Social housing tenants and residents have reacted with anger and dismay at Government’s announcement allowing social rents to rise by up to 7%. Many say that it will inflict an unmanageable burden on their budgets.
It is expected that almost all housing associations will utilise the full allowance. Supported housing is exempted from the rent increase limit.
The Government social rent cap does not restrict the amount that service charges can rise. Tenants and residents therefore anticipate an even greater squeeze on household income after service charge bills are paid.
The table illustrates the impact of a 7% increase in rents
The rise for shared owners would have been even higher as their tenancies normally include a stipulation that their rents will rise by the Retail Price Index figure, with an additional percentage added, usually between 0.5% and 2%. Based on the September RPI figure (12.1%), their rent rises will be around 14.1%.
However, the National Housing Federation has said “housing associations representing 80% of shared ownership homes are also committing to cap rent increases for shared owners at 7% in 2023/24, matching the social rent cap”
Groundswell of Debt
The rise will cost the taxpayer an estimated additional £7 billion in Housing Benefit payments for eligible claimants.
The impact will be felt directly by many others and force even greater economic sacrifices. Keri*, a housing association social renter said:
When I first became a tenant of social housing I paid £40 per month. If rents had grown with inflation, today that should be £320 per month. I actually pay £650″
My family has cut back on everything. My children are in school and in September we had to buy everything for the uniform because they had grown out. In October we had much bigger bills for gas and electric even though we cut back on them. After Christmas we will then need to find more money for rent. We don’t have it.”
Mood of Anger
Another tenant, Susan*, summed up a growing mood of anger asking “When do we take to the streets?”. But as well as the prospect of protests, tenants and residents are increasingly pledging to withhold payment of the April rises, and are forming a collective to provide each other with support. The group began with numbers signing the SHAC Pledge.
The rises will raise some additional income for housing associations but will also mean a groundswell of tenants falling into arrears. Defaults on rents were already rising at a steady average of 10% per year between 2018 and 2021, according to the Regulator of Social Housing’s Global Accounts. They stood at £591 million in 2018, but had risen to £704 million by March 2021.
This was before inflation soared to a 41-year high, which has meant food, energy, and travel also rose sharply, plunging many households into unprecedented levels of debt.
SHAC And Partners Resist
SHAC and a coalition of housing groups have lobbied government to freeze rents and service charges for social renters and shared owners, and to ban evictions where tenants and residents are unable to pay.
Homes for Us coalition partners include SHAC, the New Economics Foundation, Homes for All, Defend Council Housing, Housing Action Southwark and Lambeth, and MedAct
The Homes for Us coalition handed in an outsized letter to the Government housing department, and called for government targeted support for councils and housing associations on a means tested basis.
The campaign will continue. See more here.
* Not their real names.