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Another fine mess… Matthew Warburton - 17/08/2012

LaurelAndHardyBack in December 2000, twelve years seemed like plenty of time in which to deliver a consistent approach to rent-setting for social housing.  The Government's policy statement of that year, "The Way forward for Housing" proposed that the principles behind rent-setting should be fair and easy to understand, with a closer relationship with the qualities tenants value in properties, and that unjustifiable differences between local authority and housing association rents should be removed.  

 

Hard to disagree.  And, as national housing policy explored the implications of a more diverse social housing sector, with councils asked to choose among three options for the future ownership and management of their housing stock, it seemed only fair that tenants should pay rents based on the quality of their accommodation, irrespective of the landlord they paid them to. 

 

The implication was that most council rents would need to rise faster than inflation to converge with housing association rents, but not too much faster so that annual rent increases remained affordable. 

 

2012, it was originally expected, would be the year in which full convergence would be achieved.  And here we are; but convergence is not even close to being delivered.  Caps on the rent increases councils can charge on individual tenanted properties defer convergent rents for many tenants far into the future. 

 

More significantly, the government now has other concerns uppermost in its mind.  A consistent approach to rents in social housing was far down the list of priorities when the government and HCA came up with affordable rents - the dominant objective was to squeeze as many new homes as possible from a declining pool of grant.   Surely, one can hear them thinking, housing associations would be able to find deserving tenants able and willing to pay a bit more for these homes, particularly since HB would remain available?

 

What was implicit in the policy on affordable rents has been pulled centre stage in the "Pay to Stay" consultation

 

Rents, the government is now saying, should not just depend on what tenants get, but on what they can afford to pay.  The Pay to Stay proposals raise difficult practical issues that will be explored in the ARCH response to the consultation.  But the new principle being invoked by the government has wider implications than the few thousand tenants with incomes high enough to be affected by these proposals.  It signals that the current government does not accept the principles underlying the last government's attempt at a consistent rents policy, but equally, shows that it does not as yet have a consistent policy with which to replace it.

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