Friday, 24 October 2014

Shapps: affordable rent is here to stay

The housing minister has insisted the affordable rent regime is here to stay, despite accusations that it is unsustainable.

In a briefing ahead of his appearance at the Chartered Institute of Housing conference and exhibition this afternoon, Grant Shapps said affordable rent is a ‘long-term model’.

‘I don’t think the system is going to go away now,’ he said. ‘I think affordable rent, regardless of which political party is in power, will be a feature of the housing system.’

Earlier in the week outgoing CIH president Paddy Gray told the conference the government’s housing reforms are ‘flawed and unsustainable’.

Under affordable rent landlords will be able to charge rents at up to 80 per cent of market level, to fund more development. The Homes and Communities Agency is currently negotiating with landlords who have bid for funding through the scheme, which is intended to deliver 150,000 homes by 2015.

Mr Shapps said there have been more than 200 bids for funding, with an even geographical spread. ‘We are pretty confident that we should be able to get 150,000 plus affordable rent homes out of it,’ he said.

Mr Shapps was also questioned about the impact that paying benefits to cover housing costs to tenants rather than landlords could have on the attractiveness of the housing association sector to lenders, a subject covered by his ministerial colleague Lord Freud at the conference yesterday.

The housing minister said the government is well aware of the potential impact on housing association finances. ‘We have no intention of ending up with a system where landlords lose out,’ he said. ‘Quite the opposite. We want to see a system that has much more flexibility.’

Mr Shapps is not expected to give a speech at the conference, but will be responding to questions. The key theme of his appearance is expected to be transparency, with the announcement of a consultation on making housing associations subject to the freedom on information act, and a focus on the pay of senior executives in the sector.

Readers' comments (5)

  • And telling them to publish all expenditure over £500. And not being fazed if they retort that they are private companies which if they were forced to act like public bodies would have to have their £40bn debt pile loaded onto the PSBR.

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  • Chris

    Another non-story from the Minister.

    Of course his affordable rent product is here to stay, especially as it was here to begin with under the name Intermediate Market Rent or Sub-market Rent.

    What is unsustainable is the Minister's insistance that it become the main tenure model - if that were sustainable then he would not be taking issue with the cost of HB, and there would be no waiting lists because everyone could afford the private sector level rents.

    All Shapps has proven with his statement is that he is as detached from reality as ever and devoid of understanding as always.

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  • ‘We have no intention of ending up with a system where landlords lose out'. But we are ending up with a system where tenants lose out. 80% market rent in social housing is a scandal.

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  • I ask again how can we get rid of this man before he destroys the whole of the rented sector ALMO, HA, TMO, PRIVATE etc.

    Every time he makes a statement he causes upset, somebody please help tenants.

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  • Chris

    There is a problem with the Minister's proposal to move the majority closer to market level rents, as shown by the recently released DWP statistics:


    At March 2011 There were 4.87 million recipients of Housing Benefit, of whom almost three-quarters were aged under 65.

    The average weekly amount of Housing Benefit paid to Social Housing Tenants was £67.83. (£3,527 per annum)
    The average weekly amount of Housing Benefit paid to RSL Housing Tenants was £77.16. (£4,012 per annum)

    68% of Social Sector tenants receiving Housing Benefit

    The average weekly amount of Local Housing Allowance Paid to regulated private tenants was £78.59. (£4,086 per annum)
    The average weekly amount of Local Housing Allowance paid to unregulated private tenants was £114.47. (£5,952 per annum)

    79% of Private Sector tenants receiving the Local Housing Allowance

    (source: DWP STATISTICAL SUMMARY; 15th June 2011)

    What the Minister is proposing is to move as many of the people from the £3,527 and £4,012 per annum bands into the £5,952 per annum. On cost to the taxpayer alone this would appear to be movement in the wrong direction. At least if the regulated rent levels, which currently attract and average benefit of £4,086 would save the tax payer nearly £2,000 per benefit entitled tenant per year.

    Of course, there is the better alternative of allowing more people access to social rents, but why on earth would the Minister want to save nearly £2,500 per benefit entitled tenant per year.

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