More questions than answers

Published by Anne Rowlands on Tuesday, May 22nd, 2012 at 11:56 am

According to reports, the Government will start a consultation in June that could eventually see social housing tenants on high incomes being charged more rent.

The ‘pay to stay’ scheme would allow landlords to charge higher rents to households earning £60,000 per year or more.

Whilst in theory this appears to be a sensible idea, like many recent Government ideas there doesn’t seem to have been much thought given to how this would be implemented and it certainly leaves you with more questions than answers, namely:

Would this only apply to new tenants as current tenants would have the safety of their tenancy agreement to fall back on?

For example, people on Assured Tenancies can only have their rents increased once a year, by the Retail Price Index, plus 0.5%, whilst those on Secured Tenancies have any rent increases decided by an independent Rents Officer.

Would you have to means test every social housing tenant in England?

Currently people are just required to state they can pay their rent and don’t have to disclose financial details, so if this was changed this would cost a lot to implement.

What counts as income?

Households may have a basic wage of say £40,000 a year but with company cars, private pensions and other ‘perks’ this may take them over the £60,000 threshold, so it will have to be made clear from the outset what is being taken into account when setting rents for higher earners.

Will there be any regional variation in the salary limit?

If you are living in London or even in popular city centre areas in cities like Newcastle, York and Leeds, people may struggle to pay higher rents because £60,000 will not go very far when you deduct other expenses.

What happens if a high earner becomes unemployed?

In today’s economic climate, unemployment is always a risk so someone may lose their social housing property due to their high income but then suddenly be a in a position where they need it again. It also doesn’t seem to take into account people, the self-employed in particular, whose incomes change from year-to-year.

I could go on with more questions, but I think the biggest problem the Government would need to address is how this initiative may increase social polarisation. For some time now the stigma of living in social housing has disappeared. Communities have become balanced with a range of people from different backgrounds, but this appears to signal a return to the sink estates.

The basic problem is there is not enough housing at rents people can afford so I would suggest the answer is building more homes, rather than increasing the financial burden on people.