Sunday, 23 October 2016

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.’

Readers' comments (15)

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up



  • Minister criticised for response to rent cut question

    2 August 2016

    A Labour peer has blasted a minister’s response to a parliamentary question about the impact of the 1% social housing rent cut as “completely unsatisfactory”.

  • Moody's: 'Brexit could be negative for associations'

    14 June 2016

    A ratings agency has issued fresh warnings about the impact on housing associations if the UK votes to leave the European Union, as a new poll shows a six-point lead for Leave.

  • MPs to probe ministers on ONS response

    12 November 2015

    A parliamentary inquiry will press ministers on whether they are willing to water down proposed reforms to ensure housing associations are taken back off the public balance sheet.

  • NI landlord outlook 'negative'

    11 November 2015

    A Northern Irish housing association could face a credit rating downgrade over its plans to scale up borrowing to more than 20 times its net earnings.

  • Moody's: Response to ONS decision 'credit negative'

    3 November 2015

    Cutting regulatory oversight of housing associations in order to overturn the decision that they are public sector bodies would be “credit negative”, according to rating agency Moody’s.

IH Subscription