MORE than one in ten ‘affordable’ new homes planned by housing associations can no longer be built due to the costs of making buildings safe following the Grenfell Tower fire – and it is ‘social rent’ homes that are the ones taking the hit.
This is because building safety costs mean that one in 10 affordable homes cannot be built, surveys by #UKhousing has found.
And a survey of 106 housing associations by the National Housing Federation (NHF) has now revealed that 61 landlords have discovered dangerous materials on their blocks or buildings since the Grenfell tragedy.
The government has allocated £5bn of funding to cover the costs of remediation work for leaseholders and shared owners to remove dangerous cladding from high-rise buildings, but no funding was made available for blocks where social tenants live or for works needed beyond cladding.
Unless funding is made available, the housing associations surveyed said they will have to cut plans for 12,900 out of 116,777 new affordable homes over the next five years to prioritise spending on building safety.
They said that social rent homes will be the worst affected because they build the majority of that tenure with their own income, rather than with government grants. The research also found that mounting building safety costs are affecting housing associations’ ability to invest in the upkeep of the homes they already own.
Those surveyed said they are having to divert £730m away from routine maintenance work, such as upgrading bathrooms or kitchens, to pay for essential building safety work. In October last year, a survey of the country’s largest housing associations by Inside Housing found that they were estimated (to be having) to spend £1.2bn on fire safety in the next five years.
Earlier this year, the G15 group of London’s biggest landlords said it expected the bill for its members to hit £3.6bn by 2036. Housing associations estimate they will have to spend £10bn- plus to make all their buildings safe in the next decade.
The NHF is calling on government to fund the upfront costs of all fire safety works on behalf of social housing residents/leaseholders and claim it from ‘those responsible – such as private developers and manufacturers’.
Kate Henderson, chief executive of the NHF, said the research showed the building safety costs ‘will be borne by the poorest people in our society for many years to come’. She added: ‘Not-for-profit housing associations are putting their residents’ safety first, but without funding they are left with no choice but to divert money away from building new social housing for those most in need.
‘It is simply not right that people who are at no fault and on the lowest incomes in this country are left to shoulder these costs. Those responsible for this crisis, developers of unsafe homes and manufacturers of dangerous materials, must be made to pay. In the meantime we urge the government to do the right thing and fully fund upfront costs of making buildings safe.’
Meanwhile, more than 150,000 households are currently being housed in the exempt accommodation sector, which a leading homelessness charity has branded ‘controversial’ and ‘dangerously under-regulated’.
Exempt accommodation is used to house people with support needs, such as people who have recently left prison, fled domestic abuse or been homeless. This type of housing is ‘exempt’ from the usual caps on Local Housing Allowance, meaning providers can charge higher rents that are covered 100% by government through housing benefit.
In order to charge higher rents, providers must provide a loosely defined level of support, however Crisis has said a ‘lack of meaningful oversight and regulation’ of the sector means many providers are ‘abusing the system for financial gain’.
Freedom of Information (FOI) data obtained by Crisis has revealed that 153,701 households in Britain are being housed by the exempt accommodation sector, which has now come under increased scrutiny from the English regulator. That number is 62% higher than the 95,149 people living in exempt accommodation in 2016, data obtained from the Department for Work and Pensions found.
And yet councils could save £572m a year if social rent homes were available for all homeless households, studies have found. The exempt accommodation sector has come under increased scrutiny over the past year, with the Regulator of Social Housing finding an increasing number of providers to be non-compliant.
One of these providers is Prospect Housing, which is being closed down after a new management team found it was unable to provide the level of support expected while still remaining financially viable. Today, Prospect and Crisis are releasing research on the exempt accommodation sector to coincide with a meeting of the All-Party Parliamentary Group on Ending Homelessness on the matter.
FOI (Freedom of Information) data obtained from local authorities by Prospect led it to estimate that £816m has been spent on exempt accommodation in the past financial year alone. This figure is based on the responses received combined with what it calls a ‘conservative estimate’ for councils that were unable to provide figures.
Spend on ‘exempt accommodation’, however, has risen by over £100m between 2018/19 and 2020/21 said Prospect, based on FOI responses from 52 councils. Both Prospect and Crisis are calling for increasing regulation of the exempt accommodation sector to ensure providers give tenants an adequate level of support.
Jon Sparkes, chief executive of Crisis, said: ‘The exempt accommodation sector is dangerously under-regulated. There are some good providers, but so many others are motivated only by money and are able to charge higher rents for essential support they have no intention of providing.
‘It is unacceptable that the system lets them get away with it. People trying to end their homelessness, fleeing domestic abuse or tackling complex addiction issues are being forced from one trauma to another – all at huge expense to the public purse.’
Vicky McDermott, chief executive of Prospect, said that most organisations providing supported housing are ‘dedicated and diligent’, particularly those which are commissioned by local authorities. She hopes Prospect’s research will help others learn from ‘the mistake and experiences’ of the organisation in order to help them ‘safeguard the well-being of those vulnerable residents that find themselves in exempt accommodation’.
A Department for Levelling Up, Housing and Communities spokesperson said: ‘It is completely unacceptable for any landlord to abuse the exempt accommodation system and we will not stand for it. Supported housing must be of good quality and provide the right support for residents. That is why we recently ran pilots in five areas, backed by £5.4m, to crack down on rogue landlords, including increasing inspections and enforcement of accommodation standards.
‘We are urgently reviewing the findings from these pilots to work out what further action is needed.’
