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Housing the valleys

June 25th 2018

New research supported by the Joseph Rowntree Foundation sets out solutions to affordable housing for low-income households in the south Wales valleys. Victoria Winckler takes a look at the findings.

Remember 2015? It was the year that – among other things – brought one of the biggest threats to social housing yet – the extension of the Local Housing Allowance cap to social housing tenants.  The cap would have not only made it impossible for social housing tenants reliant on benefit to pay their rents but also challenged the business model of some social landlords.  The plans to extend the cap were dropped in October 2017, but the cap had highlighted a previously-ignored problem, namely the affordability of social housing especially where housing demand is relatively low.

A team from Sheffield Hallam University were commissioned by the Joseph Rowntree Foundation to come up with some solutions. You can read the summary here.

The challenges

The research began by identifying three big challenges:

  • Residents face low incomes and high housing costs.

Average social rents for two-bed properties are unaffordable for 46% of social tenants (as assessed by rent-to-household-income ratios), meaning that rent takes too big a chunk of many households’ incomes.

  • There is an under-supply of appropriate housing in many areas.

Even though demand is relatively low, across the Valleys there are projected to be 5,076 fewer social housing units than required by 2026.

  • There is an over-supply of certain housing types in certain locations.

But not everywhere has a shortage of housing – Blaenau Gwent had levels of long-term vacant social housing dwellings that were approximately five times the national average in 2015/16.

The research didn’t just stop at identifying the problems – crucially it also developed solutions, as follows.

Recommendations

  1. A more effective and targeted use of existing grants and other finance.

A key recommendation is that the current arrangements for financing social housing in Wales should be changed to recognise the specific circumstances of the south Wales valleys.

2. Advocating changes to Local Housing Allowance (LHA)

LHA determines the support available to tenants with their rent, and the team recommend major changes to how LHA is determined along with improving the supply of quality properties at LHA rates.

3. Support people to reduce whole housing costs and access employment.

It’s not just about housing costs – boosting incomes matters too. And while wage rates and benefit levels are outside the gift of the Welsh Govenrment and landlords, they can help to increase household income  by reducing housing costs – including rents – and supporting people into work.

4. Adjust and vary social rents locally so they reflect local incomes and demand to address
affordability issues.

Ass well as changes in housing finance and income levels, flexibility in rent setting can make a difference too.

5. Develop ways to deliver locally-tailored responses and strategic action at a wider scale.

Last, the research found that housing markets don’t run north- south up and down administrative areas, but cut across the region. This requires a different strategic approach, including a possible heads of the valleys mechanism for planning.

The urgency that came with extending the LHA cap to social housing may have gone, but the challenge to tenants and social landlords alike has not.  If the Welsh Government was serious when it said in is ‘Prosperity for All’ paper that ‘[w]e want everyone to live in a home that meets their needs and supports a healthy, successful and prosperous life’ it will act on these recommendations very quickly.

Victoria Winckler is Director of the Bevan Foundation, an influential independent think-tank, and chaired the project advisory group

 

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