Pay to stay

The Government believes that it is not right for high income families to be paying low social housing rent when they could afford to pay more or their home could be used by someone in greater need.

They are presently considering giving the option to social landlords to charge a 'fair rent' to high earning tenants.  They say the additional income could be used for new affordable housing to increase the overall housing supply.  

This is presently out for consultation.  Do you feel that there should be differing rent levels for the same property type and service?

Give us your views on the poll on our home page.

18.7.12

On 10th September 2012 the Fed carried out a small survey to seek tenants views on the issue and 70% felt that high earners should not pay a higher rent.

The consultation ends today the 12th September and we will be sending our views forward.

The proposed threshold for high earners is £60,000 so it will affect a relatively small number of people.  We are concerned that if this 'Pay to Stay' idea is introduced it will push high earners into a decision as to stay and pay more or exercise the Right to Buy, which may well entitle them to up to 75% discount on their purchase price. 

It is thought therefore that the present economic subsidy of staying put and paying the same rent could well be up to one third lower than if they were subsidised through exercising their Right to Buy and receiving a discount.

Pay to stay 2015

The Govt are now consulting on proposals for all Council and Housing Association tenants to be subject to increased rents should their income rise above a certain level.  This is where household income is £40,000 or above in London or £30,000 or above elsewhere.  Household income is spouses or partners joint income.  So a couple outside London both earning £15,000 or slightly above could see their rent rise to market rent levels.  The Govt are considering tapers being introduced initially.  We as a  Fed are concerned that the proposed household income levels are low and that some tenants may face hardship with high rent rises.  Also incomes vary with zero contracts and redundancies.  Levels of rent will be based on income for the previous year, so a family on a good income could find that the following year their rent would increase to market rent and yet their income could have drasticially reduced.  We are also concerned that the management of the scheme will be very time consuming and expensive for landlords to administer.  Furthermore additional income raised by Local Authorities is to be returned to Govt.  The consultation is due to finish in November 2015.

Update on Pay to Stay March 2016

Pay to stay is now planned to be introduced from April 2017.  The policy is voluntary for Housing Associations but compulsory for Local Authorities.  Councils will have to pay the additional income to the Treasury although they will be able to retain reasonable administarative costs.  Whilst the linits will be £30,000 outside London and £40,000 within London it looks like there will be a tapering system put in place, so only households on over £50,000 per annum will have to pay full market rent.

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