Saturday, 23 May 2015

Negative response to affordable rent plans

Details of plans to introduce fixed-term tenancies at higher rents have met a negative response, with one Conservative council immediately ruling out ending lifetime tenancies.

Brighton and Hove issued a statement yesterday, shortly after details of the affordable rent programme were published, saying it would not end security of tenure for its tenants.

Under affordable rent, landlords would be able to charge up to 80 per cent of market rent, and tenancies could last as little as two years. Landlords will be expected to implement the new product if they want to access any of the £1.8 billion allocated for new development over the next four years.

Maria Caulfield, cabinet member for housing at Brighton Council, said: ‘We are committed to no change to security of tenure or succession rights for our council tenants and we will not introduce flexible tenancies in the city.’

Ms Caulfield said the authority would instead encourage tenants to downsize from larger homes when the time is right.

Shadow housing minister Alison Seabeck accused the government of failing to understand aspiration by allowing landlords to let homes with a minimum tenure of two years.

She said: ‘It can’t be fair that people who work hard and play by the rules are being told they may lose their home if they get a new job or get promoted at work.

‘At the same time, the Tory-led government wants to hike up rents for many new social housing tenants by thousands of pounds a year, to cover for their cuts in funding for new house building. 

‘Their new proposals not to cap higher rent levels at the same level as housing benefit caps could see social rents in London more than treble - but even that won’t fund the extra homes needed.’

The National Housing Federation questioned how the affordable rent reforms would tie in with housing benefit changes, and how effective they would be in low value housing areas.

It said plans to limit overall benefit payments to £26,000 a year would make it unlikely housing benefit would cover the 80 per cent rents. It also noted the new product would have little impact in low value areas where social rents are already near the 80 per cent level, limiting the potential for development.

However the umbrella body welcomed some ‘concessions’ in the framework document, including:

  • The retention of the current formula for setting rent increases until at least 2014/15
  • More flexibility around contracts, with no requirement for detailed agreements to be signed by 1 April
  • Confirmation that local authorities will play a key role in agreeing investment plans, but will not be able to veto them
  • Recognition of a continuing role for low-cost homeownership products.

Federation director Ruth Davison said: ‘We are disappointed that the government has not made any concessions on the issue of the benefit cap. We are also disappointed that it still looks as though the new model will fail to deliver the right number of new homes in low value areas.’

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