Expertise please - rent regime after 2015?
17/02/2011 9:42 pm
Hello, I may be moving from a "regulated" (pre 1989) rent HA place to another HA flat with a higher rent and an assured tenancy without the older "fair rent" status.
I would appreciate expert opinion. My question is what will happen to non-fair rent tenants after the current rent setting regime for social housing runs out in 2015? Will all HA rents jump to "affordable" 80% market level or will a system like current RPI plus 1% (or whatever it is exactly now) continue? What is likely to happen?
I am worried that "fair" renters will be protected and all other social housng will become prohibitively expensive, thereby potentially forcing me out of my new home if I move.
Thanks for help.
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17/02/2011 9:44 pm
PS I am in London, on a low income and the market rents are frighteningly high to an ordinary Londoner.
17/02/2011 11:10 pm
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18/02/2011 0:07 am
I am doing a mutual exchange to a flat without a "fair rent" status. I don't really want a conversation about this please. What I need is expert opinion. Thankyou.
18/02/2011 9:52 am
My understanding is this:
whatever the new rent regime, method for calculations etc. if you are an exsisting tenant your rent will remain the same - the proposals are for new tenancies only.
so - you will lose your "regulated" status anyway as part of the move but will become an "assured" tenant. your rent will fluctuate in accordance with any assured rental increases / decreases but should not be subject to the new 80% as it is not a new tenancy - assuming you move prior to the new rent regime comes into effect.
as i say this is only my understanding of it - i do not profess to be an expert. I would also suggest (for speed as these forums are not always the best) speaking to Shelter or the CAB as they will offer you impartial advice away from the bickering / opinions of these forums.
18/02/2011 11:13 am
Thankyou Bill. I understand what you say, but what to experts here think will happen to "assured" rental fluctuations when the rent setting formula runs out in 2015?
18/02/2011 12:04 pm
It would not be possible to move you from one form of tenure to another, without the first tenure expiring. Thus your fear of being bumped into the unaffordable Shapps rent is not grounded, so long as you never move home.
However, there would be nothing to stop a similar exercise to the current balancing up exercise, rent convergence, that has already seen social rents increase way above inflation. It would be in keeping with the Shapps thinking to force all landlords to increase rents until they exceeded the 80%MR minimum, thus making private rents look competative, and ensuring that housing insecurity matches employment insecurity inflicted upon the wage earning majority.
In short therefore Paul, if the buggers can't get you one way they will get you another, unless, of course, they can be stopped.
18/02/2011 1:53 pm
If all assured tenancies rose greatly in cost the housing benefit bill would rise massively. Would even this government do that? Is it likely in 2015 that the rent formula will be discarded or will something similar be adopted?
Economists or housing finance people please comment. I do need expert opinion.
18/02/2011 2:19 pm
Yes they would increase the cost of tenancies - Shapps has stated that he believes rents to be too low when he termed 80%MR as affordable.
Of course they would not wish benefit cost to rise, that is why they have pegged them and what is behind their understanding of universal. Thus if you can not pay your rent from the meagre allowance that tops up your wage, or is in place of you workfare income, then you loose your home.
This way the government remove the housing shortage, as if you can not afford it you will not be on a waiting list, in temporary accomodation, or anywhere else than out on the street. They also cause the over inflation of house prices as without the benefit pounds making the profits of private landlords there will be no point hiking the rents up, especially once the existing units have been rationed and the poor expelled.
They may be cruel and inhumane, but they are not silly.
18/02/2011 3:15 pm
Could someone esle also give their view. I too fear what PSR says. If what he says happens all HA tenants on assured tenancies and low incomes or full housing benefit will be forced out of inner London after 2015. So if I move over to a non-rent-regulated assured tenancy via exchange I can expect to lose my home after 2015? Other views please?
I am now frightened to do my exchange.
18/02/2011 9:57 pm
Paul - do not let this government nor Shapps put fear into your life. It is your life so live it as you will. Be as free as you can and enjoy.
If you live worrying what may or may not happen you may as well just lie down and die - why give the likes of Shapps such satisfaction through an easy kill - make him work for his objectives.
Live where you want to live, but don't put yourself into immediate debt unless there is no alternative. One little way you can fight back as an individual is to exercise a strike on capital. If you do not need it do not buy it. Without consumers capitalism dies. You may only be one person, but millions are losing jobs pay and benefits. They will not be consuming either. Bank the excess in the cooperative bank, or donate it to a political party that opposes all that this government stands for.
The Tories have not changed from the disaster they were in the 80's. This is not suprising as Labour only encouraged them to remain extreme by copying all that they were and are.
The words of an Arab were touching earlier this month. He said ' I am not afraid to die; this is not living; without employment or fairness I am not alive so I protest to win back my life'. Protest Paul, any way you can, even if that is only by remaining fearless because you know you are morally true, unlike those governing you.
18/02/2011 10:27 pm
Thanks for the encouragement above. But to be honest, what I am really looking for here is summed up in the name of this forum - "Ask the experts". I really want housing experts to use their best judgement to give me an idea of what is likely to happen to assured tenants' rents (those without pre 89 "fair" rents) after 2015?
19/02/2011 8:07 am
Paul calm down.
This section is called Ask the Expects, however there isn't a dedicated team who can answer any given question at a moment's notice. The experts often do get back but that can only happen if there is someone who has experience in the area of the question being asked. This is a difficult question to answer because none of us are able to predict the future.
If you want to exchange then do. If you don't then don't. Worrying what the government may or may not do in four years time is a tiny bit pointless. Also I don't really understand why you think you'll be 'forced out' of your home anyway? If you're on HB then you'll be covered, if you're not then unfortunately you'll have to suck it up and pay the rent required.
Apologies for being blunt but that's the way it is.
19/02/2011 9:50 am
If your priority is the secure aspect of your current tenancy, do not move unless you are guaranteed a new SECURE tenancy.
With the introduction and fragmentation of tenancies the governements and landlords have made sure that new tenancies will have higher rents and be less secure for tenants.
This has trapped all secure tenants in staying where they are and denied them in practice the right to transfer, unless they are prepared to lose security rights in exchange for less security. Many secure tenant have been fooled in giving up their tenancies with loss of rights.
19/02/2011 11:25 am
Thanks for your responses. I am getting an "assured" tenancy if I move, not a new "affordable" tenancy (for your information). I am on housing benefit because I am seriously unwell. What I am concerned about is this. The flat I might be moving to is in Kensington borough, in a part that has become mostly populated by extremely wealthy people where previously there was much deprivation. I am concerned that in 2015 the rent setting formula (RPI +2% or whatever it is) will be taken away. In a rich area the local income level (which is in part used to calculate HA rents) may then force the rent up beyond what Houising Benefit will pay, thereby forcing people like me out of their homes, in the same way as private tenants will be forced out of places in central London right now.
19/02/2011 4:23 pm
Just to make it quite clear. Once you have left you secure tenancy, not matter what other kind of tenancy you are going to get, if it is not secure, you are not going to be protected against rent raises like existent secure tenants still are. If you move into Westminster, I would be constantly worried that what you fear - being forced out - will happen. No matter what promises you will be given by governements, LAs and social landlords there is a general hostility which has been growing over the years against social tenants in rich areas and this one way or another will make social tenants in these areas suffer more than those in poorer areas in terms of pressure to make them leave and go somewhere less affluent.
No one and nobody will change this situation until you and people in the same situation like you do not take up the fight against all this happening.
If you were not there recently, in front of Parliament to protest at what is happening to social housing tenants, then there is little hope that the situation will stop getting even worse.
19/02/2011 6:17 pm
I have done my share of (successful) protesting and now am attending to my own health.
Besides general trends (I agree that there is some hostility to social renters in wealthy areas) what I am asking is for people who understand economics and social housing to comment on what is likely to happen to the rent setting formula after 2015? I realise no one knows for sure yet, but I would like to hear technically informed opinion. Please, no more general comments on political trends (most of which I see myself, and already understand). Thanks.
21/02/2011 11:23 am
Put another way, what will happen to social rent levels and "convergence" after 2015? (Informed, specific opinion please).
21/02/2011 1:52 pm
I'm no expert but a few facts to consider:
The existing formula was introduced by Labour in 2001 and there was no suggestion that they were planning to scrap it when they left office. It has been used again by the coalition this year without hesitation and I don't think it was even mentioned in the government's housing policy consultation a couple of months ago. It would therefore seem to have all-party support.
There has been very little opposition to the formula over the years from landlords or politicians; a bit more from tenants perhaps but the only real fuss I can remember was a couple of years ago when it required rent reductions.
It was initially supposed to achieve convergence by 2010 but has already been extended by 5 years to 2015. It seems pretty unlikely that it will achieve full convergence by then either. The current consultation on council housing finance states: "the valuation will assume convergence with formula rents by 2015-16, followed by rent increases of just above inflation year on year - set at RPI + 0.5% per annum. "
Assuming convergence is achieved it would be odd to immediately allow council and housing association assured rents to start diverging again by applying different rules to each,
Given the above I wouldn't be at all surprised to see the formula continue beyond 2015.
Finally one important question to ask is what your tenancy agreement will say about rent increases. It may not be specific but if it is then that will be an enforceable contractual commitment from the landlord to you. As you are doing an exchange you will be taking on the other person's tenancy agreement so you should be able to find out now what it says. If the property has been part of a stock transfer it may carry some firm commitments around rent levels.
21/02/2011 4:29 pm
Thanks to Eddie. That is very helpful and the most specific advice so far that I can find.
22/02/2011 6:35 am
As I understand it (and I may be wrong) the government, in its wisdom, has set rents in social housing, to continue under the current formula (other than the £2 per week to achieve rent convergence after it has been achieved) until 2015.
I would imagine this would be intended to have the effect of allowing lenders to lend based on existing business plans,
We can only speculate what the rent setting regime may/could be after then.
I think it really will be a case of waiting to see what they intend to do as and when they decide what to do.
I wonder what will happen to the rents of tenants when the whole of a landlord's rents reach convergence next year or have reached them already.