Government spin on so-called “rich” social housing tenants exposed

Contradictory government messages claim social housing is a repository for the workless while also seeking to rid social housing of tenants with higher incomes

Grant Shapps MP

Kevin Gulliver is the director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research; he is writing in a personal capacity

The government’s housing policy has reached new depths of confusion over the last few days as the media reported that ‘rich’ social tenants could lose their homes altogether or have to pay higher rents more in keeping with their ability to pay.

Contradictory government messages centre upon the claim that social housing is a repository for the workless and benefit dependent, while seeking to rid social housing of tenants with higher incomes or charging higher rents which stifle aspiration.

Housing minister Grant Shapps has taken the lead from Westminster Council, which claims there are 2,200 social housing tenants, including both council and housing association tenants, with annual incomes over £50,000 within its boundaries.

According to calculations apparently undertaken by Whitehall officials for the Communities Department, there are up to 6,000 tenants in social housing with incomes greater than £100,000.

The problem with these analyses is the poor understanding of the difference between earnings of a household head in terms of salary, which is being used in most of the media coverage of the issue, and total income of all of those living in a tenant household. Total income, including earnings, benefits and tax credits of all household members, when compared to median earnings for an individual, for example, is bound to infer that there are large numbers of ‘rich’ tenants.

So, for example, a household in London where three members earn a London Living Wage of £8.30 an hour – calculated to be the bare minimum needed to stay clear of poverty, if all relevant benefits are being claimed – would be pushed into the £50,000+ per year category.

Official surveys carried out by social housing regulators, such as the Tenant Services Authority, do not provide income bands above £30,000 so it is not possible anyway to assess how many tenant households have incomes of £50,000 or £100,000 at national level; it is assumed that Westminster Council used its own localised survey. Yet this is likely to be far from typical of the sector.

Independent analysis carried out by the Human City Institute using national survey data shows that there are only 6 per cent of tenant households with gross annual incomes above £30,000. One third of these live in the south-east. Two fifths have four or more household members and one fifth have five or more. More than four fifths are households where the head works. So the relatively small number of better off tenants tend to be working, more likely to live in the south east and to be households at least double the average size, which is a key factor in the level of their combined income.

Even if there are a small number of better off tenants who can satisfy their housing requirements through private renting or home ownership, this does not mean that all members of the household will wish or be able to do; nor indeed that all of their income will be taken into account to determine borrowing capacity or credit worthiness.

But all of this misses the central social housing problem; there isn’t enough of it, shown by the 1.7 million households on waiting lists.

The cuts in the social housebuilding by the chancellor and redirection of social landlords to provide homes with rents closer to market levels are unlikely to reverse the long-term decline in the number of social homes now that they are needed more than ever by ‘generation rent’.

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