The London Borough of Hammersmith and Fulham explain how they wish to use the council housing system (PDF) as a “housing ladder of opportunity” for those who ultimately wish to – and are likely to be able to afford to – own their own homes in the borough.
Under the new powers of the Localism Act almost all new housing made available in the borough will be subject to fixed term five year tenancies. Council and housing associations can now also set rents at 80% of the local market value as part of the misnamed ‘affordable rents’ scheme. This means social housing will no longer be an option for tenants on even modest incomes in the borough without Housing Benefits to help meet rent payments.
In London rents must not exceed the caps set for housing benefits under Universal Credit. However high property prices in London mean that councils and housing associations could soon be charging up to £250 a week for a one bedroom flat. Whilst this will not apply to existing residents, in Hammersmith and Fulham social housing providers have been instructed that up to 50% of properties re-let after tenants move out should be switched to ‘affordable’ rents.
The London Mayor’s housing strategy suggests social housing rents should be no more than 40% of average incomes. Despite this Hammersmith and Fulham are urging social housing providers to charge as much as they can get away with: “From April 2013, the Council is adopting the following approach to Affordable Rents in the borough: Private Registered Providers (PRPs) will be expected to maximise the rent that can be charged for new affordable rent schemes and for up to 50% of homes that are re-let.”
Research carried out by neighbouring borough Kensington & Chelsea (PDF) suggests a tenant would need an income of £46,429 a year to be able to afford the ‘affordable’ rent on a one bedroom flat which has been set at the £250 cap.
And here is where it all comes crashing down as Hammersmith & Fulham’s housing strategy is revealed to be a bit – to use a technical DWP term – mental. Tory Councillors may wish to turn social housing into what will be little more than over-priced starter homes for latte slurping young professionals. But they also can’t quite help their swivel eyes popping out in fury at the thought of people on decent incomes being given any form of local authority managed housing. Many of them are no doubt landlords after all.
So despite a tenant needing to earn £46,429 annually just to be able to pay the rent, social housing tenancies will no longer be available to those earning a gross income of over £40,200 for all but larger properties (PDF). In other words a working couple, each on just over £20,000 per year, will now be too rich to rent a council flat they can’t afford.
Families needing three rooms or more will still qualify if their income is up £61,400 as long as they have less than £4000 in the bank. Council tenants on Hammersmith & Fulham’s housing ladder of opportunity will be terrified out of saving for a deposit on a mortgage in case that money is used against them to force them out of their homes at the end of their fixed tenancy.
The borough have said they will prioritise working tenants, so it is unlikely to be unemployed, unwell or disabled people who will be offered these new tenancies. These groups will be shunted into other boroughs or out of London completely. Should they qualify for assistance under homelessness legislation they may be placed in the Orwellian named “long term temporary accommodation” which now appears to actually be permanent, unlike the Council’s social housing. A lifetime in hostels or B&Bs seems to be the most likely outcome for those with least that the borough doesn’t manage to forcibly re-locate.
For those lucky enough to squeeze into the eligibility for social housing – which will mean those working, but on a low income – it will be Housing Benefits which will pay most of their rent. Should their income rise to a level at which they can afford to pay their rent without housing benefits, then they will be promptly kicked out of their home when their five year tenancy expires.
It will not just be those who get a pay rise who will lose their homes as the short term tenancies expire. New tenancies may not be granted if the tenant has struggled with rent arrears, has been convicted of certain offences or accused of anti-social, illegal, or even ‘immoral’ behaviour. In some cases tenants could be thrown out if they have not worked for 9 out of the preceding 12 months. It is unclear where those who do not have tenancies renewed are expected to go. For some this will mean the even more expensive private sector. For others it is likely to mean the streets. The end result of fixed term tenancies will mean that the housing benefit bill and the number of homeless people will both soar. Contempt for the most marginalised, not rational economic planning, is behind Hammersmith and Fulham’s housing strategy which will end up costing us all a fortune.
It’s hardly surprising attempts to marketise and profit from public services are handled so ineptly by Tory Councils. People who are good at business go into business and make lots of money. People who are shit at business, but share the same greedy ethics, end up being Tory Councillors. It is also unsurprising that internet con man and get rich quick merchant Grant Shapps was Housing Minister when the Localism Act was being drawn up.
From ministers down to Tory councillors, housing policy is now managed by chinless and charmless Del Boys whose crazy money grabbing schemes are set to descend into ever more predictable and tragic farces. Unfortunately this is no comedy show. If Trotters Independent Trading had been run like Hammersmith & Fulham Council then Uncle Albert would be sleeping in a piss-stained cardboard box whilst Rodney was out looting batteries from Poundland to sell for crack.
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