Social housing, economic activity and ‘residualisation’ – historical perspectives

The nature and role of social housing has obtained increasing prominence in national policy debates over the last four decades. The introduction of generous discounts for council tenants to buy their homes under the Right to Buy from 1980 onwards, and its more recent ‘reinvigoration’ and extension to housing association homes has resulted in the sale of 1.9m social homes in England.

Social housing, including both council and housing association homes, has fallen from 5.5m homes in England to just over 4m today; that is, from over 30% of all homes to just 17% since 1980.

Social housing has become an increasingly marginalised sector, with housing policies since 2010 accelerating its demise – especially government promotion of other forms of ‘affordable’ housing and expansion of social housing sales without a one-for-one replacement.

The sector has also become home, many observers claim (e.g. Murie 2016), to proportionately more poor and disadvantaged tenants in contrast to the 1945 to 1979 period. This process of ‘residualisation’ has characterised today’s social housing as a ‘welfare’ tenure for those with little choice in the wider housing market.

‘Residualisation’ has come about partly by more affluent social tenants buying their homes; especially during the 1980s. Wider tenure restructuring – including promotion of home ownership by governments of all political stripes – and compounded by successive governments under-investing in new social housing are also drivers.

The Index of Residualisation (based around income and welfare indicators – Pearce & Vine 2014) provides a means of quantifying these changes. The Index reveals that social housing in 2010 was three times more ‘residualised’ than in 1970. But that ‘residualisation’ has been broadly stable from 1990s onwards.

Yet the economic status of tenants, in comparison with other tenures, has broadly moved in a positive direction over the last ten years.

Some 43% of social renters are economically active today compared with 32% ten years ago, although the economic activity rates is a little below that recorded four decades ago. This remains significantly below the rates for home owners (at 91%) and private renters (at 74%).

A clear trend, mirroring fundamental changes in the jobs market, has been the growth of part-time working in all tenures and especially in social housing. Some 13% of social tenants are now employed part-time (30% of all working social renters) from 4% in 1981 (2% of all working social renters).

The unemployment rate is 7% for social renters in contrast with 1% for home owners and 4% of private renters. However, the number of ‘other’ economically inactive social renters (mainly lone parents looking after children, disabled tenants and others ‘at home, not looking for work’) has climbed significantly over the last four decades – from 15% to 22%, although has fallen slightly over the last ten years.

The number of retired social renters has also fallen from 30% in 1981 to 27% today (61% for outright owners, 4% for home buyers and 9% for private renters).

Many argue that the ‘real’ economic activity rate should be calculated by removing retired households to produce figures for employment and unemployment. Doing this for all tenures reveals an employment to unemployment percentage rate of 58:10 for social renters, 91:2 for outright owners, 95:1 for home buyers, 80:4 for private renters.

The majority of employed social tenants (56%) are employed in routine or semi-routine occupations and just 2% are working in the professions or higher managerial positions. These run considerably behind rates for workers in other tenures (e.g. 18% and 20% for home owners and 27% and 15% for private renters respectively).

Murie A. (2016) The Right to Buy?: Selling Off Public and Social Housing, Policy Press Short Policy and Practice. Bristol.
Pearce, J. & Vine, J. J (2014) Housing and the Built Environment, 2014) 29: 657. doi:10.1007/s10901-013-9372-3

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