It is well-known that there is a massive shortage of affordable housing stock in the UK. With a growing and ageing population, not enough new homes are being built and competition for accommodation of all kinds is intense.

This is certainly true of private residential properties, but with the cost of living set to spiral upwards over the coming months – due to a variety of economic and social factors – then demand for social housing looks likely to increase too, putting more pressure on segments of the population already under significant economic strain.

Demand exceeding supply in social housing

The need for social housing is an ongoing challenge for councils, housing associations, and central government. The provision of these properties is a tightrope walk of managing budgets and expectations. A recent report by Home Connections last October examined the challenges facing people who are seeking accommodation in the social housing sector across the UK, as a whole. The report identified that there was especially increased demand for social housing in London – the average number of bids per property in the capital increased by 9% during the pandemic, and some one-bedroom flats in Lambeth received as many as 1,040 applications.

This is a stark indication of how demand far exceeds supply. It raises many questions as to who should have priority in these circumstances.

Should access to housing be limited to local people, or to people who need to work in proximity to the area, or the most deserving and those in the worse current living conditions?

It also makes broader goals, around place-shaping and ‘levelling up’ much more complex. The Government provides clear guidelines to local authorities, which must develop housing allocation schemes which give ‘reasonable preference’ to certain categories of applicant, as detailed in Part 6 of the Housing Act 1996. Aside from this, they have a good deal of discretion over how to allocate housing stock. Within the statutory guidance is the concept of ‘local connection and residency requirements’.

Residency requirements for social housing

The current thinking strongly encourages authorities to adopt a residency requirement for applications: ‘The Secretary of State believes that a reasonable period of residency would be at least two years,’ while some local authorities insist on longer periods. This has resulted in the Government acting to ensure certain applicants – such as former armed forces personnel, those seeking to move for work, and those escaping from violence or threats of violence in the home – are not discriminated against by strict residency requirements. Even with these safeguards in place, some successful legal challenges have been taken against allocation schemes, where the residence test and other requirements have impacted on the local authority’s duty to give certain applicants – people who are homeless or living in overcrowded or insanitary accommodation – ‘reasonable preference’ to secure a housing allocation.

C.Co has significant experience in assisting organisations to develop sound risk-based frameworks based on technical knowledge and wide range of experience. C.Co can support those responsible for social housing provision to determine appropriate risk-based allocation frameworks and systems, which enable the provider to be confident that the process is robust and to provide evidence and assurance. C.Co can also help review processes and systems to improve efficiency and allow for greater development of new homes.

Adapting to new challenges

In addition to the greater pressure on social housing supply, there are also changes in the nature of the demand for social housing, arising from the Covid-19 epidemic, which is a reflection of many people’s changing economic and working circumstances. For example, many people may have lost their jobs, and as a result have become unemployed and homeless. Business owners and entrepreneurs may have seen their custom evaporate, government grants may not have been enough to save them, and the residual damage could have impacted their mortgages and savings. As a result of these additional issues, demand for social housing has surged. There is evidence of increased demand for bedsits and one-bedroom properties since the pandemic – demonstrating that more households without children or who were single were looking for social housing during the pandemic.

Last October, it was noted that more than one in 10 households remain on council waiting lists for more than five years, with urgency prioritised. As the squeeze continues, everyday living costs are rising fast and further eating into incomes, with everything from fuel prices to groceries being impacted. Until the shortfall is addressed with some broad-based initiatives – such as the conversion of vacant offices into city centre living accommodation – then providers will still be tested in these challenging times.

Here at C.Co, our social housing experts can help providers define and find solutions that will enable them to rise to this enormous challenge. Contact us to find out how we can work with you on strategy development, options appraisals, efficiency programmes and more.