Social housing cuts: Driving the poor out of London

By James Murray

We are all awaiting further details of what the government’s announcements on housing yesterday are likely to mean. But the initial conclusions from their decisions to cut capital funding for new social housing by half, and to apparently raise social rents to 80% of market levels for new tenants, look set to fundamentally attack our vision for housing in Islington.

Our top priority since May’s election has been to build more family-sized social housing for low-income families.

But with capital investment slashed so significantly, almost all the remaining government money is likely to go towards developments already in the pipeline. It will be hard for local authorities to build new homes, and with land values so high in inner London, housing associations will find it difficult too.

The reason we want to build homes for social rent is so that families on low incomes can live and stay in Islington. The only way for this to happen is by having more secure and decent homes suitable for their needs.

But if the government forces landlords to charge new tenants rents at 80% of the market rate, and if, as is likely, this applies to new-build homes, then it would make our vision for new family-sized social housing not just harder to achieve but under threat as a concept.

Such new ‘affordable’ family homes in Islington would simply not be an affordable option for families on low incomes and no benefits. And for those who are on benefits (assuming they’re not cut, or affected by caps), the housing benefit trap for the families involved will become even more acute, and the bill to the state will rise. Private rents continue to rise, so even 80% of the market rate will be completely unaffordable.

Furthermore, if this goes ahead, it is not yet clear whether tenants would count as having new tenancies if they transfer from one social home to another. This may well be the case, particularly for those who transfer between a local authority and a housing association.

With overcrowding being one of our most pressing problems in Islington, this could create the grotesque situation where families would be stuck in their overcrowded (but genuinely affordable) home, even if a better home is available – because they can’t afford the new rent in the new property. They could be faced with the bleak decision of either enduring unacceptable overcrowding or moving out of London.

Likewise, our attempts to reduce under-occupation – where we help people to move to smaller properties if they want to, thereby freeing up larger properties for overcrowded families to move into – could be dealt a blow as existing tenants are put off moving by the vastly greater rent of a new property.

We remain steadfastly committed to fighting any changes to security of tenure. The initial indications from government are that tenants may lose their home if they start earning enough to buy in their local area on the open market. Ironically, this is one change that would probably have little effect in Islington; the cost of open market housing is so great here that very few in social housing will ever afford it.

But this is little comfort, and the principle of security is a central tenet of social housing that we will fight to defend. Otherwise, the government’s moves towards scrapping security of tenure, and raising rents to near-market rates, point towards an end for social housing as we know it altogether.

And whilst we try to fight this attack on social housing, we will also be confronted by a massive challenge just to stand still. In places like Islington, the decrease in new social homes and the government’s new notion of what ‘affordable’ means, alongside the already-announced benefit cuts and caps on housing benefit in the private sector, will all lead to a huge increase in homelessness. More resources will likely be diverted simply to cope with the painful effects of this government’s vicious policies.

As a council, we are committed to our goal of helping low-income families live in decent, secure, and genuinely-affordable homes in Islington. We will spend the coming weeks and months working out how to achieve this in the context of government’s announcements that will make this much harder.

The government’s plans also seem to present an ideological rejection of our principles. The government’s mantra of the “undeserving poor” seems to mean that even if you work hard, if you’re on a low income you don’t deserve to live in London.

As we await further details, we will ready ourselves to fight for what we believe in, in whatever ways we can. But make no mistake; the government’s announcements on housing are going to attack our plans and our principles very hard indeed.

James Murray is the Executive Member for Housing on Islington Council.