Social landlords are to be given the freedom to raise rents towards market levels and introduce time-limited tenancies, the government has announced.
Under plans in today’s comprehensive spending review, landlords will be able to set rents between social and market levels for new tenants. They will also be able to offer fixed-term tenancies rather than agreements for life.
In his speech to Parliament, chancellor George Osborne said new social tenants could be ‘offered intermediate rents at around 80 per cent of market rent’.
The CSR document is less explicit, stating: ‘Social landlords will be able to offer a growing proportion of new social tenants new intermediate rental contracts that are more flexible, at rent levels between current market and social rents.’
It adds: ‘The government wants to make social housing more responsive, flexible and fair so that more people can access social housing in ways that better reflect their needs.’
Mr Osborne said that the new flexibilities would allow 150,000 affordable homes to be built over the next four years, coupled with £4.4 billion of investment. This is a cut of around 50 per cent on current levels of investment.
Richard Parker, head of housing at Pricewaterhousecoopers, said: ‘The introduction of “flexible tenancy”, for people who move into council housing for the first time, represents a paradigm shift in housing policy. But it could backfire if it’s not supported by a new approach to housing allocations.
‘If social housing continues to be allocated to those in greatest need, the government will in the first instance be housing people that will find it hardest to improve their circumstances. Rather than creating flexible tenures, the government could end up reinforcing residualisation.’