High-earning tenants to pay 80% of market rent
High-earning social tenants could see their rents increased to 80 per cent of market rate under proposals published by the government today.
The ‘Pay to stay’ consultation paper seeks views on how such a scheme would operate, and at what level the income threshold to require higher payments should be set. Options on the table are £60,000, £80,000 or £100,000, with the government indicating it is likely to favour one of the higher figures.
The paper makes it clear the government intends to apply the proposals to new and existing tenants, although it asks for views on problems applying the plans to the latter group.
It says the government would like to raise rents for high-earning tenants to market levels, but the charitable status of housing associations could make this difficult, so it is proposing a rise to 80 per cent of market levels in the short term.
Estimates of the number of tenants who would be hit by the plans vary widely. The government’s figures suggest between 12,000 and 34,000 households earn more than £60,000, between 2,000 and 11,000 earn £80,000, and between 1,000 and 6,000 earn more than £100,000. The National Housing Federation said around 2 per cent of tenants earn more than £36,400.
Housing minister Grant Shapps is expected to highlight the proposals when he addresses the Chartered Institute of Housing’s annual conference tomorrow.
‘A lazy consensus about the use of social housing has left landlords powerless to deal with this problem. So we want to call time on this blatant unfairness and these handouts to the very rich,’ he said.
‘Proposals I’ve announced today will give landlords the option to charge high-earning social tenants a fair level of rent - so if they want to continue using this precious national resource, they will pay for the privilege.’
The NHF said it understood the reasons for the policy, but questioned its impact.
Chief executive David Orr said: ‘This change will still not be enough to ensure we are properly tackling the housing crisis.’
Hammersmith and Fulham Council, which is proposing to stop households with an income of more than £40,200 from accessing social housing, said it was supportive of the government proposals.
Andrew Johnson, cabinet member for housing, said: ‘It is an absolute travesty that so many of our low income residents have to pay astronomical weekly rents, while some people earning in excess of £60,000 are getting away with a weekly rent of around £100.’
But pressure group Defend Council Housing said it would fight the plans. It called the proposals an ‘attack on the principle of council housing’ and ‘part of a sustained attack on tenants’ rights’.