Government urged to boost social homes and restore LHA rates

Social housing rents are ludicrously cheap. Insufficient to cover the cost of managing and maintaining Social housing stock. Wasn’t there an article a few days ago saying the average annual Social rent is £1000 less than the average annual cost of managing and maintaining each Social home?
Why are Social rents so much lower than LHA? Low income Social tenants receive UC so the actual rent is irrelevant as UC would simply cover the difference (up to LHA). Why should higher earning Social tenants enjoy half price rent that is subsidized by people earning significantly less than they do?
If a commercially viable rent was charged Social Housing providers could buy or build far more houses and provide secure, affordable housing to far more people.
To put some numbers on this:
Social 2 bed flat £432 per month
LHA 2 bed £795 per month
Open market rent for identical 2 bed flat £900+.

Social 4 bed brand new house £760 per month
LHA 4 bed £1296 per month
Open market rent £1500+

LHA does need to be unfrozen. It’s supposed to cover the 30th percentile rent in each size category of housing and currently is way below any available property of every size in most of the country. This leaves tenants clinging onto inadequate housing where they are overcrowded because they simply won’t pass affordability referencing for suitable housing. Or they get put in temporary housing at vast cost to the tax payer.

A combination of viable Social Housing and adequate LHA are desperately needed, especially as the smaller landlords who have adopted a more affordable and human touch are selling up.
The RRA has also made us far more risk averse in our tenant selection. The loss of Section 21 means we can’t give people the chances we used to.
I’ve got some very good long term tenants who really should be Social tenants. When they first came to me one had a significant IVA, another had a small CCJ and seasonal employment, another had had periods of homelessness living in his van and very erratic income. They’ve all been great tenants for over 6 years. I don’t imagine any of them will leave until they go into a care home or die (unless they are forced out due to EPC C). Would I let to similar people in future? Absolutely not. Without Section 21 it’s too big a risk, even though I have had very positive experiences with many similar tenants over nearly 30 years.

During the 70s, 80s and 90s whilst the UK was spending its revenues from North Sea oil on benefits, Norway was using revenues from its North Sea oil to build up one of the biggest sovereign wealth funds in the world. Today, in addition to selling energy from the North Sea to the UK, because of its sovereign wealth fund Norway has been able to make massive progress in adopting renewable technologies. Norway has done some things that the UK should have done and could learn from.

Norway does have some “council housing” but the model is different to the UK. Council housing is not a universal right. It is a means‑tested service provided by municipalities to people who cannot secure housing on the private market due to financial, health, or social disadvantages. Priority groups include refugees and newcomers, people with disabilities or health needs, homeless persons, economically or socially disadvantaged households. Norway has other forms of social housing including cooperatives but in these housing organisations people pay market rent or closer to market rent.

Where I live council houses are rented out to tenants at about 1/3 of market rent. And of course if the tenant has lived in the house long enough, the tenant also gets the right to buy the house at a discount. And in addition to that, if the tenants start out being a socially-disadvantaged family, but ten years on the family has two big incomes, or conversely is separated and there’s a single person living in the house, that single person or now, non-socially disadvantaged family still has the right to stay there.

So that raises a number of questions: Firstly, is the “council house” business model really the one that is going to house the most people, or house the most families for a given amount of investment and a set standard? Or is there some other kind of housing business model such as a cooperative or mutual that might be more efficient at turning its assets over to provide safe housing?

And finally, if your government was potentially thinking about raising billions of extra money either from some dodgy, off-balance sheet arrangement, or your government was thinking about raising billions of extra tax from for example CGT or IHT, would you really expect to give all that cash to your council and get value for money? And finally, even if you thought THAT was a good idea, would you give it to a LABOUR -controlled council?

There’s a bit of hubris developing at the moment around the idea of “we’ve got to build more council houses”. You have to be wary of hubris. There was a lot of hubris about the channel tunnel…but the early investors lost their money. There was a lot of hubris about the HS2 ego project but the business case was always flawed and financially HS2 is a disaster. Is the current hubris around “…we’ve got to build more council houses” a labour-vanity-project?

Whilst I don’t live in an area run by a labour-controlled council today I have done it in the past and I wouldn’t trust a labour-controlled council with more money to build council houses. I suspect that there is some other solution to the provision of more social housing.

The only way to build as many NEW social homes as possible for the budget is to reduce the excessive new build requirements as they stand. There is zero business case/use of taxpayer money to provide accommodation that will again be further subsidised because the rent wont even cover the build cost never mind the ongoing maintenance. It makes no sense. Its even more galling when the tenant can have a change in circumstance the next day and have enough income that means they can afford to rent elsewhere and give up the property to someone else. Years on the same occupant can then apply to buy it. Something else the taxpayer subsidises….

Council homes for social rent need to meet certain standards yes, but there must be a whole change in why they are provided. A stop gap – for people to use and move on from – not a permanent abode.

The issue we have now is also compounded by existing occupants in social provision NOT moving when they should. The idea of a council house is for life has to be scrapped asap.

Why it is accepted that it a right of personal possession can be applied when someone rents, what is ultimately an asset of the state?

No need to build, plenty for sale – perhaps free up people unable to sell due to government policy over cladding. Quick to do, an easy ‘win’ for the waiting lists, not cheap but neither is that temporary emergency housing whilst you pay consultants to consider the options.

Reply to the comment left by Paul Essex at 28/07/2026 – 16:05
That isn’t the only thing that you COULD do.

Years ago I used to take social housing tenants. The reason I stopped is because the government can come back and get the money back off me if the council finds that the tenant isn’t eligible for benefits, but as the landlord I have no powers to check.

So the government could change the law recognising that landlords don’t have these powers and stop going after landlords for housing benefit that shouldn’t have been paid. And the government could change the law to require councils and the police to give landlords the information enabling them to evict tenants causing antisocial behaviour. The government just got rid of all powers that landlords have (no fault evictions). And because no-fault evictions were a quicker way to get your property back, together with the other provisions of the Labour Renters Rights Act the government just increased the difficulty of getting your property back. So the government could sort out the courts (I can’t see any evidence that it has done it yet).

Social housing has a place. But I’m not convinced that giving more money to councils to produce more council housing is the best way to deliver social housing, and especially not if it’s a labour controlled council.