Myth 2: Social tenants are subsidised by the taxpayer

Busted? The phrase ‘state subsidised’ is a common description for social housing. The government partly funds social landlords in developing sub-market rent homes through the Affordable Homes Programme. But it’s not much funding, especially since George Osborne slashed the social housing budget by more than 50% to £4.4bn in 2010. Many social landlords are far more reliant on the markets than capital subsidy to build their homes. Housing association L&Q has plans to build 50,000 homes over the next ten years without any grant at all.

When tenants live in low-rent properties it means that the government has to shell out less on housing benefit – so in the long run, so perhaps perhaps building affordable housing is investment, not subsidy.

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One thought on “Myth 2: Social tenants are subsidised by the taxpayer

  1. Housing “subsidy” is £4.5bn over 4 years or just over £1.1 billion per year. Myth 1 is very ambiguous and could easily read as £4.4.bn per year

    WHY does government give “subsidy?” That is real question as the answer is government gets huge benefits in return for that “subsidy” and hence capital grant is best and has to be viewed as invest to save, or in political language “something for something!”

    In return the government pays out far less in revenue subsidy (aka Housing Benefit) and currently pays 3.4m social tenants £21.05 per week less than it pays to private tenants.

    Ergo the £1.125 billion per year ‘handout’ by the taxpayer to social landlords saves the same taxpayers £3.73 billion per year in housing benefit.

    2) As social rents average circa £92 per week and private ones average £180 per week the out-of-work social tenant can afford to take up employment that pays £88 per week less than his PRS neighbour. Ergo the PRS is more “welfare dependent” than the SRS

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