Thursday, October 21, 2010

CSR special: Housing

The Comprehensive Spending Review spelled some extremely bad news in the housing sector. It's a review that will cause hardship for many and homelessness for thousands. It's not simply that Osbourne scaled back the plans of building new affordable homes by 30%, there has been a general assault on rights and benefits that will lead to misery and homelessness.

The ending of Secure Tenancies for council house tenants is the end of an era. The post-war settlement that created affordable homes for working people was a massive attack upon one of the great divides in society - decent housing. As council houses have been gradually sold off the stock has more and more become a backstop to house the most vulnerable in society rather than ensuring the majority have somewhere decent to live.

Those secure tenancies were there to give the poor stability and reassurance, a firm base upon which to build a life. These moves entrench the shift towards using council housing as emergency, short term accommodation - a shift already well underway with the breakup of council housing stock a the growing use of 'Social Landlords'.

As the Telegraph reports there is also a new rise in rents; "new council house tenants face a steep hike in living costs, offering intermediate rents at around 80 per cent of the market rent."

Housing is the bedrock of any community, and as Eileen Short, chair of Defend Council Housing and sister of a well known former minister, said recently (doc) "Attacks on secure tenancies, cuts in housing benefit and forcing up rents will create more debt, evictions and homelessness."

The attacks on housing benefit have been signalled well in advance and we know they will lead to both a new wave of homelessness and an exodus from high housing areas, like London, which already suffer from a lack of essential workers unable to afford high rents and/or mortgages. Indeed this feeds into the benefit cap of £500 a week per household as a family living in a high rent area will find it very difficult to cope with rising rents.

The Citizens Advice Bureau, in a hard hitting press release condemned the CSR and pointed to the that;

"Housing benefit has already been cut back and the extraordinary decision to raise single room rate to 35 year-olds will lead to an explosion of homelessness, and will hit single working people on low incomes as well as the single unemployed. The measure to restrict contribution-based ESA to 12 months betrays people who have paid contributions all their working lives and become sick or disabled.

"We advise millions of people every year, who are often on very low incomes or rely on welfare benefits and public services. They told us that their top priorities for the spending review were simplification of welfare benefits, free to use government helplines and affordable housing. We welcome the announcement that the welfare benefits system will be simplified to make it easier to understand and navigate. In the meantime we urge the government to maintain and continue to improve service standards and ensure the new system is designed with the needs of service users in mind.“
The single room rate, which I'd not even been aware of until the CSR, will mean that under-35s will only be able to receive housing benefit if they are living in shared accommodation. So if you're currently working for the public sector and living in a small flat a redundancy notice will mean you're out on the street as well as out of work.

The news that the government was to spend less in housing did not just mean that the 30% less new build would mean that the more than a million on the waiting lists for social housing would have to wait that bit longer. We also saw an immediate hit on the shares of Barratt Developments (down 4.4 percent) and Taylor Wimpey (down 5.56 percent). The National Housing Federation warned that 1.7 percent of jobs in the construction industry could be lost.

Federation chief executive David Orr said: "The fact that the housing budget is being cut by 60% is deeply depressing – and shows that providing affordable housing is no longer a government priority. Cuts on this scale will come as a devastating blow to the millions of low income families currently stuck on housing waiting lists.

"The harsh reality is that because of these cuts, the new social homes this country so desperately needs, can now only be built by dramatically increasing rents for some of the most vulnerable and poorest in our society. Most tenants simply won’t be able to cover these extra costs, and as a consequence make it more difficult than ever for people to escape the poverty trap and benefits dependency that the Government has repeatedly said it wants to tackle."

All-in-all extremely bad news for anyone not rolling in money. Remember kids, Nick Clegg says the cuts are fair, and I quote "the review is one that promotes fairness, underpins growth, reduces carbon emissions and localises power."