Landlords stuck in affordable rents stand-off
Deadlocks between housing associations and councils over rent levels are threatening to derail the £1.8 billion affordable homes programme.
Councils, housing associations and the Homes and Communities Agency were due to meet yesterday in an attempt to avoid a damaging showdown over the issue.
There are now around a dozen councils in London, as well as a small number of authorities elsewhere in southern England, which have raised objections to the rent levels agreed between associations and the HCA in return for development cash.
Under the scheme, which allows landlords to charge up to 80 per cent of market rent on new homes and some re-lets, councils can veto schemes they are unhappy with.
This caveat has led to fears that some associations’ development plans will be scuppered or delayed if councils stick to their guns. The first contracts were due to be signed in July, but to date just five successful bidders have signed on the dotted line.
James Tickell, director at consultancy Campbell Tickell, said landlords were waiting to see ‘who gives way first’ in the stand-offs. He added: ‘Councils have to choose whether they want expensive homes or no homes.’
The G15 group of housing associations was due to use the meeting with the Greater London Authority and London Councils yesterday to express their concern.
Brendan Sarsfield, chief executive of 20,000-home association Family Mosaic, said: ‘The big principle here is that we have agreed something with central government. For a local authority to then change that means we are piggy in the middle.’
Mr Sarsfield said decisions needed to be made quickly as the programmes is already six months in and payment is by results.
Keith Exford, chief executive of Affinity Sutton, said it is ‘impossible’ for associations to change their bids. He said councils are only now engaging with rent levels as they produce new tenancy strategies required under the Localism Bill.
Charlotte Harrison, director of policy and strategy at the Northern Housing Consortium said: ‘Some authorities have told us they felt they did not know what was coming forward.’
Nigel Minto, head of housing for London Councils, said: ‘Councils were only presented with bids in late August and early September. For them to be presented as delaying bids is unfair.’
Hitesh Tailor, cabinet member of housing at Ealing Council, said he is keen to see as many homes built for social rent as possible in the west London borough. Other councils, including Waltham Forest, are restricting rents based on property size.
A spokesperson for the GLA said it is happy to listen to thoughts or concerns about the programme’s delivery.