Inside Housing has revealed that the coalition’s ‘Pay to Stay’ policy, if implemented, would make ‘Affordable Rent’ homes unviable in parts of 16 London boroughs.
Pay to Stay will give social landlords the right to charge tenants earning over £60,000 a year a full market rent. Yet figures obtained by Inside Housing from Hometrack show that rents in London are so high that tenants need an income of more than this to be able to pay even 63 per cent of market rents (the average level at which affordable rents are being set).
The report claims that 131,000 social homes across 16 London boroughs would be affordable only by those earning over £60,000 at average affordable rents. Most of these homes will currently have lower social rents but many may be converted to the higher rent regime in the coming years.
Housing minister Mark Prisk told delegates at the Chartered Institute of Housing conference in Manchester in June that housing associations bidding for grant will be expected to take a hard-nosed approach to relets:
“I expect the result to be a significant increase in the number of homes that are either converted to Affordable Rent or sold when they become vacant.”
Camden Council told Inside Housing it will not implement Pay to Stay, whereas Westminster Council says it supports the policy but may set the threshold higher than £60,000.
The Chair of the G15 group of London housing associations said:
“These figures show that the affordable rent regime is not working. Affordable rent is an intermediate product, not a social housing product.”