'Pay to stay' measure slammed by landlords

Social landlords condemned the policy with Mick Sweeney, chief executive of One Housing Group, accusing the government of believing social housing tenants are not ‘full citizens’.

In today’s Budget statement, the chancellor announced plans to make all tenants living in social rented properties with household incomes of more than £30,000 (£40,000 in London) pay market rent. Social landlords are already able to voluntarily charge earners of £60,000 full market rent.

Local authorities will have to pay the extra cash raised to the Treasury. Housing associations will be able to keep the money from the measure, dubbed ‘pay to stay’. Around 300,000 renters are expected to be hit by the measure.

Mr Osborne said: ‘The benefits system should not support lifestyles and rents that are not available to the taxpayers who pay for that system.

‘It’s not fair that families earning over £40,000 in London, or £30,000 elsewhere, should have their rents subsidised by other working people.’

The Budget document said allowing associations to keep the extra rent will ‘raise up to hundreds of millions of pounds in additional rental income’.

Social landlords say relatively few of their households earn £30,000 and £40,000. One Housing, which operates across London, estimates that even their highest-earning tenants earn just £15,000 on average.

Mr Sweeney said: ‘Margaret Thatcher used to say if you go to work on a bus, there’s something wrong with you. I think the current government says if you live in affordable housing either in a local authority or housing association, then you’re not a full citizen.

‘It’s a very dismissive and arrogant approach and that’s why I think [ministers] are doing all they can to dismantle local authority and housing association affordable rented housing.’

Tony Stacey, chair of Placeshapers, which represents 100 housing associations, said the policy ran contrary to the government’s attempts to get people into better-paid work because a higher-paid job could now mean higher rent or eviction.

‘It just seems a bit perverse compared to government’s other policy of making work pay,’ he said.

Paul Hackett, chief executive of Amicus Horizon, highlighted that few landlords hold data on their tenants’ earnings. ‘We just don’t have that information so I think if it were to work we would need help from the tax office,’ he said. The government said it will publish more detail about how the scheme will work in a consultation paper ‘in due course’.