Saturday, 18 April 2015

Housing bodies dismiss ‘pay to stay’

Housing groups have poured cold water on government plans to charge higher earning social tenants more rent.

In responses to a Communities and Local Government department consultation on ‘pay to stay’, housing organisations suggest the plans are unworkable and call for a wider debate on rent setting across the affordable housing sector.

The CLG published its consultation in June, and responses were due by yesterday. It suggested social tenants earning more than a specified income should be forced to pay more rent.

The consultation asked whether the level should be set at £60,000, £80,000 or £100,000, and said rents would be increased to either 80 per cent of market rent in the short term, and full market rent if the necessary legislation was introduced.

The Chartered Institute of Housing questioned whether the policy should be pursued at all. Its consultation response says it would create ‘devastating costs for social housing providers’ and put them in a ‘precarious position ethically and in relation to their charitable status’.

The National Housing Federation also questioned the fundamental concept behind the policy. ‘We are concerned that any benefit derived from charging higher rents would not compensate for the cost and burden of implementing and administering this change,’ it states.

Campbell Robb, chief executive of Shelter, said: ‘At face value the principle of high earners paying more for social housing makes a lot of sense. However in reality it would need a hugely complex and bureaucratic system that international experience suggests would cost more to administer than it would save.’

Both the NHF and CIH suggested a more wide-ranging debate about rent setting in the sector would be needed if the government wanted to pursue the ‘pay to stay’ policy.

The Council of Mortgage Lenders also raised the issue of flexible rents, and the impact this could have on lender confidence in the sector.

Its response states: ‘We believe flexible rent needs to be fully explored in the sector to ensure that, if taken forward, it is developed in a way which is workable both for landlords and tenants, and sufficiently safeguards lender and investor interests in the sector.’

Readers' comments (24)

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

Related

Articles

Resources

  • Job interviews in housing: outside the box

    20 August 2014

    Some social landlords believe a traditional interview is not the way to find the best candidate for the job. Simon Brandon reports on how Bromford Group is using role-playing games to get to know prospective employees

CIH Delegate