You are viewing 1 of your 1 free articles
Sovereign scraps conversions to affordable rent
An association has stopped converting empty properties to higher ‘affordable’ rents, after they were found to be out of reach of its poorest tenants.
In a ‘statement of intent’ Sovereign Housing Association’s last week said it will end conversions on the grounds some tenants were being pushed into benefit dependency.
Under the coalition’s affordable rent model, social landlords can charge up to 80% of market rent on new-build properties developed using government funding to compensate for cuts to the development grant since 2011.
Landlords participating in both the Homes and Communities Agency’s 2011-15 and 2015-18 programme have also been encouraged to convert empty social rented properties to the higher affordable rents to fund development.
The 37,000-home south and south west-based association, had converted 350 vacant socially rented homes to affordable rents before taking the decision to stop.
Heather Bowman, housing and communities director at Sovereign, said: ‘For a number of tenants on low-wage employment, affordable rent isn’t affordable and it pushes even median earners into benefit dependency.
‘Our board has made a clear statement of intent: social rent is key.’
it carried out research, which was published in January, showed a two-bedroom home in Basingstoke was let at an affordable rent of £147 a week, whereas its social rent was £106 a week.
It found that lone parents in particular would not be able to meet their housing costs without sustantial support from benefits.
In its prospectus for the 2015-18 funding round, the Homes and Communities Agency (HCA) said conversions to affordable rent were ‘a crucial element in generating additional financial capacity’.
Sovereign, which is building 750 homes a year outside the HCA programme, bid for an initial £5.2m of grant to build 135 homes under the 2015-18 programme. This is down from the £31m for 1,856 homes that it received under the previous 2011-15 funding round.
Ms Bowman said Sovereign had been clear when making its bid that it would not be using conversions as a means of funding.
Fiona MacGregor, director of programmes at the HCA, said: ‘The vast majority of providers receiving an initial allocation under the 2015-18 funding round have conversions in their programmes.
‘Our main interest is in ensuring that bids continue to offer value for money.’
