housing Grant (SHG) currently 58% of the capital cost, and revenue funding (Housing Finance Grant 2), via housing associations.

View paper: Social housing in Wales

Northern Ireland

Approximately 16% of houses in NI are in the social sector, approximately 86,000 (70%) of which are owned and managed by the Northern Ireland Housing Executive and the remaining 37,000 (30%) by housing associations. The Housing Executive has built no new dwellings since the early 2000s, meaning housing associations have become the sole providers.

Ongoing pressure on public sector finances has been reflected in the housing sector in Northern Ireland in 2018/19 in a reduction in the Government target for the number of social dwellings to be built from 2,000 to 1,750, despite a rise in ‘housing stress’ (urgent need).

Progress in changing housing policy in recent years has been held back by the suspension of the power-sharing devolution arrangements since 2017.

View paper: Social housing in Northern Ireland: challenges and policy options

Governance

Declining public capital subsidies over recent decades, coupled with regulatory requirements and constraints have forced social housing organisations (SHOs) to focus more closely on financial and commercial imperatives.

This paper explores the responses of SHOs to this changing financial and regulatory environment, what they mean for the long term resilience of the sector, and the extent to which they conflict with the established social objectives of housing associations.

It identifies four main trends among housing associations: increased organisational scale; expanded development and diversification into intermediate and market housing; managing existing housing assets more intensively; and drawing upon more complex and risky forms of finance.

Particular attention is devoted to the voice of tenants, and how housing associations account for this in their strategic decision-making. A range of issues are examined including: the role of tenants as board members; citizen vs consumer approaches to engagement; and the emerging role of technology.

View paper: Social housing governance and accompanying policy briefing.

Design

One of the criticisms of previous programmes of social housing has been the design of the accommodation, and there are numerous examples of relatively new social housing being difficult to let or unpopular because of its design.

This paper provides a brief historical account of the marginalisation of architects, planners (and design value) from housing delivery and research, covering key issues such as procurement, building contracts, fees, post-occupancy evaluation and the dissolution of local authority housing departments.

The report recommends, among other things, that the recent revival of local authority housebuilding should be accompanied by an investment in architects, planners and others with a skillset in delivering design value, and a commitment to Post Occupancy Evaluation as a means of evaluating the performance of housing design.

View paper: Promoting design value in public rented housing, an English perspective and accompanying policy briefing.

Financing

There are four elements that determine the cost of housing production, and therefore the units’ ultimate affordability: equity, financing, land/density, and construction costs. Using this framework, this paper conceptualises and documents three main ways that the state has intervened in the delivery of sub-market housing both in the UK and beyond: that is through the avallability and price of land, the provision of finance, and subsidy

Land: surplus public land is often viewed as one source of affordable land supply, but only if public bodies are allowed to sell land at sub-market values. Through land value capture mechanisms such as S106, a proportion of private land values can also be directed towards sub-market housing.

Finance: more than 150 local authorities in England are involved with Local Housing Companies, which fund the supply of new housing (some social) from general funds. The UK has a well-developed financial aggregator (THFC) but state-backed investment banks could provide a cheaper source of long-term finance.

Subsidy: housing benefit remains a fundamental way of making housing affordable and giving social and affordable developers (and investors) confidence. Other approaches include revolving fund approaches (e.g. shared equity models) and revenue subsidy (e.g. state-backed guarantees)

View paper: Funding new social and affordable housing

Conclusion

Taken together these papers offer some reflections on the issues that need to be considered in any programme of increased provision of social housing. For more information on CaCHE’s current research programme, please see our ‘Research Projects’ page.

If you have any questions regarding the Social Housing Policy Working Group then please contact Dr Chris Foye or Dr Gareth Young.