“Affordable rent” on average of 31.9% higher than “social rent”

Every year Swindon Borough Council’s housing department has to send in data to the government giving a picture of its council housing at the end of the financial year. The statistics for 2016/17 have been recently published. Included in the data is the average rent for different property types. Since the government introduced “affordable rent” (AR) which can be up to 80% of market rents¹ they have had to list rents for ‘social rent’ (SR), i.e. normal council rent, and AR. Swindon council decided to make their rents 80% of the Local Housing Allowance rate (housing benefit for private tenants)².

AR was introduced by the government to enable it to cut housing grant by 60%. It decided that any councils applying for ‘social housing grant’ would have to agree that new properties built with grant from the Homes & Communities Agency would charge AR. In addition they would have to agree to convert a certain number of existing council homes from ‘social rent’ to AR in order to fund new building. Homes charging AR did not begin to appear in Swindon until 2014-15 when there were only 12. There were 50 the following year and 190 last year. With each ‘regeneration’ the numbers are likely to increase. For instance at Sussex Square 33 council flats with ‘social rent’ were demolished and the new ones charged AR. The council’s programme of building 100 new homes (minus the 33 demolished) required part funding by way of converting 142 existing SR homes to AR when they became vacant.³

The latest figures for Swindon’s stock are 10,019 SR, 283 AR. Some of the AR properties have been bought with money from the Housing Revenue Account; usually ex-council properties. Read on below or download a PDF here arinswindon

As you can see from the table below the average AR rent is 31.9% higher than SR, though the more bedrooms the bigger the difference. AR is 35% higher for 2 bed properties, nearly £1,500 a year extra. For a three bed property it is more than £2,500 a year extra. Although there are only four four bedroom AR properties the rent is over £3,700 a year higher than SR.

“Affordable Rent” was a by-product of the government’s austerity agenda. It enabled them to cut grant and pass on the cost of new building to local councils and tenants who have to pay the much higher rents. Back in 2012 the House of Commons Public Accounts Committee pointed out that AR would simply pass on costs from one government department to another, since the higher rent for AR would increase the housing benefit bill.

The AR rents being charged in Swindon are sufficiently higher to make people in work struggle to pay them.

The Public Accounts Committee suggested that the higher rents might catch people in the ‘benefit trap’ “where it has become even harder to find sufficiently well paid employment to make working worthwhile, countering the Government’s objective of ensuring that the benefit system makes work pay.”

Already the number of council homes with council rents is falling towards 10,000. Charging AR is counter-productive. With working age tenants being forced off of existing benefits onto Universal Credit the waiting period will mean that if they have no savings their arrears will be higher than those paying SR.

Martin Wicks

February 11^th

SBC Rents 2016-17

Average weekly rent

Type	Social Rent	Affordable Rent	Difference £	Difference %	Annual Difference £
All 48 weeks	£87.89	£115.94	AR is + £28.05	+ 31.9%	£1,202.40
All 52 weeks	£81.13	£107.02	AR is + £25.89	+ 31.9%	£1,346.28
Bedsit	£67.00	£61.47	AR is – £5.53	– 8.25%	– £287.56
1 Bed	£73.90	£89.05	AR is + £15.15	+ 20.5%	£787.80
2 Bed	£81.28	£110.10	AR is + £28.82	+ £35.5%	£1,498.64
3 Bed	£87.45	£135.89	AR is + £48.44	+ 55.4%	£2,518.88
4 Bed	£100.07	£171.70	AR is + £71.63	+ £71.6%	£3,724.76
5 Bed	£106.44	None
6 Beds	None	£264.01

Number of properties

Type	All	Social Rent	Affordable Rent
Bedsits	280	268	12
1 Bed	3,261	3,238	23
2 Bed	2,823	2,746	77
3 Bed	3,723	3,651	72
4 Bed	182	178	4
5 Bed	6	6	0
6 Bed	2	0	2
Total	10,277	10,087	190