Million Homes and July Budget 2015

Budget July 2015

At Million Homes we welcome today’s budget announcements to cut social rents by 1% a year for the next 4 years. This will help tenants who have faced many years of above inflation rent rises. It will help some of the poorest households who are transitioning back into work.

Back in 2014, Million Homes research found social tenants were paying up to £500 more than they needed to. Housing Associations were making a £2 Billion annual profit. This year, profits have risen still further, to around £2.4 Billion.

Research by consumer group “Which?” found a similar pattern – their research showed above inflation rises amounting to around £450 for social tenants. We wrote about the highest level of inflation for social tenants here:

https://millionhomes.org/news-and-views/by-topic/inflation-rate-highest-for-social-tenants/947

Social housing margins were also high in comparison to utilities, such as water, electricity and gas. Margins were as high as 25.7% for the largest landlords. Margins have increased further this year.

https://millionhomes.org/news-and-views/by-topic/water-water-everywhere/948

In our “A Better Deal for Nation Rent” we suggested an approach for social value – where social tenants and the amount which they could pay, was considered in rent setting by landlords.

In our earlier paper, Nation Rent, we proposed a new funding approach – where homes could be provided across a range of rent levels, with different ownership options, to meet housing needs and aspirations over time.

In the context of today’s Budget announcement that social landlords will be able to charge up to full market rents for their higher earning working tenants, the role of stronger regulation and consumer tenant value will become ever more important. To see the recommendations in our “Better Deal” paper, take a look here:

READ:   Nation Rent- time for something new?

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