It has been 100 years since the Addison Act, the landmark bill which saw the large-scale national expansion of public housing just after World War I. A lot has changed over the last century, but the social rented sector continues to be an important tenure option. This blog looks at the role of social housing in context of the homelessness crisis and what might happen if current tenure trends continue.
The recently published 2017-18 English Housing Survey is an annual governmental study into people's housing circumstances and the condition and energy efficiency of housing in England, carried out by the National Centre for Social Research in consortium with Building Research Establishment (BRE) and CA Design Services (CADS) housing surveys. Latest EHS figures show that 17% of households in England live in the social rented sector and 19% in the private rented sector. The social sector plays an important role in housing vulnerable groups. Over half of social renters (54%) have a household member with a long-term disability, 22% are lone parents and nearly three quarters (72%) are in the lowest two income quintiles.
The social rented sector also acts as an important tenure for housing those who become homeless. Despite being the smallest sector, the majority of those who have been accepted as homeless were living in this sector. Slightly under a quarter of a million (246,000) current social renters have been accepted as homeless over the last few years compared to 74,000 in the private rented sector. This is unsurprising as social housing is based on need. If a household is accepted as homeless and offered accommodation, they are most likely to be allocated social housing.
Those in the private rented sector are more at risk of becoming homeless than those in other tenures, and the social rented sector provides an important safety net. The majority of households who came to the social rented sector and were accepted as homeless over the last few years were previously in the private rented sector. Over the last three years 57,000 households who had been accepted as homeless have moved into the social rented sector. Of these, 33,000 had previously been in the private rented sector – the largest proportion at 58%.
The continuation of current trends emerging in the private rented sector – its size and relative cost – may present a very real concern. A recent report by the All-Party Parliamentary Group on Housing and Care for Older People points to the potential of elderly private renters becoming increasingly vulnerable to homelessness. Using the Affordable Housing Commission (AHC) definition, the report suggests that when the cost of housing exceeds 40% of income it becomes unaffordable. Using this definition of unaffordability, the report suggests by 2047/48, in an optimistic scenario, 36% of older renters (aged 65–74) will live in unaffordable housing, whilst a pessimistic scenario would see 70% of older renters in unaffordable housing. At 33% of household income (including housing benefit), private renters currently spend more of their income on housing costs than those in other tenures. Private renters in the oldest age group (75 and over) tend to spend a high proportion of their income on housing costs - 39%.
Given that the oldest private renters currently pay an average of 39% of their income on housing, a small increase would tip the average proportion of income on housing for this group into the AHC definition of unaffordable. In addition, with fewer younger people getting on to the housing ladder, it is likely we will see an increasing number of people in the oldest age group privately renting. This, especially if combined with a small increase in the proportion of income spent on housing, means we could see a greater number of people in the oldest age group living in unaffordable housing. This could increase the number of older people at risk of homelessness.
The post-First World War expansion of social housing is celebrating its 100th birthday and now we must look to the future. The social rented sector clearly plays a key role in housing vulnerable people and tackling the homelessness crisis, especially for those who move from the private rented sector. As fewer young people get on the housing ladder, an increasing number of older private renters has the potential to result in a large number of households becoming at risk of homelessness.
This could present significant policy implications. With over half of households who were accepted as homeless and moved into the social rented sector coming from the private rented sector, we need to ask some questions. Can the social sector continue to support those who become homeless whilst remaining the smallest tenure? How can the private rented sector better support those who are homeless, or at risk of becoming homeless?