Social housing tenants could be ‘priced out’ of homes, research warns

According to a study commissioned by the Local Government Association (LGA), a number of families could be priced out of their council accommodation and will be unable to afford alternative housing in the same area.

The research follows the news that subsidised rents for households earning more than £30-40,000 per year in London will be scrapped in April 2017. Social housing tenants will be asked to pay rent at or near market rates.

While government ministers have said it ‘better reflects people’s ability to pay’, the LGA argues it would have a negative effect on hard-working families.

The Department for Communities and Local Government said that it is ‘not fair that hard-working people are subsidising the lifestyles of those on higher than average incomes, to the tune of £3,500 per year’.

The study found that almost 60,000 households in England will be unable to afford rents at the market rate or take advantage of the Right-to-Buy scheme.

Housing Minister Brandon Lewis told BBC Radio 5 live's Pienaar's Politics that people who could afford to pay more in rent ‘should do so’ - but that it would be graded, so that those on lower incomes would not have to pay full market rates.

He explained: ”We have always said we would consider carefully how much more people pay as they move through the pay scales, once they get over £30,000.”

Lewis added that the government intended to ‘listen to what comes in before we make a final decision in the period ahead of us’.

However, Councillor Peter Box, housing spokesman at the LGA, said: "Many social housing tenants across the country will be unable to afford market rents or take up the offer to buy their council home under this policy.

"A couple with three children, earning £15,000 each a year, cannot be defined as high income. Pay to stay needs to be voluntary for councils - as it will be for housing associations.

"This flexibility is essential to allow us to protect social housing tenants and avoid the unintended consequence of hard-working families being penalised, people being disincentivised to work and earn more and key workers, such as nurses, teachers or social workers, having to move out of their local area."