Those on modest incomes will be driven out of their homes

Published: 11 November, 2010

IN his Comprehensive Spending Review statement, George Osborne announced the ConDem’s plans to end security of tenure for social tenants. 

New tenants will be offered tenancies at intermediate rents which will be 80 per cent of market rents. 

Osborne was short on detail. A new form of tenure is to “reflect individual needs and changing circumstances” for future tenants. 

Grant Shapps, the housing minister, has suggested that the new tenancies might last for 10 years. It is unclear whether tenants will be forced to leave at the end of that period if they have secured better paid employment.

In 1988 Margaret Thatcher abolished Rent Act protection for new private tenancies. 

We now have assured shorthold tenancies at market rents. 

The shortage of housing has enabled private landlords to ratchet up rents, driving up the cost of housing benefits.  

Rather than reintroduce rent control, the ConDems will cap housing benefit payments from next April forcing hundreds of tenants out of their homes in Camden and other high-rent areas of London. 

The Conservatives’ U-turn on their manifesto promise to “respect” the tenures and rents of both current and future social tenants, is finance driven. 

Osborne has cut the budget for new homes from £8.4billion to £4.5billion. 

In the future there will be no direct government grant for new social housing. 

Housing associations will rather have to borrow from the private money markets, financed by higher rents. 

Osborne announced a target of 150,000 new social homes to rent by March 2015. The National Housing Federation estimate that in order to finance these housing associations will have to charge all these new tenants the higher rents, together with one in four tenants who move into their existing stock of social housing. The overall effect will be 307,000 less tenants paying social rents.

Since 1999 the stock of local authority housing in England has fallen by 3.2 million, through right to buy and stock transfers to housing associations. 

Camden is one of a minority of authorities which remains the main supplier of social housing. The ConDem government will starve Camden of new money for either new council housing or to upgrade its existing stock to the Decent Homes standard. 

Any new social housing will be built by housing associations. It is probable that the government will force up council rents in line with those to be charged by housing associations.

In June, Shapps announced his intention to abolish the Tenants Services Authority. 

The Treasury have insisted that that some regulatory function be retained in order to reassure the financial markets. 

A new regulatory committee is now to be established at the Homes and Communities Agency. However, the focus will shift from tenant empowerment to financial regulation. 

This policy shows the extent to which the current cuts are driven by ideology, the agenda being set by Policy Exchange, a right-wing think tank. 

It will be the first time since 1945 that there will be no government funding for new social homes. Those on modest incomes will be driven out of Camden.

The news for the 16,000 on Camden’s waiting list is bleak. Even if the ConDems reach their target of 150,000 new homes by March 2015, there will still be 307,000 less homes at social rents. The government’s approach is rather to deal with the demand side by persuading applicants that social housing is no longer a commodity which is either desirable or worth joining the queue.

It is ironic that the bankers, who caused the current financial crisis, will the main beneficiaries of the new approach to social housing.

• Robert Latham is a barrister at Doughty Street Chambers