More than 70,000 tenants face average rent rises of more than £1,000 a year under the government’s pay to stay policy aimed at ensuring supposedly high earners living in social housing are charged market rents.
Councils have warned that nearly one in 10 social tenants in London and the south-east can expect rent rises, with those living in the capital facing an average monthly rent rise of £132.
Under pay to stay, households with a combined income of £40,000 and above in London, and £31,000 in the rest of England, will be classified as high income tenants and subject to rent increases of 15p for every pound they earn above the high-income thresholds.
There are fears that many working families on median incomes will be unable to afford to stay in their home or find an affordable local alternative. Critics in the House of Lords savaged the policy, announced by the former chancellor George Osborne last year, as ill-thought-out and unfair.
The Local Government Association (LGA) said that the policy would be costly and bureaucratic to implement, stressful for affected families and would generate just £75m year for the Treasury, compared to original projections of £365m by 2017-18.
It said: Councils need to invest millions in new IT systems, hire new staff and write to more than a million social housing tenants to try and understand household income and approve individual tenant bills by January. This will be a difficult, lengthy and costly process for councils, and is likely to be unpopular with tenants and result in high levels of costly appeals and challenges.
The councillor Nick Forbes, senior vice-chair of the LGA, said: Pay to stay risks becoming an expensive distraction from our joint ambition to build more homes. We urge new government ministers to take this opportunity to allow councils to decide whether or not they will introduce pay to stay for their tenants and to keep the additional rent to invest in new and existing homes, as will be the case for housing association tenants.
Pay to stay was originally aimed at people with living circumstances similar to the late RMT union boss Bob Crow, who rented a council home despite earning more than £145,000 a year. Initially the plan was to target a small group of people on salaries above £60,000.
The Department for Communities and Local Government said 90% of social housing tenants would be unaffected by the policy.
A spokesman for the department said: It’s simply not fair that hard-working people are subsidising the lifestyles of those on higher than average incomes, including tens of thousands of households earning £50,000 or more.
Pay to stay better reflects tenants’ ability to pay while those who genuinely need support continue to receive it. It means households earning £32,000 would see rents rise by just a couple of pounds a week.
News Source TheGuardianNews