Social Housing Speed Read – Increase in affordable housing completions and further comment on the new supported housing funding proposals
13th November 2017
Figures released from the Department for Communities and Local Government (DCLG) and the Office for National Statistics (ONS) show that affordable housing completions rose by 27% in England last year.
The Government have also given their supported housing funding proposals announced last week further consideration whilst some in the sector have concerns over the certainty of the funding.
What are the statistics?
According to the ONS, 41,530 affordable houses were supplied in 2016/2017 compared to 32,630 in 2015/2016 (this is including all homes for social rent, affordable rent, intermediate rent, affordable homeownership and shared ownership).
Social rent completions dropped from 39,560 in 2010/2011 to 6,800 in 2015/2016 to a further 21% reduction in 2016/2017 with 5,380. However affordable rent completions rose 47% from 16,550 to 24,350 and shared ownership completions over doubled from 4,080 up to 8,810.
Alok Sharma, Housing Minister, recognises the progress but also the need for more to be done to tackle the housing crisis. He states that “that’s why we have increased the affordable homes budget to more than £9bn and introduced a wider range of measures to boost building more affordable homes”.
What has influenced this increase?
The accompanying report to the statistics recognises the Governments 2016/2021 Affordable Homes Programme and increase in homes delivered through section 106 agreements as the two main factors that have driven the increase in completions.
92% of the affordable homes provided in 2016/2017 were new build homes with the remaining 8% through transfer of existing housing stock.
Melanie Rees, head of policy at the Chartered Institute of Housing (CIH), is encouraged by the 27% increase however stated that “very few of them were for social rent, which is significantly cheaper than market rent and the only truly affordable option for many people on lower incomes”. In addition to the Governments extra £2bn investment for affordable homes, Melanie suggested that the Government “can go further in rebalancing its housing budget away from the private sector towards affordable housing”.
Band rates for the newly proposed ‘sheltered rent’
Representatives from the supported housing sector have been told by civil servants that Government are considering altering the ‘sheltered rent’ policy to include separate bands for sheltered housing and extra care.
Bruce Moore, Chief Executive of Housing & Care 21, said that “two bands – one for general retirement housing, one for extra care – would be what they would contemplate”.
Extra care housing typically involves greater facilities of support and care for tenants, 24 hours a day. Sheltered housing however is usually based around visiting support, therefore requiring different costs.
A similar view was offered by Domini Gunn, a freelance consultant, during a presentation at the CIH Eastern Conference when she said “just from the conversations we’ve had in the past 24 hours, they’re just rationalising you can’t have a single financial model across sheltered and extra care, because they vary” so it seems this model of funding is being closely considered by Government.
Uncertainty over short-term supported housing funding
Taking the place of statutory funding is the ‘ring fenced’ grant given to local authorities to dispose of at their discretion. Councils will no longer be under a statutory obligation to pay all rents deemed reasonable, as they are at the moment. Instead, they will be placed under a statutory duty to secure value for money.
Alan Fraser, commenting for Inside Housing has said that “so far from providing greater security of funding, the new proposal removes funding certainty altogether” and that it is “even worse than the LHA cap policy”.
If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.