Homes England, has announced its list of ‘Strategic Partners’ to receive funding under the Affordable Homes Programme (AHP) over the next five years (2021 to 2026). Although the funding is from central government, Homes England is the government body responsible for allocating the funding and monitoring its use across England.
The Homes Englad announcement lists 35 organisations.
Each will receive a share of £5.2 billion.
The grants are for partners to build nearly 90,000 new homes.
While the government and grant recipients may be celebrating, those in housing need, and tenants and residents are not.
The Unaffordable Homes Programme
The name of the ‘Affordable Homes Programme’ is an Orwellian twist, since the homes will not be affordable to the vast majority of working people.
AHP applies to a home let at anything up to 80% of prevailing market rents. In June, the Guardian reported that UK house prices were rising at “their fastest rate since 2004”, with the annual rate running at around 13%.
This percentage is far higher than pay rises most workers will have received. Such increases will quickly eat away the 20% subsidy that AHP provides.
The Loss of Social Rented Homes
Even if the AHP programme delivers all the homes promised, they will only be let at sub-market rents during the first tenancy. There are no guarantees that the next tenant will be on the same terms.
The most heavily subsidised homes are those let at social rents. These can be anything up to 50% of market rates. According to the Chartered Institute of Housing, over the last eight years, 70,000 new social rent homes were built, which sounds impressive until the 280,000 social rented homes lost in the same period is factored in.
The vast majority of those losses occur when a social rent tenant moves out, and the home is re-let at a higher rate. Similarly, those let at ‘affordable housing’ rates initially are also vulnerable to conversion to full market rent levels when the first tenant leaves.
The development of homes at sub-market rents is therefore a government sleight of hand that enables them to quote impressive sounding numbers within their generous definition of affordable housing. It makes for attractive headlines. Behind the scenes, the sector is converting homes to higher rents at a far faster rate than government is replacing them.
From Public Housing to Private Profit
Not all the ‘strategic partners’ are social landlords. The list includes private finance house Legal & General which will receive £125.5 million to build 2,121 homes, as well as four ‘for profit’ organisations. It continues the ideologically driven push for a full privatisation of public housing in the UK which began with the transfer of homes from councils to housing associations through the controversial ‘Large Scale Voluntary Transfer’ scheme.
Even amongst the housing association cohort, the list contains a rogues gallery of familiar bad landlords. Clarion for example will receive £249.7 million to build 4,770 homes outside London. They also separately received £24 million from the Greater London Authority (GLA) to fund London development, and were the biggest housing association recipient of GLA grants. In August, ITV News investigated “abysmal living conditions [including] collapsed ceilings, rats, mould and damp that dozens of residents were forced to live with for many years, despite complaining to their landlord Clarion – the UK’s biggest housing association.”
Shortly after the ITV expose, the Regulator of Social Housing launched an investigation into Clarion, and to widespread amazement, it declared Clarion free of “systemic failure”. This was despite more than 500 repair jobs on the estate prompted solely by the ITV News article.
The Ministry of Housing responded that “The conditions in the homes highlighted in this case were appalling and we have been clear this is unacceptable. Clarion have acknowledged this … “.
Nonetheless, within days the same Ministry had granted Clarion a multi-million pound share of grant funded by the taxpayer.
As an aside, the chief executive of Clarion previously worked in a senior role at the Regulator of Social Housing.
Travelling in the other direction is Peter Denton. He was newly appointed to the top job at Homes England from his former role as chief executive of Hyde.
It is no surprise therefore that Hyde is another recipient of the magic money tree’s bounty. The landlord is to receive £250m to build 3,000 units.
Denton’s legacy at Hyde was a great deal of misery for tenants and residents, and a corporate reputation for fleecing them through service charges.
The Housing Ombudsman for example reported complaints about Hyde Housing were running at a rate of more than twice the national average in 2019, of which around 14% related to service charges. This figure had doubled since 2018/19. Hyde was found guilty of maladministration in 13 of the 27 cases within the Ombudsman’s jurisdiction which reached a conclusion during the year.
Apparently, maladministration at a social landlord is a highly desirable qualification for a job doling out government money to housing associations.
Follow the Money
Following the money trail exposes one of the underlying reasons for government’s tolerance of bad housing from housing association landlords.
Both Homes England and the Regulator of Social Housing are subsidiaries of the Ministry of Housing, Communities and Local Government. Indeed the two organisations were for a while a single entity; the Homes and Communities Agency.
The reality is that both the Regulator and Homes England are subordinate to MHCLG, it is inconceivable therefore that Clarion would have been downgraded by the Regulator a mere two weeks before its sister organisation, Homes England, listed Clarion as one of its partners for delivering new, high profile, government-funded development.
This is a system underpinned by incestuous job swaps and mutual backscratching between those regulating, funding, and governing housing associations. The embedded vested interests that flow with the vast wealth shared between government and these landlords tilt the ground sharply away from those in housing need. It leaves no room for maintaining good quality, safe homes. This is swept aside in the race to satisfy a ravenous appetite for building new developments.
A United Housing Movement
To challenge these interests, tenants and residents from all tenures will need to unite behind a sustained housing movement which demands a fundamental rebalancing of power.
It also requires the development of public housing which is delivered and remains under democratic control rather than the partnership model which excludes both responsibility and accountability.
2 September 2021
Disclaimer: The views and opinions expressed in our Blog are those of the authors and do not necessarily reflect the views and opinions of the Social Housing Action Campaign (SHAC).