The future of social housing has never been promising and recent government proposals suggest no improvement.
A new ‘pay to stay’ clause has been entered into the forthcoming Housing Bill, which allows social landlords to charge tenants the local market rent if their household income is in excess of £30,000 outside of London and over £40,000 in London.
Families and individuals earning £30,000 outside of London will be expected to pay local market rate. This means paying the same price as those in the private sector. This will force many council tenants out of their homes by way of eviction on grounds of rent arrears. The other consequence is a sharp increase in the number of people found to be intentionally homeless. If someone is found to have left the home when they could have stayed, they are deemed intentionally homeless. This includes moving into a property knowing you cannot afford payments which is likely to be the case when and if this policy takes shape.
The policy also has significant repercussions for those tenants who just exceed the income bracket, leaving them in a desperate position. A study commissioned by the Local Government Association has predicted 214,000 social housing tenants could potentially be affected by this policy.
The policy implies that a household in receipt of £30,000 is home to ‘high-earners’. This essentially means a couple earning 15,000 each would be deemed as such by the Government. These households will significantly impacted by the policy. Furthermore, they will lack the incentive to work harder and secure pay rises. The irony being hard work would leave them worse off.
The end to subsidised rents for ‘high-earners’ will force thousands of people out of social housing who cannot afford to pay market rents. This would mean individuals would have to leave their local area in order to find affordable housing.
Social housing tenants paying market prices will not only result in tenants being worse of financially, they will also miss out on the stability and community that is offered by social housing. While private housing may have to be considered by higher earners, this type of housing comes with its own concerns. Private landlords are charging higher rents than ever before. A month’s rent can often be requested in advance in addition to a deposit. The financial constraints that come with private landlords are pressing.
The policy is scheduled to come into affect in April 2017 and is expected to save £245 million pounds a year. Such policies continue to demonstrate the government’s attempts to destroy the social housing sector in a bid to save money.
If you are homeless or threatened with homelessness our expert housing law team can assist you. You may be eligible for legal aid to help pay your solicitors costs. Contact our specialist housing law team for assistance, legal aid may be available to you to pay your legal fees.
By Iman Nauman, graduate paralegal in the housing law team