Centre for Social Justice (Living Rent Project)

Funding at a glance

Programme: Nurturing Ideas to Change the Housing System
Amount: £60,000 grant
Approved: 2023
Timescale: Six–eight months
Status: Funding in progress
Phase: Decent Affordable Homes Phase Three

Affordable Rent homes are pegged to market rates – not local incomes – which, given soaring rents, makes them unaffordable for many on low incomes. As new definitions of affordable rent begin to be trialled, this project will explore local living rent models and examine how such models could inform major changes to national housing policy.

Why we are funding this project

Many from across the political spectrum agree that housing in England is in crisis. Homes are becoming increasingly unaffordable for those on low – and even often modest – incomes, and the rise in insecure and poor-quality housing is damaging residents’ health, driving up homelessness, preventing people from forming families and thriving at work, and making it difficult for people to get on with their lives.

While truly affordable housing is desperately needed – especially as traditional forms of social housing become less and less available – there’s currently no single statutory definition of affordable housing. Current affordable rent models aren’t fit for purpose, and there’s recognition that too much funding allocated to affordable housing hasn’t been channelled towards housing that’s genuinely affordable.

Strategic purpose

To develop an alternative approach to affordable housing and ultimately increase the availability of genuinely affordable homes in England.

Project description

The project will see us partner with the Centre for Social Justice – a centre-right think tank founded in 2004 – which has a history of delivering ground-breaking research and impact in housing and housing policy reform.

It will build on the current thinking on living rent policies by studying recently implemented income-linked rent models to understand how they could be used by the government and the social housing sector to develop a new definition of affordable housing.

Introduced in the 2010 Spending Review at a time of tightening public spending, the government’s current affordable rent model allows social landlords to charge up to 80% of local market rates. While the model has advantages, it places pressure on already stretched household finances – renting at even 80% of local open-market prices is impossible for many households in areas where homes are particularly expensive.

It’s true that some housing associations don’t charge the full 80% on their Affordable Rent properties, but there’s no guarantee that they’ll continue not to. As a result, while some Affordable Rent lettings are truly affordable in areas with high local rents, they’re only so by accident or short-term intention – and not by design.

Rethinking the Affordable Rent approach is widely considered a crucial step forward in improving social housing provision and increasing the availability of affordable housing in general – and restoring trust in the national affordable housing system more broadly.

The project will have two main strands. The first involves updating the existing research on living rent by accounting for recent interventions in London, Manchester, and the West Midlands, undertaking comparative policy research into the merits of different approaches to redefining affordable housing. The second involves exploring how evidence from living rent models implemented at the local level could help us develop a national model.

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