The key takeaways from our affordable social rent seminar

On 2^nd of April, we welcomed around 60 people from across the housing sector to a seminar with Shelter Cymru to discuss the growing problem of unaffordable social rent.

Following an introduction by our director, Dr Victoria Winckler and John Puzey, director of Shelter Cymru, Ian Wilson provided an analysis of what is meant by the term affordability.

Drawing on a number of studies he has been involved with in his role as academic at Sheffield Hallam University, Ian argued that affordability depends on three key issues: tenants’ income, their housing costs and their non-housing costs. Changes to any one of these can lead to a household’s rent becoming unaffordable. He explained that this can push families into poverty and lead to an increase in rent arrears, impacting landlords too.

Currently, there are two main ways of measuring affordability, neither of which appear to be solving the problem. Ian cited Universal Credit and rising rent levels as the main factors to blame, saying:

“There is a need for all people working in the housing sector to look for solutions given that rent unaffordability has such a significant impact on people’s health, their wellbeing and life chances.”

He concluded by saying that we must address the root causes of the problem by placing more of a focus on affordability when rent setting, promoting the real living wage, improving the welfare system, increasing direct funding of house building, and supporting access to good employment.

In the ensuing discussion, one delegate recognised that without access to social housing, people can not begin the journey to improve their financial position and move out of poverty. Another flagged the need to look at broader household costs including energy prices, and in particular, service charges.

The second session of the morning saw Ashella Lewis and Jennie Bibbings of Shelter Cymru set out some of the personal experiences of people who, confronted with unaffordable rents, called Shelter Cymru’s advice line. Propelled to investigate a sudden surge in enquiries relating to rent increases in 2018, Shelter Cymru discovered that many tenants fear going to rent assessment committees – the risk of their rent being increased deterring many callers. Concerns were also raised over the Welsh Government’s maximum rent matrix and the accuracy of data, and the fact that private rents were found to be more affordable than social rents in some parts of Wales. On a positive note, Ashella noted calls to the advice line had diminished this year.

Following Ashella, Jennie Bibbings set out how unaffordable rents and historic rent arrears are locking out many homeless people from the social rented sector. She explained that it is common for people to be refused a social home if they have historical rent arrears and said the current system is not flexible enough:

“There are a number of unreasonable practices within the social housing sector at present; not only are people being excluded from the sector as a result of arrears that been accrued more than seven years earlier, people are also being excluded for arrears that had been accrued when they were very young or vulnerable.”

Jennie argued that there was a clear need for the social housing sector in Wales to develop a more person-centred approach to dealing with issues around unaffordability and rent arrears, pointing to positive examples of where this has been achieved outside of Wales.

The third session gave delegates a chance to hear about some alternative models of rent setting from Merthyr Valleys Homes and Trivallis.

First to speak was Lorraine Oates of Merthyr Valleys Homes who introduced the Living Rent model in April 2018 with the aim of providing tenants with a more stable foundation. Following years of above-inflation rent increases and welfare cuts and reforms, rent affordability has become a big issue for Merthyr Valleys Homes with their revenue taking a hit.

By analysing ASHE data, Merthyr Valleys Homes have been able to set their rent at a level that is higher than the Welsh Government rent mid-point whilst also staying within the Joseph Rowntree Foundations’ recommended 28% affordability cap, improving their own financial position in the process.

Dan Hayes and David Jones then talked about Trivallis’ recent introduction of Living Rent. Through consultations with their tenants, Trivallis found that the majority thought it would be fair to base rent on what was affordable for those on lower incomes in a given area. However, there were a few problems with this approach, so Trivallis used the OECD equivalence model to set rent by property type as well.

Some participants raised concerns over whether the geographic approach could drive inequality, something Trivallis say they will be keeping under close review. A further question raised of both schemes was whether, in future, they should look at people’s actual’s incomes as this could differ from ASHE data. Both landlords agreed that this was something that they would like to refine as they developed their models. A number of delegates indicated that Living Rent was an approach their organisations were considering introducing.

The day concluded with a panel discussion on what was next for social rent in Wales.  Three panellists shared their views: David Wilton from TPAS Cymru, Clarissa Corbisiero-Peters of Community Housing Cymru, and Tamsin Stirling a freelance housing expert and Bevan Foundation trustee.

David Wilton stated that the housing sector in Wales is at a critical point, and whilst new approaches of tackling the issues is essential, tenants should be involved in all aspects. He also noted how important it is to look at value money in the round, not just rent.

Clarissa Corbisiero-Peters felt that the conference was well timed with the sector eagerly looking forward to the publication of the Affordable Housing Review, and agreed there was room for more transparency and accountability within the system, such as the publication of rent levels.

Tamsin Stirling raised concerns about the equality impact of unaffordable social rent, focusing on some of the challenges faced particularly by young people. She shared some suggestions on what could be done to reduce such discrimination, such as building homes with a higher grant rate for young people, stating:

“If we continue to base policy on averages, we risk building disadvantages in to our social housing system.”

The discussion was then opened to the floor with delegates making valuable contributions regarding issues from housing benefits and grant funding to service charges and sustainability.

Following the seminar, we believe there are some key principles that should form the basis of any future approach to social housing rents:

1. It is imperative that social housing rents are affordable to all current and prospective tenants no matter what their economic position.
2. Everyone in Wales who needs access to social housing should be given a fair opportunity. The fact that people are being refused access to social housing in Wales due to debts incurred more than seven years earlier, or as a result of rent arrears accrued through the private rental sector demonstrates this is not currently the case.
3. It is important that the cost of social housing is considered in the round. As was noted by a number of delegates, high service charge costs or energy bills can have as significant an impact on the affordability of a home as rent prices.
4. It is essential that rent affordability lies at the heart of all policy decisions made in relation to social housing in Wales; continuing to increase social rents above inflation is not an option. There may be practical policy implications from this, but whatever the answer, it is vital that local authorities, housing associations and the Welsh Government take note.

We would like to thank everybody who attended and contributed to the event, particularly our co-host Shelter Cymru and our speakers.

Download the full write-up of Where next for social rent here