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When is affordable housing not affordable?

November 18th 2019

Steffan Evans considers what more can be done to increase housing affordability in Wales.

Six months have now passed since the publication of the Independent review of affordable housing supply’s report, but the work of the review team continues to have a big impact on the Welsh housing sector. Just last week, the Collaborative Centre for Housing Research along with the Wales Institute for Social and Economic Research and Data hosted an event looking at how the report’s recommendations can be taken forward. But how affordable is housing in Wales and what can be done to improve affordability?

Two weeks ago the Bevan Foundation published its October 2019 State of Wales Briefing on Affordable Housing. The briefing, available for free to Bevan Foundation supporters, looked at the affordability of owner occupation housing, private rental accommodation, and social housing for those on median incomes and for those at the lowest quartile. Shockingly we found that in 2018 the average rent for 2-bedroom accommodation – whether a general needs social rent property or a private rented property – was unaffordable in all local authority areas in Wales for the lowest paid workers. Given that social housing is traditionally viewed as the most affordable housing tenure, the fact that many families in Wales find properties within the sector unaffordable highlights the need to not only construct new affordable housing but also to increase the affordability of existing stock.

There is more than one reason behind why so many families in Wales are struggling to meet the cost of their housing. On the one hand, rents within the social housing sector increased above inflation for a number of years prior to 2019/20. On the other, stagnant wages and welfare cuts have reduced the money families have in their pockets, driving unaffordability and trapping families in poverty.

What can the housing sector do?

There is no one easy way of improving access to affordable housing for low income families. Constructing fewer new social homes may ease some of the pressures on social landlords to increase rents but, despite being unaffordable for those on the lowest incomes, social housing still remains significantly more affordable than the private rental sector in most parts of Wales. Reducing the construction of new social housing would therefore risk trapping families in even more unaffordable homes within the private rental sector.

The Independent review of affordable housing supply’s report makes a number of recommendations that could help. Some of the report’s recommendations could enable social landlords to get access to land for cheaper, for example, reducing the cost of construction. The Bevan Foundation, earlier this year called on the Welsh Government to increase the amount of social housing grant that the Welsh Government provides the sector, to ensure that cost of new social housing is redistributed more fairly across society.

There are solutions, however, that extend beyond the construction of new social housing. Already we have seen some social landlords’ experiment with Living Rent Models. Other social landlords have increased the support available to tenants who are struggling to meet the costs of their housing to reduce evictions. Whichever approach a landlord takes it is vital that they work with tenants to develop a clearer understanding of the pressures they face. Even a modest rent increase of £2 a week really can be make or break for some families trapped in poverty.

Whilst families’ incomes continue to be squeezed the cost of housing, and its affordability is likely to remain an issue for thousands across Wales. It is up to each social landlord, and the Welsh Government to do what they can to ensure that as they work towards delivering 20,000 affordable homes by 2021, the trend towards ever more unaffordable homes does not continue.

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