JRF report finds falling housing subsidies explain decline in renter affordability

The Joseph Rowntree Foundation (JRF) published a report on 18 January 2023 arguing that the erosion of housing subsidies explains the decline in housing affordability for renters over the past 40 years¹. The report, Housing affordability since 1979: Determinants and solutions, was written by Ian Mulheirn, James Browne and Christos Tsoukalis¹.

The JRF says the value of housing subsidies fell from 16.5% of the total day-to-day cost of housing services in the national accounts in 1979 to 11.5% in 2019-20¹. Had subsidies stayed at their 1979 share of total housing costs, the report says they would have been worth £45 billion in 2019-20 rather than the actual £31 billion¹. It adds that rents in both the private and social rented sectors are close to their highest for decades as a share of tenants' incomes¹.

The report sets out a split approach by household type. It says social housing is the most appropriate solution for low-income families with children, pensioners and those with a disability, and that an additional 700,000 social properties would allow the level of social renting among lower-income families with children to return to its 1979 level, while reducing the share of lower-income working-age disabled people in private rented accommodation to below 10%¹. Housing Benefit, it says, should remain a complementary tool for households who are temporarily poor, or for whom labour mobility and choice matter most¹.

On the private rented sector, the JRF calls for the Local Housing Allowance freeze to be ended, for rates to be re-linked to the 30th percentile of local rents, and for the reforms outlined in the government's "fairer private rented sector" White Paper to be introduced¹. The report does not give a timetable for any of these measures, and no government response to the report is set out in it¹.

Why it matters for households

The report concerns private and social renters in the UK, and the benefits that help with housing costs. Its central claim is that subsidy levels, not only market rents, have driven affordability over four decades¹. For households receiving Housing Benefit or the Universal Credit housing element, the practical point is the Local Housing Allowance: the JRF says the freeze should end and rates should be re-linked to the 30th percentile of local rents¹. The report does not state what that would mean for individual award amounts, and no figures for household-level gains or losses are given¹.

The 700,000 additional social properties figure is presented as the number that would return social renting among lower-income families with children to its 1979 level and bring the share of lower-income working-age disabled people in private renting below 10%¹. The report does not say how such homes would be funded or delivered, or over what period¹.

What happens next

The report makes recommendations rather than announcing measures. It calls for the Local Housing Allowance freeze to end, rates to be re-linked to the 30th percentile of local rents, and the private rented sector reforms in the "fairer private rented sector" White Paper to be introduced¹. No dates for these changes, and no government commitment to them, are reported in the document¹.