All of the largest – and even more so, the smallest – housing associations are saying that the cross-subsidy model of building homes for sale to fund ”affordable” housing is broken.
Never mind that homes rented at 80 per cent of market rent in London is not affordable. Never mind that such schemes cannot manage to pay for homes for truly affordable social rents – what used to be council homes.
It doesn’t work because the collapse of the housing market precludes any profit to subsidise ”affordable” homes.
If the biggest housing associations in the country, with the economy of scale through tens of thousands of homes, can’t make it work, what hope for Croydon and their house-builder, Brick by Brick?
A few weeks ago, Inside Housing discovered that for working families on Universal Credit, the level of housing benefit, which was fixed some years ago and has not increased in line with rents, together with the benefit cap and the bedroom tax, limited the number of privately rented two-bed homes with a rent affordable to those families to… how many?
Have a guess: it is just 39 homes in the whole of London.
The only alternative for those families is to pay much more than they receive in housing benefit, or to crowd themselves into tiny one-bed flats.
Housing in the UK is completely disfunctional, broken by Thatcher turning it from a basic social need that everyone has, into a sink for capital investment and savings totally divorced from that need.
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