In this section:

ARCH annual report

informationImage

The ARCH annual report for 2015-16 is now available to view.

 

Download it here.

The Welfare Reform & Work Bill 22/07/2015

24/2015

 

Key points

 

  • The Welfare Reform & Work Bill, which was published on 8 July, includes new powers to require local authorities and other registered providers to reduce rents by 1% a year for four years beginning 2016/17, as announced in the Budget.
  • Landlords would be required to reduce the actual rent payable by each tenant by 1% each year, so the requirement applies regardless of whether an individual tenant's rent is above or below the target rent for the property, or whether the property is let at a social or affordable rent.
  • The Secretary of State would be able to make regulations exempting particular tenants, tenancies or accommodation from the requirement to reduce rents; regulations are likely to be made to enable tenants with household incomes above £30,000 (£40,000 in London) to be charged market or near market rents.
  • The Secretary of State would be able to issue a direction exempting a local authority wholly or partially from the requirement to reduce rents if he considered this would cause serious financial difficulties.
  • The Bill states that the rent reduction requirement would apply in England and Wales, but DCLG has said that it will not in practice apply in Wales.

 

Background

 

The Welfare Reform and Work Bill was published on 9 July, and is scheduled to have its second reading in the House of Commons on Tuesday 20 July. It includes provisions to reduce the benefit cap and reform tax credit, as announced in the Budget, as well as measures to require councils and housing associations to cut rents.

 

Clause 19 of the Bill requires registered providers of social housing to secure that the amount of rent payable by each tenant is reduced by 1% compared with the previous year in 2016/17, 2017/18, 2018/19 and 2019/20. New tenants must be charged the same rent in each of these years as would have applied had they become tenants before 8 July 2015.

 

Clause 20 allows the Secretary of State to make regulations excepting particular tenants, tenancies or accommodation from the rent reductions. These regulations may include provisions relating to tenants whose income, or whose household's income exceeds a prescribed amount.

 

Clause 21 allows the Secretary of State to issue a direction exempting a local authority from the requirement to cut rents or allowing a lesser reduction if he considers that the authority would otherwise be "unable to avoid serious financial difficulties". He may also publish a document setting out how he thinks a local authority can avoid getting into serious financial difficulties. "Serious financial difficulties" are not further defined in the Bill.

 

Clause 24 provides that the rent reductions should apply to England and Wales, but not Scotland or Northern Ireland.

 

The full text of the Bill as published is available here.

Like emailLink
ARCH Member Comments 1 people like this

Housemark