Will tomorrow mark the end of housing associations?

Selling off housing associations would rid George Osborne of £60bn worth of debt


Wednesday’s Autumn Statement could mark the beginning of the end for the country’s 1,700 housing associations. The chancellor, announcing the results of the Comprehensive Spending Review (CSR) for the next three years, may announce that housing association assets will be sold off before the General Election in 2020 to help him achieve the elimination of the structural deficit in this parliament.

This could be the largest ever sale of public assets – which housing association homes became following the Office for National Statistics reclassification of associations as public bodies – and the most radical solution the chancellor could pursue.

Otherwise, Osborne faces £60bn of housing association debt – equivalent to 3 per cent of total public debt – sitting on the national accounts, throwing his debt reduction strategy into disarray, and a blockage to his status as favourite to succeed David Cameron as prime minister in 2019.

Getting shot of this debt, possibly by reversing the ONS reclassification, will be a major CSR priority.

The backdrop to this muddle has been the decision by successive governments since 1988 to deploy the housing association sector as a means of transferring council housing and leveraging private investment into social housing without taking a hit on what used to be called the Public Sector Borrowing Requirement.

Since 2010 though, Tory-led governments have set aside this consensus, aiming to fundamentally reshape social housing into so-called ‘affordable’ housing, while targeting social tenants for welfare cuts and negative stereotyping in the media.

A year of policies aimed at housing associations and their tenants, including lowering the Benefit Cap, imposed rent reductions for the next four years, requiring better-off tenants to pay market rents or to move out, and, most controversially, the extended right to buy, have all piled pressure on social landlords and tenants alike.

In the middle of the year, attacks on the housing association sector by Channel 4 News, the Spectator and The Times, claiming house building under-performance by associations, even though such claims have largely been refuted by housing commentators, was seen by many as a ‘softening-up’ of the sector.

Hot on the heels of these attacks came the rent reduction announcements in July’s Budget followed by a housing association vote in September on whether to accept the right to buy ‘voluntarily’, which was meant to head off the ONS decision reclassification – unsuccessfully, as it turned out.

On Wednesday, more than 100 years of history could be wiped away in a stroke of the chancellor’s pen. With the exception of the endowed housing trusts, such as Peabody, Cadbury, Rowntree, Sutton and Salt, the housing association legacy stretches back to the mid-1920s as part of the ‘Homes Fit for Heroes’ campaign in the wake of the First World War. They were created to improve the slums – back-to-back housing that were homes to many working class people.

Since then, housing associations have grown to own 2.2m homes in England, with an average stock holding of about 1,800 homes. The majority are community-based, answerable to local people, tenants and councils. A few hyper-housing associations, pursuing a commercialisation agenda, have been singled out by the government for attack on the bloated salaries of some top executives.

Placeshapers is an example of a more representative group of housing associations that have focussed on physical, economic, social and environmental interventions to relieve housing stress and poverty, especially in inner city communities. The most recent audit of such housing association community investment to tackle disadvantage and boost the life chances of tenants, is calculated at more than £1.7bn annually. All of this is now at risk from the CSR.

A future without community-based housing associations such as these – successful examples of the state, the private sector and local people working together in the ‘Big Society’ – remember that? – is a real possibility after the chancellor sits down on Wednesday.

Selling-off housing association assets as part of a short-term reduction strategy, will throw away a century of association achievements in supporting the most vulnerable members of society in the name of a discredited, neo-liberal economic ideology.

Kevin Gulliver is a contributing editor to Left Foot Forward and a director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity

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23 Responses to “Will tomorrow mark the end of housing associations?”

  1. Wobbly chops

    It would be fantastic if tennents could buy their homes .

  2. Joe Halewood HSM


    The £60bn of debt onto the PSBR also comes with £500bn worth of assets – the housing and the land they are on – and it is imbalanced to focus on just one side of the equation. Yet I have been strongly advocating that privatisation is the end game and believe it will happen.

    On a practical basis I disagree with your notion that HAs will become a privatisation fire sale before 2020…I strongly suspect it will happen between 2020 and 2025 which gives time for the massive merger frenzy needed to make such a fire sale so much easier and of course fatten up the HA calf before the fire sale.

    Everyone sees no chance of anything but a Tory majority in 2020 so the next parliament for me is far more likely – the fire sale is the ace in the pack – though it can be used ahead of 2020 if for example the Tories implode over EU Referendum.

    The Tory home ownership only focus (and apparently it cures cancer and secures world peace too!) means that the fire sale of HAs will happen and most likely when the voluntary RTB falls apart, which it will, and Osborne on his white charger puts in on a statutory footing after blaming HAs for trying to prevent it by their absurd Orr-inspired notion that they can have discretion over what is a “right!”

    I also don’t accept that tomorrow will see Osborne release details of the HA £60bn PSBR hit / £500bn asset value increase issue, or at least anything substantial on that outside of vague political posturing of the “we promised you the right to buy we have struck a deal” variety.

    Of course I hope we are both wrong yet I doubt it. The HA fire sale is a political gift horse comparable to North Sea Oil (though not of that level obviously) and simply too good to miss for the Conservatives home ownership is universal panacea ideology and £60bn debt to £500bn asset value is a good deal at any time for the markets and especially with house price inflation running at 5% and more each year. For me it is only deluded hope of housing professionals that sees the fire sale not happening at some very near time, yet for the reasons above for me it is a next parliament issue not this one

  3. Woo11

    Yeah cos that’s worked really well in the council housing sector!!!!! You have heard of social cleansing in London I presume? Research it!

  4. Woo11

    I’m guessing that this article will not get that many responses, Housing Association Tenants not being the most vocal of people. And I doubt that the people who normally chatter away on this site will be bothered, am I being cynical? I dont know. This though is a tragedy, I have seen the effects of right to buy on social housing in London, how the flats that have been bought by tenants are so often now in the hands of property companies who rent them out at extortionate rents, that Councils have given away or sold whole estates under the guise of the dreaded “Regeneration”, regeneration by property developers that is, who then deny the faintest chance of fair rents to people who have lived there in a stable community for many years. If anyone here has been following the reality of what RtB 1 has meant in London then they know very well what RtB 2 will result in – in 5 years or 10. A housing association tenant since the early 80s, I hope I’m dead by then.

  5. keithunder

    Learn how to spell or say something sensible!

  6. Levinas

    Im disallowed from even considering purchase of my H.A. home due to living in a rural area, in a community of under 2000 people. Supposedly to preserve housing for rental in a limited rental market, although i suspect to see any high value homes held by local council on my tudar era homes heavy high street, sold off to finance the purchase of homes through a scheme i’m im refused access to. I suggest similar should in place for high density areas with limited rental market such as London.

  7. Levinas

    ‘£500bn worth of assets’, all bought and paid for by the housing association when they took over. It was at cut price, but they certainly paid for them, so how can government now take back what has been paid for and monies accepted by the council selling the homes on?

  8. Woo11

    I dont understand this obsession with home ownership.except as a way of making vast sums of money either for you personally or your descendants. Houses should simply answer the need for homes, permanent, secure, and of reasonable standard. It is completely wrong that so many are homeless, inc hidden homeless in temp accomodation, which is the flip side to the housing price bubble

  9. Harold

    Getting scary now, they are going to really hammer the lowest 90%. With people not registering to vote, boundary changes and so on, I am starting to think its all over. Remember when people use to joke about stopping voting if it changed anything, I think it is about to happen.

  10. Ewa

    That will be great when I will be to by my flat. I think that is what it need to be done I work hard (no benefit) and I can not wait.

  11. Gemma Stockdale

    I still find it incredulous that the Government are so desperate to pass off the responsibility of property through RTB and RTBe to tenants who are among the lowest income brackets AT ALL, let alone selling off HA properties for them as well. In theory, some self-funding HA tenants may well be able to afford to pay a mortgage when it comes in at almost 30% below market rate, but will they also be able to bear the cost of all the extras that come with it? Buildings insurance, life insurance, repairs… I’d love to know the average cost of annual repairs to a HA or LA property. I doubt it’s cheap.

  12. Robert Jones

    It’s blatant theft. It will have a disastrous impact on the poorer HA tenants (which is most of them) and if some of our Labour MPs were of the slightest use they would be exposing this now rather than persisting in niggling away at the leader they didn’t want, but whom the party elected.

  13. Woo11

    going to sell it on are you? or make money by the housing shortage/housing bubble? then move out to some area where housing is cheap and prospects low….good luck, and remember you will have helped deny another person after you a home. You want to own – go out to the private market!

  14. sean connor

    We have a good indication of what will happen to the future of Housing Associations by looking at what happened to Municipal Housing because of Thatcher’s right to buy policies. To put it simply, there is no future for Housing associations. The Tories hate the idea of any built by the Municipalities, or the idea of Social Housing.

  15. david munnik

    Well here is a response from a very ANGRY Housing association tenant,I and many others are very active in trying to hold our housing association to account, as well as our local council, But as my local council is Tory and have no interest in social housing we continue to bang our heads against a brick wall, being retired myself (im alright jack) but i worry about the future generations, everybody should be entitled to a decent secure home but for those on low wages it now looks very bleak, Thats why this goverment must go,but untill then i urge all tenants to get together as we have done and
    form a tenants/ residents association and make your voices heard.

  16. Woo11

    Its really great to here your fighting spirit david munnick! I agree with what you say about it all looking very bleak, and even more so for future generations. Which is your HA may I ask? I do try to hold my HA to account, but have not joined the recently set up Tenants assoc. But maybe I will give it a try. What are you banging your head against a brick wall about? Any tips about Tenants associations?

  17. Woo11

    I wonder how we might be able to set up something online so that we can share experience? I have seen from all the people being pushed out of council housing in London, that action groups attempting for instance try to stop sell off, or get the council to acknowledge responsibility to rehouse them, have been local affairs and so many have either lost their homes, or been moved far away. I feel there needs to be a coming together of HA tenants across the country to discuss points of interest. No idea how to go about this however!

  18. Woo11

    I imagine that all those extra costs is a contributing factor to so many new owners selling on. In my HA which has properties all over SW London, those that have been bought in the best areas are, we are told by the HA, now in the hands of companies renting at extortionate rents on short lets, or, have them empty!

    The additional issue with that is that suddenly a settled house with HA tenants in rented flats – a stable population, becomes a place where relatively wealthy young professionals with jobs that can support such rents come and go at 6 month intervals, and have no real connection with a community, the members of whom when they were HA Tenants take much more care of the property, and often of each other.

  19. Woo11

    ‘Everyone sees no chance of anything but a Tory majority in 2020’, not how I’m looking at it, please don’t talk it up like that, you are a gift to the torys if you do. I still believe in a type of democracy, and the energy it has created. So sod the polls and sod the media I am not going to be afraid for the next 5 years. Apart from that I agree with what you say!

  20. Mark Frankel

    “The Government has said that the properties sold under the voluntary
    scheme will be replaced on a one-for one basis; however, this has raised
    questions around how replacement will be financed; the timing of
    replacement (there will always be a time-lag); and where the
    replacements will be built.” This comes from a Parliamentary research briefing and gives grounds for serious concern.

  21. david munnik

    woo11 if you have a tenants assoc i urge you to join,don’t worry if you think you lack experience, every one has to start somewhere, i don’t know who your HA is but they should be able to advice and support you as ours have done, Good luck.

  22. david munnik

    Well said woo11

  23. Woo11

    Will they be replaced by fair rented homes? or the joke of so called “affordable” housing?

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