Friday, 31 October 2014

High-earners will 'pay to stay' in social housing

Landlords will be allowed to increase rents for high-earning social housing tenants in order to fund the building of new homes, under new plans announced today.

The government’s housing strategy pledges to protect the rights of existing social housing tenants, but says this should not prevent landlords ‘tackling the small minority of tenants who abuse their social housing, this includes households earning high incomes who continue to occupy subsidised housing.’  

The government has suggested the ‘pay to stay’ proposals, which will be subject to consultation, could apply to the estimated 6,000 social housing tenants earning more than £100,000 a year.

‘The consultation will consider how best to configure the scheme and ensure that it is appropriately targeted,’ the document says.

The document also pledges to strengthen powers aimed at tackling tenancy fraud, this would require primary legislation - which the government said it would launch a consultation on shortly.

Readers' comments (29)

  • Rick Campbell

    I take it then, that as the rents rise it will become cheaper to buy -- resulting in less Social Housing ... I cannot for the life of me figure out how a whopping great discount will produce sufficent funds to build on a one-for-one basis.

    Maybe someone will come up with a plain language and truthful explanation.

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  • F451

    Plan A - sell as many of the social homes as you can
    Plan B - force those who can buy to buy, in order to sell as many of the social homes as you can
    Plan C - sell any remaining social homes anyway that you can
    Plan 1 - do not build any new social homes, only build those that can fund market borrowing - i.e. those that create a new sub-prime housing market with the government underwriting the risk and the investors gaining the benefits.

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  • Joe Halewood

    Rick - you are assuming that sufficient funds will be generated from RTB receipts to cover the cost of a new property.

    Try page 27 and section [64] it says that from RTB sales "...expected receipts will provide a sufficient CONTRIBUTION to the cost of replacement homes."

    That language, and we must assume it is very carefully worded, doesnt say RTB sales will generate enough to build a new home; rather it will generate a CONTRIBUTION to that build cost. Very different thing indeed.

    Also note that it says EXPECTED receipts (so central government cannot be sure) and that the exact level of RTB2 discounts are not set in stone either as these will be subject to a consultation paper issued next month (so early march 2012 before consultation ends).

    Then of course there is the delay between any RTB sale and the building of a new replaement.

    Further, there is still the possibility that a new home build fro each RTB sale could be a replacement bedsit for a 4 bed house (ie 1 for 1 doesnt have to be like-for-like)

    Rent rises - Yes for council tennts and significant ones too - See page 25 section [46] it says council rents will converage (ie rise) to assocition rents by 2015. Usign current HB in-payment figures as a good guide this is a rise from £70.92 to £80.29. This is a 13.2% ADDITIONAL rise over and above the year on year rise.

    That additional rise alone will add £715m per year to the HB bill.

    It also means that council tenants will have to pay an additional increase of £855m over next 3 years on top of year on year rent rises

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  • How exactly are higher earners abusing social housing? If they have been truthful and adhered to their tenancy agreement, surely they are a financial positive in social housing? I think the money wasted on setting up some fancy targeting of such individuals will outstrip anything that can be made out of them.

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  • I have not got two ha'pennys to rub together, but, I would ask the same question as Leigh Andrews.

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  • Rick Campbell

    Joe -- quite so.

    Leigh -- quite so.

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  • Alpha One

    Leigh, so you think it is fine for Bob Crow and Frank Field, to name just two (oh and Baroness Udin for a third), all earning more than £100k a year, plus bonuses, pensions, cars, expenses and a wealth of other toys, should be allowed to keep their social property on a social rent.

    How is it fair that person earn £100k a year is allowed to remain paying a social rent?

    That person was provided with a social home when they needed, they now no longer need the subsidised element of that home, why shouldn't they pay their fair share?

    What I really can't figure out with you socialist types is that you harp on about people paying their fair share, taxes for the rich, taxes for the bankers, make everyone earn the same. However, when it comes to one of those rich people living in a social home, you'll defend their right to stay and take money from the tax payer till the end of time. It rather double standards.

    More to the point, why is only the Conservatives (you know those evil, vile creatures that eat babies and cast the poor into pits for consumption by rabid animals) who think it isn't right for rich people to be receiving state aid?

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  • F451

    If the rich can opt out of state aid then they have less moral duty to pay in to fund that aid for others. As the pot decreases the value of the aid is undermined and then there is no point in providing the aid at all.

    What income levels do you propose people should have their state aid removed for any of the following Alpha:

    Social Housing
    Low cost home ownsership
    Mortgage support
    Pension contribution tax relief
    Insurance contribution tax deduction
    A&E health care
    Primary health care
    Mental health care
    Dentistry
    Optical health
    Aural health
    General practice health care
    Nursery education
    Primary education
    Secondary education
    Tiertiary eduction
    Higher education
    Adult education
    Special needs education
    Freight haulage
    Rail travel
    Road travel and highways
    Air ports and travel
    Sea ports and travel
    River use
    Water cleansing
    Sport

    The list can go on and on Alpha - if you accept means testing to benefit from one you will end up with means testing for all, and provision no longer efficient as 'the market' will demand the optimum payment from the many in order to maximise profit.

    How many of these items would you be prepared to pay full cost for out of your own current salary?

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  • @ Joe

    Do you think Joe that they are going to have everyone forming an orderly queue for tents and caravans? Problem solved. Everyone off to Dale Farm.

    Still can't get my head round how 'contribution' fits with the 1 for 1 Grant Schnapps and Call me Dave were spouting about when they announced this policy.

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  • winnie davies

    The high earners will just buy the properties with a reduced discount. like before children will buy there parents Council House, then look for a one-bed roomed property for their parents "Uncle/ Aunts exe
    Especially as most of these houses have had extensive works carried out.
    I am very please that they have found some more money to fund this project
    and we are not as poor as I thought we were.

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