Affordable Rents explained
January 24th, 2012
The Coalition Government announced a series of cost saving plans in the 2010 Comprehensive Spending Review (CSR) – a Treasury-led process that allocates resources, based on the Government’s priorities, across all government departments.
The affordable housing budget, which housing associations use to build new homes, has been drastically reduced by approximately 48% – from £8.4 billion to £4.4 billion. The Government are looking to create 150,000 new properties on this budget over the next four years, through the Affordable Rents programme, to address the affordable homes shortage in England.
If the Trust, along with other housing associations want to continue building new homes, then higher rents have to be charged on some properties in order to fund them. The Government have announced that rents on new tenancies will be charged at 80% of local private market rents.
The Affordable Rent Programme
The Affordable Rents Programme will enable housing associations to offer individuals who are not able to afford adequate housing in the private market with an alternative to Social Rent.
The key differences between Affordable Rent and Social Rent are:
| ‘Social Rent’ properties | ‘Affordable Rent’ properties | |
| Rent Levels | Set according to a Government formula - typically at less than two fifths (40%) of market rent levels. | Set according to market conditions - up to four-fifths (80%) of market rent levels. |
| Length of tenancy | Lifetime tenancies: tenants can stay in the properties for as long as they want, providing they do not break the terms of the tenancy agreement. This could lead to eviction. | Flexible tenancies or fixed-term tenancies: these will be for a fixed term. Tenancies may be renewed at the end but this is subject to an assessment of need. |
Flexible Tenancies
The programme will offer shorter tenancies, which are a fixed term tenancy rather than a tenancy for life. The Trust will be offering a fixed term tenancy of six years, at a rate of up to 80% of local market rents on a selected number of properties.
The proposal is intended to make the housing system faster and more flexible allowing individuals on the waiting list and in overcrowded conditions, to be housed more quickly.
Who are they for?
The Flexible Tenancies will only be offered to new tenants only on a fixed-term tenancy. Existing tenants will not be affected, and will continue to have tenancies for life.
As an existing tenant, what happens if I need to move?
If you need to move, and the home you wish to move to is an Affordable Rent property, you will need to give up your tenancy for life. The same applies if you transfer to a different housing association.
When will flexible tenancies be introduced?
Changes are likely to come into effect from January 2012.
For more details on Flexible Tenancies click here or for further information please contact the Neighbourhood Services team on 01296 732600.
