The Limits of Housing Reform: British social rented housing in a European context

The British social rented sector has been characterised as operating like a socialist 'command' system. It places a much greater emphasis on housing very poor households than its counterparts in other European countries, most of it is still owned and managed by the (local) state and pricing policies are not sensitive to demand. Consequently, allocation decisions rely on bureaucratic processes. Some other European countries have more socially diverse social rented sectors and make much greater use of price signals. These systems have been characterised as 'social markets'. It has been suggested that Britain could adopt some of the organisational structures and practices used elsewhere and move away from the present 'command' system towards a 'social market'. Comparative evidence confirms that the British social rented sector does contain much greater concentrations of poor households and that this does not simply arise from the types of household housed in the sector. But further analysis of the distribution of income and work suggests that the divisions in the housing sector may primarily reflect these broader contextual divisions. Greater poverty and inequality imply a greater need for the housing system to provide a safety-net and make the introduction of market and quasi-market mechanisms problematic. This is illustrated with reference to allocations and pricing reforms currently under consideration. It is concluded that, given the socioeconomic context in which housing policy is formulated, it might be best to concentrate on providing an effective and high-quality safety-net.