One policy needed for housing benefit tenants

Now the facts are before us, politicians can no longer hide behind myth and conjecture. If any doubt remained over whether the era of Britain as a nation of homeowners is over, this week's census results provided final confirmation.

For the first time in decades home ownership is in decline, falling from 69% to 64% of all households. We can expect it to have fallen further by the next census in 2021 (if the fact-finding exercise survives government spending cuts) as Generation Rent reaches middle age.

Meanwhile, the number of households living in the private sector has almost doubled to 3.6 million, making up 15% of households in England and Wales. This is the way we live now.

The Labour party has been promising for some time to put housing at the core of its election strategy in 2015. The census figures suggest this is a sensible move, and much to the delight of housing professionals it is finally set to become a doorstep issue. Although Labour has yet to make any firm policy commitments in any other area, this week the party revealed plans to tackle instability in the private rented sector.

Labour is planning to offer private landlords the chance to be paid housing benefit directly – scrapping the present government's proposed universal credit system that will require all benefits to be paid in a single lump sum each month – in return for long-term tenancies and more stable conditions that allow families living in the sector to put down roots and flourish.

Landlord lobby groups have already stated that their members will refuse to offer tenancies to DSS private renters claiming housing benefit under the new welfare system, removing properties from the market rather than driving down the cost of rent in high-demand areas as the coalition government intended.

The question is, where does this proposal leave social housing providers? While many support the ambition of welfare reform to support financial inclusion and help ease the transition into work, universal credit places their primary income stream at risk.

It's an old argument but worth repeating here: some tenants will struggle to manage their money and meet rental payments under universal credit, which puts housing associations' finances at risk, reducing their capacity to develop new properties and house more people at a time when, now more than ever, we are in desperate need of new homes.

Social landlords already offer stable tenancies in supportive communities, and provide the additional support (education and training, childcare, cultural events) that helps often vulnerable people live fulfilling lives.

Under these new proposals, they are being punished for their good work while an unregulated and often unfit commercial sector is dangled a carrot to encourage it to change. (Little is said about licensing, regulation or rent levels in the private rented sector, despite shadow minister Jack Dromey's own enthusiasm.)

The 2011 census also tells that although home ownership fell, the number of people who own their property outright without a mortgage actually grew by two percentage points from 29% (6.4 million) to 31% (7.2 million). This is a sharp illustration of growing inequality in our society.

Introducing different rules for private and social landlords around welfare and financing will only exacerbate that inequality. Labour is right to reconsider the direct payment of housing benefit to tenants, recognising all the thorny unintended consequences of the coalition policy, but it must reconsider it for all landlords.