Will private landlords replace local authorities as the main housing provider?

property short falls
Aug 23 2016

Will private landlords replace local authorities as the main housing provider?

It seems Housing benefit payments to private landlords have doubled in a decade as more social tenant are looking to the private sector to provide homes.
It has come to light that new levels of taxpayers’ money are being paid to private landlords, new figures show, with the bill for accommodating social tenants in the private rental sector having doubled in a decade. In isolation this sounds shocking but how many new houses have been built by local authorities and housing associations to deal with the demand?
Recent analysis by the National Housing Federation shows that the budget for placing social tenants in private rental accommodation has increased from £4.6bn in 2006, to £9.3bn last year.
Should this figure raise concerns about government policy of shifting housing benefit recipients into the private sector? Is it the most cost effective method for social housing?
We have seen cases where tenants in London who live in bedsit properties are having housing benefit cover their rent with an average rent of £983 per month, which was paid directly to the landlord.
Although it does seem a lot to be paid in housing benefit consider all the services the local authority would have to employ to maintain that property.
Would it be better for local authorities/government to set the standard of accommodation a landlord would have to provide to receive housing benefit payments?
It does seem that Councils are looking to the private sector to solve their housing problems, is this a short term view or a long term saving as their current housing stock is aging?
With more and more landlords converting houses to HMO are they driving up rents and are they taking away valuable housing stock on streets where people might otherwise buy their first home if they could. However, if there was no demand for HMO then they would not be taking advantage of this situation.
Are councils selling off more houses than they are building thus the need to rely on the private sector?
This then creates an incentive for private companies to maximise profit by squeezing as many small units as possible into small houses.

Research claims to show that housing social tenants in privately rented accommodation costs more, amounting to an estimated £1,000 more per family per year than if they were placed in council or housing association homes. However, the breakdown of the £1,000 was not clear and seemed not to take into account the wider picture of council costs such as employees required to service that social tenant.
Of course it’s more expensive to house people in the private rental sector than the social rented sector, social rented properties are often subsidised or gifted by property developers to ensure the development takes place. Whereas the majority of private rental properties are bought on the open market.
The Government have said that whilst the cost for private landlords accommodating social tenants had increased between 2006 and 2012, it has since gone down.
Should the government be building more social housing or legislate to ensure a minimum standard of private housing is provided for social tenants?

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