[Originally posted on The Policy Press blog, 24/07/15, under a different title. Reposted here under the original title.]
One unexpected aspect of this package was the proposal to cut housing association rents by 1% each year for the next four years.
This proposal was justified with reference to social housing rent rises over the last few years. These have pushed up the already substantial housing benefit bill. Households have needed greater state assistance in order to afford the rents being set. Bearing down on rents over the next few years will, it is claimed, both reduce the housing benefit bill and force social landlords to deliver efficiency gains.
To the unwary or unfamiliar this argument could appear entirely plausible. It is surely time to try to rein in this sort of behaviour: landlords extracting income at the taxpayers’ expense.
Yet, it is important to understand how we have arrived at the current situation and what the consequences of this policy change are likely to be. [Read more…]