No 'real social homes' to be built over next five years
No ‘real social homes’ will be built during the next spending period, and new rules will ‘trap’ social tenants in welfare dependency, according to the National Housing Federation (Fed).
The organisation has made the claim against the backdrop of a vigorous argument between Labour, the Mayor of London and Number 10 with emotive language being used – such as ‘social cleansing’, and inferring the ethnic cleansing of Kosovo by the Mayor of London, Boris Johnson, and Labour.
The Fed claims Government’s decision to slash the housing budget by 63%, and pay for new low cost homes through massive rent increases, will not actually deliver the 155,000 social homes Grant Shapps has argued will be build.
This is because the Government plan to pay for the new homes through increased rents - at up to 80% of the local market rate.
For ministers to deliver the promised number of low cost homes, the new intermediate rents will need be charged to all tenants moving into newly built homes, and at least one in four tenants moving into existing social homes.
Also, tenants in newly-built homes will be on short-term tenancies – effectively meaning the end of lifetime tenure in homes being labelled as ‘social housing’.
The Fed says that the ‘new deal’ over housing does not allow housing associations to respond flexibly to local housing need, as they will be denied the freedom to set rents at an appropriate level and grant long-term tenures.
It also believes new intermediate rents will act as a ‘powerful disincentive to work’ - if social tenants get a job, much of their earnings will go to rent repayments. For example, if charged intermediate rent of up to £340 per week for a three bedroom property, a tenant would have to earn at least £54,000 to get off housing benefit.
The Fed also claimed the new model creates a ‘lottery’ for social tenants. Some will access homes at the traditional social rent levels, whereas others will have to pay rents at 80% market rate.
Federation chief executive David Orr said: ‘Under this model no new real social homes will be built over the course of this Parliament beyond those already in the pipeline.
'The new funding model for low cost housing is predicated on high rents, instead of on an adequate capital budget.
'Housing associations had wanted the flexibility to build a mix of homes at intermediate rents and social rents – but now they have an imposed solution which replaces that mix with high-cost, near-market prices across the board.
'Because it is based on near-market rents, the new funding model will trap thousands of tenants in welfare dependency.
http://www.localgov.co.uk/index.cfm?method=news.detail&id=92966
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