Affordable rent homes may be earmarked for tenants not on benefits
Richer tenants to be targeted
Housing associations are considering only letting affordable rent properties to tenants who can afford to pay the rent without help from housing benefit, the Chartered Institute of Housing has warned.
The CIH made the warning in a submission to the Tenant Services Authority’s consultation on changing its tenancy standard to include the new model, which will see tenants charged up to 80 per cent of market rents to fund new home development.
Although ministers accept housing benefit will cover most of the increased rents, the report said associations were concerned such payments would be cut once the extent to which higher rents increased the benefit bill became clear.
The report said: ‘Proposals to introduce affordable rents could lead to an overall increase in housing benefit expenditure. This makes provision of social housing very vulnerable to future efforts by government to reduce the benefit bill.’
It added: ‘There is significant support in the sector for offering affordable rented property only to tenants who can pay the rent without housing benefit.’
Abi Davies, assistant director of policy and practice at CIH, said: ‘There is an assumption that housing benefit payments to the social sector will be treated the same as the private rented sector eventually.’
Ms Davies said lenders would refuse to finance to social landlords if the affordable rent model introduced any risk they could not pay it back.
Government figures show 68 per cent of social households have an annual income of less than £15,000.
The Building and Social Housing Foundation, an independent research body, has estimated affordable rent could add an extra £1 billion to the housing benefit bill each year. The Communities and Local Government department has yet to release its own impact assessment on affordable rent.
The chief executive of one housing association said lenders were nervous about further benefit cuts and was ‘modelling on how we can avoid that