HCA restricts affordable rent re-lets following benefit bill concerns
The government has banned some social landlords from converting re-lets into its new affordable rent product because of the impact it could have on the housing benefit bill.
The Homes and Communities Agency has told landlords which had their bids for development funding rejected they would be unable to convert empty social homes into ‘affordable rent’ properties because it would inflate the housing benefit budget.
An HCA spokesperson said: ‘The conversions under the programme have been fully costed in terms of impact on the benefit bill. The government does not want further uncontrolled conversions.’
However, the agency said failed bidders could charge affordable rents, at up to 80 per cent of market rates, on new homes built without grant.
Midlands-based Jephson Housing Association Group bid unsuccessfully as part of a consortium with Selwood Housing, for £57 million under the scheme to build 2,248 homes.
Bob Strachan, JHAG chief executive, said: ‘It is a step in the right direction as we will be able to provide more homes than if we had to use social rents, although it would have been nice to use re-lets as well.’
An impact assessment published by the Communities and Local Government Department in June estimated the move to affordable rents will add up to £1.3 billion to the benefits bill over 30 years.
The HCA revealed names of 146 bidders allocated a slice of the £1.8 billion for new homes on 14 July. It also said 48 bids were rejected or withdrawn.
The HCA previously said landlords could only let homes at up to 80 per cent of market rates if they sign an agreement with the agency, leading landlords to assume, incorrectly, that they could not build affordable rent homes outside the programme.
