Councils could make major savings with more social housing

An increase in social housing stock could save councils nearly £600m a year on housing support, finds a new report from the Chartered Institute of Housing (CIH) and the Centre for Homelessness Impact.

The report found that if councils were able to replace the 73,700 private rented lettings currently used for temporary accommodation with social rented accommodation £572m could be saved each year.

It also highlighted that the Exchequer could save £1.9bn each year by moving recipients of housing benefits of Universal Credit from private rented accommodation to social rented housing, while also making low-income households less vulnerable to homelessness.

Dr Lígia Teixeira, CEO of the Centre for Homelessness Impact, said: ‘We should ask hard questions about whether the very large sums paid in benefits to subsidise the housing costs of people on low incomes are being used in the most effective way.

‘While evidence suggests this financial assistance constitutes an important part of the UK’s homelessness ‘safety net’, our report shows that it is possible to make limited resources go further: for instance, by redirecting some of this money into social housing which can be better value and more secure for tenants.’

1.7 million tenants in private rented accommodation receive housing subsidies through the benefits system, which costs £7.9bn a year.

The report found that building 10,000 homes a year in the social rented sector would cost central government around £40m a year but could in turn save £44m a year in housing subsidies if used to house tenants currently in private rented housing or temporary accommodation.

Moving each benefit claimant out of private rented accommodation and into social housing was predicted to save around £1,100 a year in benefit payments and moving each family out of temporary accommodation and into social rented accommodation would save about £7,760 per year.

In related news, new analysis from the Joseph Rowntree Foundation (JRF) highlights that almost one million families on low incomes in England are paying rents they cannot afford in the private sector.

Photo by Henry Becerra