Lord Best (pictured), chair of the Affordable Housing Commission and a House of Lords peer, calls on the government to purchase private rentals for social housing

Conversion of private rented homes to social housing, Lord Best suggests, could help turn the tide of the UK housing crisis.

Best says that the private rented sector (PRS) is “unwilling and unable” to house people who are in greatest need.

Only social housing would suit their needs, he suggests, and that as those landlords who are seeking to exit the private rented sector should have their properties taken off their hands by the government.

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A housing specialist with many senior roles and experience in the sector, Lord Best says that there are over two million households renting in the private rented sector who are “under housing stress”.

12 months ago, the Affordable Housing Commission (AHC) published a major report which highlighted what it called “the damaging social and economic effects” of the steady migration over recent years from social housing to private renting. The coronavirus pandemic, he says, has heightened and underlined the problem.

Over the last 20 years or so the social housing sector has been reduced by around 50%, with a corresponding increase in private housing. This, the AHC report – organised by the Smith Institute and funded by the Nationwide Foundation – points out, has shown how affordability had been adversely impacted.

The systemic tenure shift has resulted in considerably increased poverty and inequality as millions more households can only access housing that costs “a huge proportion of their incomes”, the report concludes.

Households devoting more that 40% of their income to rent reside predominantly in the private rented sector, and this is the group, the AHC says, are at highest risk.

Therefore, the AHC is calling for a £1.3bn fund to convert private homes to social housing.

During this pandemic, available figures show that several hundred thousand private rented sector tenants are in debt and have built-up rent arrears. The Commission says that the pandemic has highlighted “the fragility and vulnerability” of the poorest section of the PRS which depends on around 2.5 million private landlords.

Most of these landlords, the AHC report says, own only one or two properties and many are relying on their income from rents, not just for living expenses but also for mortgage payments and management costs.

On the on hand, many tenants have only been kept afloat and averted financial disaster because of the temporary extensions to an eviction ban, and a huge case backlog in the courts.

“Even before the pandemic we could see how PRS rent levels were driving families below the poverty line,” says the AHC.

To make the point, Brent Council claims that its London borough, where there has been a rapid growth in the PRS, with 17% of households and 22% of children classified as living in poverty before housing costs – 32% of households and 43% of children after these costs.

In addition to the costs, people living in these locations have been the hardest hit by COVID, with overcrowding and a lack of outside space.

Re-balance system

The AHC is arguing that there is an urgent need to “re-balance” rented housing by refunding the social housing sector and “recognising that the PRS is not suited to housing all those who must now turn to it.”

The government for its part has been discouraging further growth of the PRS with a tougher tax and regulatory regime and more legislation in the pipeline in the form of a Renters’ Reform Bill.

The government still has a target of 300,00 new homes to be built each year.

Lord Best says: “This may seem the worst time ever to be seeking a huge increase in government investment in affordable housing. The government has never been deeper in debt. Decarbonisation and building safety are both requiring billions more.

“But it may also be the best time. Long-term government borrowing has never been cheaper.

“Investing in the rebalancing of rented housing pays back handsomely – in health and social care savings, in an end to housing benefit costs rising exponentially, in improved productivity and economic revival, and, most of all, in redressing the inequalities and miseries which the coronavirus pandemic has so starkly laid bare.”

5 COMMENTS

  1. “Best says that the private rented sector (PRS) is “unwilling and unable” to house people who are in greatest need.”

    A definition of ‘people who are in greatest need’ would be useful here.

    As a landlord I am not ‘unwilling’ to house somebody with complicated physical needs who is in greatest need due to a lack of suitable properties, but I am ‘unable’ to do so as I don’t have any suitable properties.

    As a landlord I am ‘unwilling’ to house somebody who I consider a high risk, but I am not ‘unable’ to do so.

    “Conversion of private rented homes to social housing, Lord Best suggests, could help turn the tide of the UK housing crisis.”

    Yes it could do. Who’s going to buy the properties? Some councils don’t have a department to deal with housing stock. Would it be housing associations? Would the landlord get a fair price or would it be better for the landlord to sell with vacant possession?

    “Only social housing would suit their needs, he suggests, and that as those landlords who are seeking to exit the private rented sector should have their properties taken off their hands by the government.”

    That sounds more than a little bit like a threat, and suggests that the government will be forcing landlords to allow the government to allow their properties to be “taken off their hands”.

    “A housing specialist with many senior roles and experience in the sector, Lord Best says that there are over two million households renting in the private rented sector who are “under housing stress”.”

    Well, why doesn’t Lord Best buy up properties, do them up, then let them to ‘those in greatest need’?

    “Households devoting more that 40% of their income to rent reside predominantly in the private rented sector, and this is the group, the AHC says, are at highest risk.”

    I wouldn’t let to somebody who needed 40% of their income to pay the rent. Far too great a risk. If a tenant has reduced working hours then it’s up to the tenant to move to a cheaper area, just as it would be for a homeowner. I note the word ‘predominantly’ is used here which makes it clear that there are some people in social housing who are also ‘devoting more than 40% of their income to rent’. I wonder what the ratio of PRS to social housing is? It would have been useful for the article to state the statistics. For all we know it could be 51% PRS to 49% social.

    “The AHC is arguing that there is an urgent need to “re-balance” rented housing by refunding the social housing sector and “recognising that the PRS is not suited to housing all those who must now turn to it.””

    Arguing against who, I wonder? I think most people, including many PRS landlords, agree that social housing needs to increase by a huge amount. And, of course, the PRS is ‘not suited to housing all those who must now turn to it’ and isn’t geared up to do so. As I’ve stated above, I’m willing to house those with physical needs, but am unable to do so as my properties aren’t adapted and my local council won’t adapt a private property to accommodate a person who needs wide doors, hoists etc. The PRS is also not suited to those who have been unwilling to pay their rent or look after a property in the past. The PRS is a profit making section of the housing rental business, and usually supplies carpets and in many cases white goods. My experience of social housing for those in greatest need is that nothing is supplied – no carpets, curtains or white goods. A ‘looked after’ young person was placed in a flat with absolutely nothing, not even any blankets for the night. For social housing to step up to the mark they need to work more closely with social services and other agencies.

    “The government for its part has been discouraging further growth of the PRS with a tougher tax and regulatory regime and more legislation in the pipeline in the form of a Renters’ Reform Bill.”

    You’re not kidding! On the one hand the PRS are being battered with the above, yet on the other the PRS is accused of not doing enough for ‘those in greatest need’. No wonder landlords are selling up and investing elsewhere.

    ““Investing in the rebalancing of rented housing pays back handsomely – in health and social care savings, ……”

    I absolutely agree – so get on with building social housing or buying up older stock and refurbishing it like the PRS does.

    “……in an end to housing benefit costs rising exponentially…….”

    HB costs are most certainly not ‘rising exponentially’ where I live. For example in December 2008 the LHA for a 3 bed was £135.00 pcm, and today it is £136.93. Hardly ‘rising exponentially’ is it? In real terms it’s fallen.

  2. Is he advocating Socialism at large scale in the UK!

    What is next? Transferring private companies to Councils’ ownership, transferring privately owned cars to public transport, private schools to Councils, Supermarkets to charities, etc.

    The opposite is true, Councils need private companies to run their own affairs.

    An advise from an Architect, the solution is to build more rather than a wide scale grab of privately owned properties.

    Good luck!

  3. Many tenants are under housing stress because rents in the PRS have gone up directly as a result of the tax & regulatory regime impose by the Govt! So who is to blame LLs or Govt?

    Social Housing numbers have reduced by 20% no doubt because of the ridiculous Right-To-Buy Scheme where tenants but their property at a huge discount and then sell it on and make a mint!

    LLs simply fill a void left by successive Govts who have failed to address the housing needs of this country and then conveniently scapegoat LLs.

    We are about to enter a real housing crisis – where LLs in the PRS sell up and there is no Social Housing to take up the slack and those ‘most in need’ will be homeless. This is not a sudden problem but one that has been coming for years and which LLs have repeatedly warned about. No doubt it will still be our fault when this happens!

  4. In 2017, Kingston Council threatened a developer who wanted to build 500 plus houses with compulsory purchase order if he presses on with his plans. Eventually, he forced to sell it to the Council’s favourite sport club. It was an opportunity to build many houses but the Council instead fought against it vigorously and by using every means possible!

    The official letter quoted

    “….use every means possible…that every future proposed use of the land for house building is vigorously resisted. In my letter to the Council I also asked that they consider the “nuclear option” of a Compulsory Purchase Order should this matter not be brought to conclusion in the near future – although I accept that this is a legally complex and expensive option….”

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