The Role of the Local Authority in Providing Affordable Housing

England’s social housing market is “shattered”. But can it be fixed? As the social housing system in the UK calls for the support of local authorities, housing associations and local communities, who can change the negative perceptions and outcomes for this slowly declining sector. Asthe government calls for local authorities to develop a strategic housing plan, the social housing sector experience a period of change.

When thinking about affordable housing many associate it with the social sector, whilst others will consider an individuals or families financial welfare. For many low and middle-income households across England there isn’t enough affordable housing. I will explore the UK’s crisis in affordable housing and discuss the need for it. I will explain how national governments and local authorities are attempting to meet the demand with an adequate supply. I will also compare different governmental views and how they provide subsides and schemes to achieve a sustainable goal for the future by developing policies for authorities to follow nationally. I will discuss how these have impacted not only the tenants but also Britain’s housing market and draw up a conclusion if their actions are impacting the housing sector. To conclude what does the future hold for the UK’s affordable housing sector.

Social housing is rented accommodation that is governed by local authorities, as opposed to being privately owned. Social housing exists to house those who simply can’t afford market house prices. This offers lower rent to those who are most in need. In 2016 the Conservative government decided to make a cut in social housing rents by 1% a year. In the coming years no one anticipated the effect it would hold upon the UK’s housing market. With a considerable drop in affordable housebuilding – 27,000 planned-for homes were not constructed. This had adverse effects for housing associations, with massive deductions from their annual incomes, there was no sustainable future for this market.

Social rents are continuing to rise, with many tenants struggling to meet the demands for the increasing payments. As the conservative government are a pro-market leader, their primary goal is home ownership and getting people onto the housing market. But are the government doing anything to support those who just can’t afford, currently 92% of councils in England are failing to meet the demand for affordable housing. This is just unacceptable! Today, the local authorities are being questioned about the extent to which they are involved in the role of strategic housing. Further research highlighted that many local authorities still haven’t developed a sustainable housing strategy which meets the governments recommended criteria.

The Town and Country Planning Association (TCPA) state ‘place the needs of developers and landlords’ above that of the general public and, ‘has spawned a wasteful and costly industry [.] which has the net effect of dramatically reducing the delivery of affordable housing’. Reference!!! This urging the government to update crucial documents within the planning profession such as the NPPF, in order to begin to meet national targets and to construct affordable homes.

Over recent years, government funds have been cut for affordable housing. Upon further research it was discovered that presently only 14% of government spending is granted, where are back in the early 90’s grants met 75% of grants Reference!!!. It is predicted that in the future government grants will be non-existentand new developers will be expected to fund their own schemes by building more developments of mixed private ownership and private rented properties, these will be placed on the market at full market price, these profits will allow them to provide a fraction of social housing.

https://www.theguardian.com/housing-network/2015/jul/22/government-five-year-vision-social-housing

https://www.pbctoday.co.uk/news/planning-construction-news/making-housing-affordable-a-focus-on-construction/41223/

https://england.shelter.org.uk/campaigns_/why_we_campaign/Improving_social_housing/what_is_social_housing

Throughout the UK the waiting list for affordable social housing is ever growing. There is no uncertainty that there are affordability issues, with rising house prices, combined with the aftermath of the credit crisis. With affordability issues occurring, this also effects households in other ways such as overcrowding. Some would say that at the current rate at which we are housebuilding, it simply won’t sustain, unless we are prepared to except an affordability crisis and social division. However, it all boils down to the lack of an affordable housing supply and with the correct input from local authorities, this could be an effective solution to this national crisis.

Here in the UK the government offers subsides to support families when it comes to housing and welfare.However, are a number of arguments for and against government subsidies for social housing. Often the government find it difficult to get involvedwith social housing schemes, due to public responsibility. Other reelected governments have before led the housing market to disrepair and left many UKresidentsin slums. Leaving many governmental parties reluctant to take the hands-on approach, leaving it to filter down to communities and local authorities.

Some theorists would argue that a system based on commercialism is preferable for most governments, here the role of the government is to act as quickly as possible to ensure the housing market is sustainable. Since the 1970’s when government subsidies for social housing were first introduced, the housing crisis wasn’t about meeting demand with the supply, it was about delivering enough affordable properties. Here subsides were given to focus on specific sectors e.g. Housing – many believe that tenants weren’t able to waste their payments of things that weren’t deemed as a necessity.Today people argue that this old scheme should be reintroduced as a means of tackling the affordable housing shortage, however they suggest doing in such a way that traditional large housing estates e.g. Halton Moor aren’t developed, this introduces segregation in classes. Instead they want to encourage the construction of mixed communities and through government policy address issues such as welfare dependency.

Overall the most effective outcome when providing a subsidy to the social housing sector, is to adopt old methods by implementing object subsidies, this will ensure mixed communities are being formed. Ideally this will slowly develop into a self-financing sector, this will reduce strain on the government.However, in recent years government objectives have changes, they no longer grant object subsides for affordable social housing, but would rather focus of affordable housing as a whole, with introduction to schemes like the Affordable Rent Program, something I will continue to discuss in further detail later on in the essay.

The British Housing system is categorised by tenure type. There are 4 main tenure types, these are owner-occupation, local authority housing, registered social landlords (these can include housing associations) and private rented housing. In recent years Britain has seen a dramatic change in tenure. With an increase in the private rented sector, due to rising house prices.

Nationally there has been an increasing focus on forming relationships with local authorities, local developers and stakeholders, to identify a national need for affordable housing, which includes planning future schemes, it is also important to ensure that the local housing strategy is working in partnerships and that it reflects a wider national strategy, this will help promote community sustainability.

An interesting case study that I found, is somewhere not too far from home…Scotland. Scotland have a policy, by where local authorities are granted a greater responsibility in allocating social housing grants, this allows more ownership for Registered Social landlords (RSL); here local authorities will no longer continue to provide housing. This is a policy in which the UK are interested in adopting.

https://www.jrf.org.uk/report/local-authorities-influence-social-housing-sector

The Right to Buy scheme is a policy which gives secure tenants of social housing; both owned by the council and housing association, the legal right to purchase the property in which they live. (HM Government, 2017). These properties are available to buy at a slightly discounted rate. This offers financial stability for many families and finally allows them to break of the rental ladder. Since this scheme was introduced over 2million homes have been bought (Manns,2007) Unfortunately, this scheme has generated more issues for the UK housing market than benefits. The main issue is there is not enough supply to meet the demand, with not enough houses being built to replace the properties being purchased through the Right to Buy scheme. Only 1 property for each 10 sold is being replaced. (Generation Rent, 2016) This factor is a major contributor to the British housing crisis, with a lack of affordable housing resulting in the formation of Generation Rent.

In 2015 the new conservative government presented five measures impacting social housing. The first measure redirected government subsidy from social affordable housing to starter homes, these include homes built for first time buyers, homes which are sold at slightly lower than average market value. The second measure encouraged close relationships with councils, as it altered ‘planning obligations like the Section 106 agreement, stating the inclusion of social housing on new developments. The third measure involved the introduction of the Voluntary Right to Buy scheme, an opportunity organised by housing associations. In 2016 the government implemented the Housing and Planning Act 2016, this requested councils to sell off any high value properties, in order to help fund the Right to Buy scheme. The final measure introduced a Pay to Stay plan, this ensured that those who didn’t need to be fully supported, would have to pay slightly high rents.

But if a Labour government was to come into power, current policy would need to be change. As they don’t agree with partnerships and joint ventures with private sector businesses. They would simply grant greater funds to local authorities, allowing them to have an impact. However illegal loop holes in planning allows housing developers to get away with building masses of affordable homes, as the local authorities state that new developments must have approximately 25% affordable housing. Whilst they develop small estates of roughly 60 houses, this doesn’t equate to very many contributing to the governmental scheme.

The Affordable Rent Program requires partnerships with housing provides, like Leeds Housing Federation. Here they are able to charge higher rents and use all of these available properties. Some would argue that this scheme, fails to meet the supply. Upon combining my research, it is clear to see that there is correlation between the rise in object subsides and the decreasing supply of affordable houses, for those in need. Overall thisleaves the government in negative equity, although it is cost effective and it enables to see this sector taking its first steps into being self-financing, this can’t continue as the gap between supply and demand slowly begins to increase.

As house prices in the UK skyrocket, a new division of landlords emerge, and it seems they ae making a killing from Generation Rent. This seems unfair for those coming from lower middle-income backgrounds, with fewer reasonable priced accommodations. Affordable housing is an essential part of the UK housing market, this enables people to have the opportunity of home ownership anywhere in the UK no matter their financial background. Since schemes like The Affordable Housing Program being introduced to the housing market, they have already impacted how residents rent. With more houses being developed for this scheme opposed to developments plans for social housing, slowly but surely numbers of households in affordable housing continues to rise.

However, with such large proportions of affordable housing in urban areas, will this influence land and property value? If so how will this shape the housing market? Today, many developers have an excess of 25% affordable housing being integrated within new developments, thismeets many local authority targets. But it’s this mix of private housing and affordable housing which has a negative effect on the desirability of an area.

The reputation of social housing, also offers a new concern forlandlords. With many arguing that the term ‘Social Housing’ needs to change as it has an undertone and a negative connotation. (National Housing Federation North, 2000).

The effects of implementing affordable housing into a new luxury development certainly affects both land and property values, however it is strongly argued that this is a small price to pay to prevent segregated zones of cheap affordable homes similar to the 1960s construction of council tower blocks. In more affluent areas it can reduce values to such an extent that the alternative of higher Section 106 payments and increased Council Tax payments.

Large social housing estates in Britain stereotypically have a poor reputation, where residents tend to neglect both their communal and private space. Housing estates are also often associated with crime and social injustice. Today, although some are ‘beyond repair’, development schemes have been introduced to help these less desirable areas. The poor reputation has also built a poor perception of those who live there.

Many housing developments must fulfil the government’s target of 25% of social housing mixed within any new development, as was previously mentioned.They believe that the integration will encourage a better society and help inspire those who aren’t aswell-off. However, it is still common for segregation to appear within the development schemes. There is a communal segregation as well as a physical one, as privately-owned properties are often better located, in prime locations of the development; opposed to the affordable properties whichare often set away from the rest of the development. Some developments use the peperpot method to incorporate affordable social housing in order to reduce social segregation within a development.

As the theory stands by introducing this mix of tenure types throughout some developments, it leads to better integration with affordable home owners. Whilst this is probably the case, it will influence the market value of the properties in the scheme and potentially in the future prevent developments taking place.

Statistics show that here in the UK, we have a higher percentage of social housing than the rest of Europe and it has produced a welfare dependency. Some state that social housing should be prioritised for those who are really in need. This scheme should be simply seen as a stepping stone to ownership.

As the government faces criticism for the run-down stare of many social housing estates across the UK. Some of these housing estates suffer from both poor reputation and material disadvantage. It is these areas that are host to drug and alcohol abuse. These negative opinions have created a certain stigma about individuals and groups who live in these isolated neighbourhoods, this has proved to be an increasingly prevalent in the social rented sector.

The future for the UK’s housing associations is steady, but in order to do so they will need to increase market sales to support other social housing developments across the country. The government has granted ?2.9 billion through the Affordable Housing Program, this will help new developments excel. It is important that local authorities, stakeholders and housing associations consider their roles in the social housing sector, and how they canincrease a sustainable provision for social housing, continually supporting tenants. Defining their overall strategy and also the impact this sector has in shaping the housing market for future generations.

https://www.publicpolicyexchange.co.uk/events/HC15-PPE??

https://www.reform.uk/event/the-future-vision-of-affordable-housing/

https://www.psdgroup.com/Sectors/Property/The_Future_of_Affordable_Housing/

https://www.theguardian.com/society/2009/nov/25/affordable-housing-fears-residents

From my research it is clear to see that continual spending on temporary accommodation isn’t a sustainable solution for this country, a clear affordable housing strategy must be put into place in order to combat the rising demand for accommodation. However, it is finding a long-term solution that is maintainable which is half of the governments problem – something all governmental parties are struggling to solve. As local authorities attempt to leave their mark on the housing sector by building across the different tenures, with priorities for affordable social housing schemes. The role of the government is to ensure that the needs of those involved in schemes such as The Affordable Housing Program are being met appropriately. This can be achieved successfully and sustainably through a balance of policies, including both intervention by object and subject subsidies. National Governments and local authorities must understand the need for an increase in affordable housing and address the strengths and weaknesses of the current schemes to date. Overall, I think this is an important national issue which needs to have the full attention of national governments, right down to small communities of affordable social housing. However, without these close partnerships no major changes can occur for the housing sector, resulting in individuals continually being failed by our systems. Even with grants from private sector investment to help change social housing, it is clear to see that in the past this method has still not been successful, so that leaves me with the question, even though alternative schemes have been addressed, with no impact for the public socially, when entering these programs who is it that really wins?

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The Role of the Local Authority in Providing Affordable Housing. (2019, Aug 14). Retrieved June 25, 2021 , from
https://studydriver.com/the-role-of-the-local-authority-in-providing-affordable-housing/

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