Flexible Tenancies / Affordable Rents – more info

Yesterday Grant Shapps announced more details of how Flexible Tenancies and Affordable Rents will work.

The idea behind ‘Affordable Rents’ is to increase the social housing rent to 80% of the market rent to fund development. This raised the question how the Government will ensure the additional cash will be spent on development rather than, say, Duchy Orgininal biscuits (which are very tasty!).

Sensibly, Housing Associations will only be able to use the Affordable Rent after cutting a development deal with the Homes and Communities Agency (HCA) (press release).

Oddly enough, in the same press release we get:

“The Government has embarked on a radical programme to shift power from Westminster to councils and communities, including a fundamental reform of social housing. The proposals include giving greater flexibility to both council and housing association landlords over the types of tenure they can offer to new social housing tenants.”

While the entire subject of the press release is how the Government is going to centrally control the use of Affordable Rents. Ho hmmm.

They seem to have forgotten about councils. I wonder how they’ll centrally control their use of the new locally flexible arrangements?

Just for fun the Government seems to be leaving it entirely up to an HA to determine what the local market rent would be:

“The association’s calculation of the market rent would need to be based on a residential lettings estimate for a property of the appropriate size, condition and area.”

So we now have market rents being determined by the Housing Benefits team (for the Local Housing Allowance rates), Rent Assessment Committees (for legal purposes) and HAs. All using different rules. Fun fun fun!

Meanwhile Inside Housing reckons the HCA is going back to the old mass bidding approach for development (article). This cuts directly against the HCAs own report from a couple of days ago stressing the need for more vulnerable and older persons housing. If they give all the development cash to a few big organisations they won’t see much supported development out of it.

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