Posted by: Tom Lloyd18/06/2012
There is clearly some appetite from housing professionals for setting tough limits on the amount tenants in social housing can earn.
When we asked readers recently what they thought the earning limit for social housing should be the biggest group – 38 per cent – favoured a limit of just £40,000. And a poll conducted at last week’s Chartered Institute of Housing conference found 87 per cent of delegates agreed with the principle of charging high-earning tenants more rent.
But the consultation on the proposals, published by the government last week, makes it clear just how difficult coming up with any workable option will be.
Even deciding what the earning limit should be is complicated. The paper suggests between £60,000 and £100,000, but housing minister Grant Shapps said he was keen not to introduce a ‘break on aspiration’. A lower limit could do just that, but a higher limit would limit the effectiveness of the policy.
Then you have the whole question of implementation. Who is going to monitor household income, and how is it going to be policed? And how can the policy be applied to existing tenants? Mr Shapps said he was prepared to rewrite the law to make it work, but this could be a lengthy process.
In the short term the government is hoping it might be able to raise rents for high earners to 80 per cent of market level through secondary legislation, rather than the primary legislation required for its preferred option of raising rents to full market level.
This seems to send a rather odd message though. Eighty per cent is, of course, the maximum level that can be charged under the affordable homes programme, so is that the right amount to charge high-earning households?
No doubt all of these problems could be overcome, but would it be worth the effort? Answering that question would be a lot easier if we had some clear data on how many households would be affected, but that is hard to come by.
The government says between 1,000 and 6,000 households would be hit by a £100,000 cap, 2,000 to 11,000 by £80,000, and 12,000 to 34,000 by £60,0000, but the wide variation in the figures doesn’t create confidence.
It’s easy to see why housing professionals and the public might support ‘pay to stay’ but there is a danger this could be a policy minefield with little of any value on the other side.
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