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Social rents policy: choices and tradeoffs

Stuart Adam, Daniel Chandler, Andrew Hood and Robert Joyce
Report

Reductions in social rents announced in the July Budget will be of little or no direct benefit to most of the 3.9 million households in England living in social housing. Most of those renting their home from councils or housing associations have low incomes and hence receive housing benefit to cover all or part of their rent. Entitlement to housing benefit will typically be reduced pound-for-pound as their rent falls.                                        

The reduction in housing benefit will save the exchequer money, and will strengthen tenants’ work incentives as they have less means-tested support to lose by entering work or increasing their earnings. Social landlords – housing associations and local authorities – will lose money. These are among the conclusions of this report on social rent policy.

Social housing providers – local authorities and housing associations – fulfil at least three functions: building housing, acting as landlord and delivering subsidised rent levels. This report focuses on the last of these. Specifically, we analyse the consequences for tenants, social housing providers and the exchequer of changing the level of rent charged to tenants in social housing. We do not take a view as to what level is appropriate, or look at wider policy issues in the social housing system.