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  • Stickies & Evergreen

    Housing crisis? You ain't seen nothing yet! A "perfect storm" is brewing.

    More than 165,000 of the most affordable rented homes have been lost across England in just six years, according to new analysis from the Chartered Institute of Housing (CIH).

    The organisation is predicting that loss will reach 199,000 by 2020 – making it increasingly difficult for people on lower incomes to access a decent home at a price they can afford.

    Funding for social rent, which tends to be around 30-40 per cent cheaper than market rent, was cut by the coalition government in 2010. Since then, funding has been targeted towards homes for ‘affordable rent’, which can be up to 80 per cent of market rents.

    But CIH said its projection of future losses is lower than in previous years because the government has made several positive announcements in recent months, including more funding for housing associations, lifting the Housing Revenue Account borrowing cap for local authorities and abandoning plans to force councils to sell their most valuable empty homes.

    Figures from the Ministry of Housing, Communities and Local Government and Homes England show that 117,828 local authority homes and 47,869 housing association homes for social rent were lost between 2012 and 2018. Despite some continued new build for social rent, numbers have continued to fall – because of right to buy sales and properties being converted to ‘affordable rent’ or demolished.

    Based on current trends, CIH is projecting that 199,000 homes for social rent will have been lost between 2012 and 2020 – 140,828 council homes and 57,869 housing association homes. Those figures include the loss of an estimated 3,000 homes due to the West Midlands pilot of the extension of right to buy to housing associations.

    Chief executive Terrie Alafat CBE said: “For many people on lower incomes, the only truly affordable option is social rent. It is simply unacceptable that we are losing so many of our most affordable homes at a time when more and more people are in need.

    “We need to increase the number of homes we are building but it’s not just a numbers game – we need to make sure we are building the right homes, in the right places, at the right prices.”



    Full/source article

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    Those 'social rent' properties have been bought under RTB by the tenants who supposedly couldn't afford to buy or rent 'affordable rent' properties is how I read it?

    It stinks tbh that RTB still exists in England, but that's the Cons for you!

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    One of the last houses I purchased in 2015 was ex RTB I paid 75k and it was purchased from the council for 7k in 1985

    so if any one made a killing it was the first  owner not a BTL landlord

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Before the 1977 change to needs-based tenancy allocation of Council homes it was overwhelmingly working families who gained a new tenancy - with prospective tenants being vetted pretty much as mortgage applicants are.

    Thus in 1980 you had a very large cohort of fairly well off tenants - whereas converse applies today after 40 plus yrs of allocation to the relatively destitute.

    HB claimants in SRS in 1980 were a mere 10% vs 75% today (EHS 2017).

    In 1979 average Council Tenant earned 73% of then current average wage - around £21000 pa in today's money.

    Also noteworthy is that Council rents doubled in the 4 yrs from 1979 to 1983 - and with 90% of tenants paying their own rents from own income - many would have logically been concerned about future rent affordability - having seen annual rent rises close to 20% pa compound.

    Hardly surprising that 1 million Tenants opted for RTB in the 1980s decade (average discount being 50% of market value).

    Most of those buyers would have very soon seen that their mortgage payments were lower than their neighbours' Council rents - with post 1983 rent rises averaging around 6% pa compound on long term average.

    In nominal terms - the 1979 Council rent for a Home Counties 3 bed semi would have been around £10 weekly vs £150 weekly today.

    So today's rent of £7800 pa is over 15 x the build cost from 1940s/50s when many such homes cost a mere £500 in build costs. In fact LAs had a massive capital gain on acquisition costs.

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    Also worth noting that after decades of LSVT millions of former Council homes have been transferred to Housing Assocs - HAs now control some 60% of all Social Housing - and now charge around 11% higher rents than Councils.

    Main transfer incentive was that LAs were always cash strapped for repairs/maintenance - whereas HAs would be allowed to borrow for that purpose and tenants were told they would end up with better standard of homes if they agreed to transfer to HA ownership.

    Relevantly too - former Council Tenants were given a sweetener to persuade them to vote in favour of transfer to HAs - as they mostly received a preserved RTB - hence when Govt said they were "extending RTB" to HA Tenants that was pretty economical with the truth - as most HA tenants already had that RTB anyway.

    The remaining SRS stock is around 4.3 million homes across UK - with voids of around 365,000 pa or around 8.5% pa.

    Aggregate RTB sales since 1980 are around 1.8 million - so that tranche is effectively denying access to say 153,000 households from Council waiting lists each year.



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