It's reasonable to give British people greater priority for social housing

Social tenancies, migration and nationality

The Guardian reported the other day that the government was proposing to give British nationals greater priority for social housing.

There has been controversy on social media in recent months about the proportion of social housing which is occupied by people born overseas, and the number who are not UK nationals (two different things). Hopefully this post will give people easier access to the data and trends on on both.

Background

Given the security and lower rent, more people want a council house than there are houses available. So local councils run points-based systems to decide who gets what. As an example, Islington’s system is here.

The Housing Act 1996 sets out that a local authority must design their allocation scheme in such a way as to give 'reasonable preference' to certain categories of people. This basic approach has been around since the 1977 Housing Act. People are most likely to be get housed if they are threatened with homelessness, have kids, have unsanitary accommodation or are ill, and so on. These factors dominate decision making, but various other factors can also score in a points-based system. For example, the Government has already taken a number of steps to improve access to social housing for veterans within the points based system.

Social housing by country of birth

First, lets look at the proportion of social tenants where the head of the household (the “Household Reference Person” in census jargon) was born overseas, with data from Census 2021. I have mapped it at the level of the parliamentary constituency, but finer-grained data is available, down to the level of the neighbourhood. There is massive variation around the country: Less than 7% were born abroad in Wales, while it was 20% in England as a whole and just under half (47.6%) in Greater London. This last statistic, about Greater London, is the one that has triggered lots of debate online.

There have been a number of responses to this data. Obviously many of those who were born overseas have UK nationality now. And many have been settled here for quite a long time. The map above also has data for the numbers who have arrived since 2001 if you hold your mouse over it. The proportion of social tenancies that are headed by someone who arrived since 2001 are obviously lower: 4% for Wales, just over 10% for England, and 17.5% of social tenancies in Greater London.

If people are UK Citizens they have the same rights as other people - but from an economic point of view, people becoming British nationals doesn’t make much difference to the effect on the scarce supply of housing.

In greater London the number of socially rented properties is very similar to 2001: it was 801,000 in 2001, fell to 781,000 by 2010, and recovered to 793,000 by 2022.

Having 377,000 occupied by people born overseas (or 183,000 who arrived since 2001) still means those properties are not available for other people.

Some people want to wish these challenges away. But migration at the record rates we have seen in recent years inevitably means the capital stock of the country is diluted between more people; fixed assets built up over time are shared by more users, be they roads or tube lines or council houses.

Of course, we can build more council houses, but this is not cheap, particularly in expensive cities like London. Through the Affordable Housing Programme 2021-26 the government is investing £11.5 billion across the country to build about 180,000 affordable homes of various kinds.

Across England and Wales as a whole, people born overseas were a bit more likely to be in social housing than people born in the UK: 18% compared to 17% in 2021.

On the one hand, that rather undermines the argument of those who still think migration is ‘rocket fuel for growth’. If our long term policy had been selecting high wage migrants to make Britain the grammar school of the western world, then the share of migrants in social housing would be much lower than for those born in the UK. Instead, it is slightly higher. The cash benefits system sees similar trends: the proportion of non-EU nationals who have been in the UK for more than five years who are in receipt of benefits is higher than for UK nationals - 28% vs 25%.

The truth is that a significant chunk of UK immigration is not for work, and that a large chunk of those who are coming for work are coming for low wage work, or to work in the grey economy, just as was the case decades ago.

But the distinction between UK nationals and every other nationality lumped together conceals much more than it reveals. There is massive variation between people from different countries.

Western Europe, Canada, New Zealand, the USA all see low proportions in social housing. In contrast people from countries like Afghanistan, Ghana, Jamaica and Somalia, the proportions are very high (36%, 37%, 41% and 72% respectively). There is big variation within regions: looking at South Asia, rates varied from 6% for people from India to 15% for people from Pakistan to 34% for people from Bangladesh. While the average for people from Africa was 32%, the range ran from 9% for South Africa, to eight times that for people from Somalia.

Social housing by nationality

All of the above is relevant to the discussion about migration, and the argument for moving to a system with lower, more selective immigration.

But in terms of changing policy on social housing, the focus is on giving greater priority in the allocation of social housing to people who are British nationals - not just people who were born here.

The census doesn’t collect data on nationality, at least not directly. So how many social tenants are UK citizens, and how many are not?

The CORE dataset collects information about the flow of new social lettings by nationality. The proportion of social housing being let to non-UK nationals is obviously smaller than the proportion born overseas, but it has been rising in recent years. The next data on this will be out on Wednesday, so we will see if it continues to climb. The most recent data is currently for the year ending March 2022, so pre-dates the arrival of many people from Ukraine and other humanitarian routes, and also pre-dates the current working through of the asylum backlog, which local authority leaders expect will lead to new claims for social housing.

The share of new social lettings in England to lead tenants who are not British nationals climbed from a bit under 6%, to just under 10% in 2021/22.

There is huge variation around the country. In many shire and coastal areas, the proportion is lower. But it is worth noting there are some non-urban areas where a large share of social tenancies are going to people who are not British nationals: Boston, East Cambridgeshire, East Staffordshire and so on.

In many urban areas the share is also high: it was 17% across Greater London but as high as 40% in Brent, and above 20% in several London Boroughs. In places like Manchester it was over a fifth, and not far off a fifth in places like Sheffield and Birmingham. It was also high in smaller cities like Ipswich, Oxford and Leicester.

With this in mind, I think it is fair for the government to be looking at ways to give UK nationals greater priority for social housing. This is no magic bullet for our housing challenges, and I can’t think of anyone who would say it was. But the proportion of non-UK nationals getting social housing has gone up quite a lot, and in a number of places now accounts for a significant proportion of the total. I’m sure the reasonable preference categories will stay and it is unlikely to mean no one who isn’t a UK national gets council housing. But the balance of the system could give greater weight to British nationals for the same reasons there is some preference for those with stronger connection to a local area.

A wider debate

Obviously the discussion about giving British nationals greater priority for social housing is part of a wider debate about the purpose of social housing.

Since the 1977 Housing Act the allocation of social housing has been needs-based rather than contribution-based or desert-based.

This is a big change. In the early and middle part of the twentieth century, social housing often charged higher-than-market rents, but offered high quality housing to replace slums, and the selection of tenants was made on the basis of who was reliable and deserving. It often came with a hefty side order of methodisty / fabian social reform. As a young man in post-war Castlemilk my father had to travel a long way to go to the pub, because Glasgow banned pubs on Corporation property between the 1890s and the 1960s. But social housing gradually came to be allocated on the basis of what people needed need not what they were seen to deserve or have earned - a process accelerated by the 1977 Act. This radically changed people’s incentives in the process.

The Hills Report (p100-111) published under the last Labour government found that social tenants had employment rates lower even than equivalently disadvantaged people who were not in social housing. This may reflect the greater difficulty of moving for work for social tenants, or the incentives set up by social housing itself, both to enter the system and move within it.

While employment rates have improved since 2010, households in social housing are still much more likely to be workless than private renters or those paying mortgages. In cities like London the net result is that large numbers of workless households are housed in expensive properties in the centre of the city, while many other people commute a long way and pay a lot to be there for work. This has inevitably led to a ongoing debate about whether there are better ways to help poor households and working people facing high costs.

Conclusion

Social housing data once again shows the massive variation in outcomes between different groups of people that have come to the UK. It is only one lens, but shows that migration policy has been off track for a long time - if we had been consistently running the selective, high-wage high-skill migration policy I argue for, then we would see migrants much less likely than those born in the UK to end up in social housing. But it is the other way round.

I think it is fair for the government to look at ways to give UK nationals greater priority for social housing.

This is no magic bullet for our housing challenges - or even the challenges in social housing. And there are much wider debates to be had about the future of social and affordable housing. But it is reasonable, in a system that is not contribution-based, for the government to want to give greater priority to its own citizens.