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Shift poorest tenants from private rental to social housing - call

A call has gone out to shift tens of thousands of the poorest tenants in the private rental sector into social housing in a bid to save money.

The Chartered institute of Housing and the Centre for Homelessness Impact, in a joint study, say the government could save £1.9 billion a year by moving recipients of Housing Benefit or Universal Credit from private rented accommodation to social rented housing.

However, it recognises that there’s a dire shortage of social housing; but it adds that if the government built 10,000 homes a year in the social rented sector it would cost the taxpayer some £40m a year, and could save £44m a year in housing subsidies if used to house tenants currently in private rented housing or temporary accommodation.

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The savings in benefit and temporary accommodation costs could offset the cost of building more social rented homes, insists the study.

James Prestwich, director of policy and external affairs at the CIH says: “This joint report reveals the full benefit to the exchequer of building social rented homes.

“Councils currently house almost 75,000 households, at risk of homelessness, in private rented accommodation. If these households could be rehoused in social rented homes councils would save £572m a year.”

And Dr Lígia Teixeira, chief executive officer, Centre for Homelessness Impact, adds: “We should ask hard questions about whether the very large sums paid in benefits to subsidise the housing costs of people on low incomes are being used in the most effective way.

“While evidence suggests this financial assistance constitutes an important part of the UK’s homelessness ‘safety net’, our report shows that it is possible to make limited resources go further: for instance, by redirecting some of this money into social housing which can be better value and more secure for tenants.”

 

Before the pandemic temporary accommodation for families experiencing homelessness was costing local authorities £1.2 billion a year; almost four fifths of such accommodation is met using private rented housing.

The Department of Work and Pensions currently spends £30.6 billion a year on Housing Benefit and the housing element of Universal Credit, which is around 15 per cent of the benefits budget. This is forecast to increase to £31.3 billion by 2025-26 as more people switch to Universal Credit.

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    Not only would this provide much needed extra housing at the lower end of the market, it would reduce some of the pressure on the PRS and perhaps slow the relentless upward pressure on rents for all.

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    There are many very well paid people living in council houses and enjoying the low subsidized rents, certain union leaders and the leader of Norwich city council, either remove them or make them pay a full market rent, social housing should be for the less well off only

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    If you are correct about the leader of Norwich Council that is absolutely scandalous!

     
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    Whilst I agree with the idea, The writer needs to be clear about costs to local authorities and the government. They are not the same. it would also be nice to see local authorities trying to deal with the more challenging tenants!

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    The danger of this idea is that low income families with low paid dead end jobs (commonly known as essential workers) and UC top ups would work as little as possible or stop working to ensure that they were deemed to be poor enough to qualify for social housing. Once in their social housing they would do sufficiently little to ensure they stayed poor enough to retain the house.
    A better idea would be for social rents to be at least LHA level. The security of tenure alone means it's probably worth more than that and on new builds should be midway between LHA and market rent as the utility bills will be lower. Then social housing providers could afford to buy or build more housing.
    It wouldn't matter what someone's earnings were. There wouldn't be a disincentive to take promotions or apply for better jobs. People earning decent money shouldn't get subsidised rent but equally they shouldn't face eviction just because they work hard.

    The retirement market is a different ballgame and there is a desperate need for subsidised retirement social housing. That alone would free up significant amounts of family size social housing.

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    Has this allowed for the right to buy. The government is building houses but selling them at a faster rate. The equation is broken

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    In my area social landlords are buying up HMOs because they can get enhanced housing benefit which is three times as much as I get paid for housing unemployed tenants and sometimes when housing care leavers they can get as much as £2000 per week and that is only the start they get other subsidies and grants. I only receive, when I get it, universal credit of £60 a week for the same tenant. Can anyone, therefore, explain to me why it is cheaper to house unemployed tenants in the social sector?
    Jim Haliburton
    The HMO Daddy

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