Housing minister Alok Sharma has said that a return to an inflation-linked rent settlement from 2020 will make a “huge difference” to the number of homes being built while also helping to address homelessness.
Mr Sharma set out the views today (27 November 2017) while describing last week’s Autumn Budget as having “housing at its heart”.
The minister told the Savills annual housing seminar in London that he wants to put ‘fairness’ back into the housing market, offering people security and affordability, whether they rent or buy a home.
When pressed on questions of affordability, he returned to the idea that the country “just needs to build more homes”.
Mr Sharma spoke about the October announcement of a return to rents linked to the consumer price index (CPI) plus 1 per cent, particularly in relation to his conversations with sector representatives and the National Housing Federation in particular.
He said: “I think this is one of those announcements we have not talked enough about, I don’t think the press has made enough of it.
"The reality is I think this is going to make a huge difference in terms of bringing forward the building of homes in the social sector and making sure we deliver more – and that’s not me saying it, that’s what I hear from the housing association sector.”
Asked by chair Mark Easton what the government will do “right now” about reports of 120,000 homeless children in the country, Mr Sharma said there is already money available to local councils while the Homelessness Reduction Act will also come into play.
He stressed that “we just need to build more homes”, and drew on an extra £2bn of grant funding for social housing announced at the Conservative Party conference in October.
Mr Sharma also drew on the rent regime again, adding that “we shouldn’t underestimate the impact rent certainty will have for housing associations and local councils” and citing the National Housing Federation saying the rent policy will make a ‘real difference’.
The minister said the feedback he was given by the sector is that tenants were more likely to notice the cumulative impact the rent cut had on expenditure and service delivery overall, as opposed to the small decrease to their own rents.
The minister is now half way through a national ’roadshow’ that will see him meet around 1,000 social housing tenants. The engagement follows the Grenfell Tower fire, which took place on Mr Sharma’s second day as housing minister.
He said one “force for good” that could possibly come from the tragedy are the questions it has raised about housing and social housing in particular.
Tenants’ views are set to feed back into the social housing green paper being published in spring, he said.
Tony Stacey, chief executive of South Yorkshire HA, asked what the minister will do for people around rent affordability and Universal Credit, citing an article in Inside Housing by TPAS chief executive Jenny Osborne that reported welfare reform as a bigger issue for tenants than fire safety.
Mr Sharma said: “My feeling having talked to a lot of people – people have not said to me that they think Universal Credit as a policy is not the right one.
“The issue has been around how quickly you get access to Universal Credit and the changes announced [at Budget] will mean people will get funding access much earlier.”
Matthew Bailes, chief executive of Paradigm, asked who the minister believes social housing is for – the most vulnerable in society or wider cross-section of the population
Mr Sharma added: “It’s been people from all walks of life who happen to be in social housing.”
He said "it goes back to the point about how social housing is perceived” adding that there is a stigma attached to social housing, in part driven by press and media portrayals.
Mr Sharma said: “I absolutely agree we need to change the issue of stigma but ultimately we need to be making sure we’re building more homes and they have to be cross tenure.”