Trend report: how housing association employees’ wages have changed over time

When compared to the Consumer Price Index including owner-occupiers’ housing costs (CPIH), housing associations’ wage inflation was above the CPIH from the beginning of 2019 until mid-2021. After this, the CPIH rose sharply to nearly 10 per cent. However, in October 2023 the CPIH fell below the average HA wage increase for 2023 of 5.5 per cent.

2023 saw the greatest year-on-year increase in wage inflation in the five-year period, of 5.5 per cent, and 2021 saw the smallest increase, of 2.76 per cent. Average staff pay increases in the 2023 financial year resulted predominantly from the cost of living and recruitment challenges driving competition in the market, as identified by Social Housing.

The CPIH, calculated by the Office for National Statistics (ONS), is the rate at which the prices of goods and services bought by households rise and fall; it is estimated using consumer price indices and includes owner-occupiers’ housing costs and council tax, which are excluded from the CPI.

As an indicator of inflation, the CPIH can be compared to wage inflation in the social housing sector to measure the purchasing power of wages.

HA wage inflation, measured annually beginning in April as a comparison of average FTE wages across all English providers with 1,000-plus units, remained greater than the CPIH throughout 2019 and 2020, where the CPIH fluctuated between 0.5 to 2.0 per cent. 2021 saw the CPIH, measured monthly by the ONS, rise above the 3.1 per cent annual HA wage increase in October and continue to sharply rise to nearly 10 per cent in later months of the year, resulting in real wage falls in purchasing power in these months.

There was a stabling and then reduction of price indices in 2023 and in October of last year, the CPIH fell below the 5.5 per cent wage inflation rate for the year and remained just below it at the end of the year.

The average FTE wage for HAs in 2023 can be broken down further to discover regional variations using location of HA stock data provided by the Global Accounts, combined with average wages of these providers.

The South East and London had the two highest average wages in 2023 with £40,579 and £39,973 respectively. The East Midlands received the lowest average wage of £28,635. HAs that have a mixed region, where no region has over 50 per cent of total stock, averaged at £32,604 FTE wage and by far the highest number of staff per HA at 2,201 on average, the second-highest average being London at 661.

The Real Living Wage, paid by 55 out of the 62 registered providers whose ESG reports Social Housing has analysed, rose in October 2023 to £12 (up £1.10) an hour across the UK and to £13.15 in London (up £1.20). This will drive up average wages in the sector, particularly among providers who specialise in care and support where a high proportion of staff will be paid the real living wage and benefit from the living wage increase.