The emergency budget sees Osborne tell social landlords to increase the rent for the London social tenant by £8,679 per year and in the regions charge the working social tenant £3, 207 per year more in rent.
- The average London social rent of £132 pw would increase to £298
- The average regional social rent of £92 pw would increase to £154
This policy is called Pay (MORE) to Stay and means the social tenant CANNOT TRUST the social landlord who becomes your de facto enemy.
- If you landlord is a council this additional rent Osborne collects for the government.
- If your landlord is a housing association then the HA keeps that extra rent for themselves.
So the HA landlord is the greater tenant enemy with a real incentive to increase the social rent you pay now by 67% in the regions – the extra £3,207 per year above – and to increase it by 125% – the extra £8,679 per year – if you are a London tenant.
If the social landlord wants to find out your household income which is the basis of this pay MORE to Stay policy then tell them as nicely as you can to go away and especially if they are a housing association as they have a much greater incentive to collect this than a council landlord.
The above is the substance of this policy and probably as much as most will read and it DOES MEAN THE TENANT CANNOT AFFORD TO TRUST THE SOCIAL LANDLORD which has other significant consequences and it is time to look at this policy in much greater detail
The emergency budget emphasised and enhanced the social landlord as the tenant’s enemy and (a) while it is engineered government policy to force that tenant view; (b) the tenant has NO CHOICE but to see social landlords as the enemy and especially if the landlord is a housing association.
This is incredibly dirty and incredibly clever politics from the government – the two do go hand in hand – and will create huge problems for all involved in social housing and the social housing mode itself. It DOES mean that the tenant has to view the social landlords as the enemy and that the social landlord has to recognise and accept that.
The emergency budget is a seminal moment in social housing and in essence the social tenant has to view all social landlords as cynically and pragmatically as the private tenant views the private landlord.
The TENANT CANNOT TRUST THE SOCIAL LANDLORD is what the emergency budget means and both social tenant and social landlord need to get used to that however distasteful they find it or want to disagree with it because it is the unfortunate reality.
It is deliberately engineered by government as part of a divide and conquer strategy to set social tenant against social landlord in my view, yet even if I am wrong and/or I am giving the Tories too much Machiavellian cleverness, this IS the reality so tenant and landlord have to get on with it.
The government strategy of social landlord as the tenant enemy
This really began in the first 2015 budget with the announcement of RTB2 – the right of HA tenants to buy their home on the same basis as RTB1 allowed council tenants. Cue HA apoplexy at RTB2 and note well it came less than 24 hours after the National Housing Federation’s Homes for Britain (HfB) rally and campaign that even the NHF themselves now admit was the Pollyanna principle writ large.
Social landlords were caught on the hop with RTB2 and the government then played the ace in the pack that HAs arguing against and denying HA tenants the right to become part of the great property-owning democracy was a denial of aspiration. Game, set and match in political and principle terms regardless of how practical or nor RTB2 may be to implement.
The Chancellor himself has admitted the Tories did not expect an outright general election majority which meant post GE the Tories had to develop formal RTB2 policy and formal policy for all the other housing and ‘welfare’ kites flown before the election. This is and was the emergency budget of last week which was scant of any detail with regard to RTB2 (and other policies) and confirms the ‘emergency’ part of the emergency part which the Tories wish to call the Summer Budget in the hope everyone forgets why it was an emergency.
The emergency budget took the social landlord as tenant strategy enemy much further with pay to stay and also took the social landlord as inefficient moaning dinosaurs strategy first outlined by Shapps as the lazy consensus posit even greater still and also massively increased the often simpler to understand Tory strategy of we don’t want social housing per se much deeper.
Pay to Stay has had very little discussion since the budget and is more aptly called Pay MORE to Stay as (a) if makes social tenants pay more in rent and of course, (b) all tenants now pay to stay else they are evicted and that has always been the case.
Making any social tenant pay MORE to stay is an attack on the social housing model itself and is the Tory government saying that social housing has been wrongly allocated to tenants who work and social housing should only be – as a matter of politically spun principle – given to households earning less than £30,000 per year in the regions and to households earning £40,000 or more in London.
Above those two figures which form the basis of Pay MORE to Stay, the working household should NOT expect to receive subsidised housing and should NOT expect all other hardworking taxpayers to subsidise. That is a clear and very significant message the government is putting out there and as surely as night follows day the social housing sector will (a) not see that or (b) if they do they won’t be able to change that public-facing perception as the government knows the social housing sector never adopt any public-facing strategies because they are frankly stupid and negligent.
Yet the CRITICAL issue here for social tenants and why they MUST view the social landlord as the ENEMY in all matters and at all times is the Pay MORE to Stay (PMS) policy which needs to be looked at in huge detail and linking in with another newly introduced emergency budget policy with a similar misnomer for a title in the “living wage.”
Pay MORE to Stay – £30k pa regions; £40k pa London
If the social tenant household has an income of more than £30,000 per year then the rent they pay now, social rent or SR, will increase to market rent or MR is the policy principle.
To be £7.20 in 2016 rising to £9.00 per hour by 2020 – £1.80 over 4 years or 45p more per year. It replaces the national minimum wage to all intents and purposes.
Put the two together and we see in 2017 a purported ‘living’ wage of £7.65 per hour which for the average 39 hour working week is £298.35 per week and in a year is £15,514.
Now imagine a couple both working a 39 hour week at this minimum wage and lo and behold the household income is £31,028 per year and their Housing Association landlord is obviously keen to get the additional £3,207 per year in rent from this couple both earning the minimum wage
You can see the problems straightaway in the tenant trust of the landlord and that is a very obvious example of what Pay MORE to Stay is and how the living / minimum wage interacts.
Is social housing no longer going to be for working tenants and what impact does that have on allocations of social housing and so many other obvious questions emerge which I do not discuss here: Rather I will focus on two simple questions:
- What is income for Pay MORE to Stay purposes?
- How the hell can landlords legally get income data on tenant?
Income? Imagine if Dad is of working-age (as presumably the Tories will exempt the pensioner) yet has been retired from work. He may be an ex soldier or an ex police officer or any one of many types of worker who have been retired with a works pension. Is that income?
If so and lets say it is income and is £20,000 per year then if Mum goes out and works 26 hours a week at £7.65 per hour she will earn £10,343 per year making a household income of over £30,000 and thus the household has to pay £3207 per year more or if in London £8679 more per year in rent.
Or is income a total figure for wages, private pensions and welfare benefit income?
Social housing has many disabled tenants as the private rented sector does not cater for them and it is possible for a household to receive more than £30,000 per year in welfare benefit alone noting here that the benefit cap does not apply to households in which anyone is in receipt of Disability Living Allowance or PIP
So if a household has a disabled child who is in receipt of DLA then will that count towards income as a child can receive DLA and in 2013/14 a total of £1.46 billion was paid out in DLA for children. Will foster payments count as income as that can easily take household income well over the £40,000 limit never mind the £30,000 limit!
What, therefore, is income??
How can landlords get income data on tenants?
Quite simply they cannot legally at present get this data unless the tenant agrees to give their income data.
The release of an article in the Local Government Chronicle caused a bit of a discussion on Twitter today and this is below:
Coulda – woulda – shoulda aside, the idea of some form of legislation to FORCE a tenant to reveal household income (however defined) to a housing association, more correctly called a PRIVATE Registered Provider is the biggest heap of crap I have heard since…well since Grant Shapps first raised this pay MORE to stay bollocks in the first place.
The Twitter discussion suggested amongst many others that perhaps a new ground for possession could be the way to legislate for this which is what the article says is the government intention. Though as usual we have the obligatory unnamed DWP spokesperson mentioned in the article, the usual tactic that the increasingly politicised civil servant uses and that allows journalists to hide behind when they have column inches to fill with whatever cock and bull story is to hand.
Bollocks – Mrs Smith the partner of the tenant Mr Smith refuses to allow him to tell the landlord what her income is. Now imagine this comes to an eviction hearing and I would strongly doubt that the district judge cannot force Mr Smith to reveal the income of the non-tenant and non legal party Mrs Smith to the eviction action even if Mr Smith knows the income of Mrs Smith.
The reality and real rationale of Pay MORE to Stay is a policy which hugely incentivises the social tenant to take up RTB1 or RTB2 as it means paying a far higher level of rent than they would pay on a mortgage even if the RTB discounts (ie brown paper bag bungs) were not available.
Take the couple both working from above whose salary income on the minimum wage goes to over £31k above and they are currently paying the £92.20 average social rent per week (see below from EHS) which is £399.23 per calendar month. Their pay MORE to stay rent increases to £153.67 per week or £665.39 per calendar month.
Roughly £300 per calendar month buys a mortgage of £100k and so £665.39 in rent equates to pay a mortgage on a £221k mortgage. Right across the North the typical 3 bed social housing property may be worth £100 – £150k and after the RTB discount lets say £100k mortgage would be required.
To take up a mortgage which would be available is a financial no-brainer and the working tenant couple on the new minimum wage would be £365 per month better off or £4380 per year better off paying a £100k mortgage than the pay MORE to stay rent.
That is the Pay MORE to Stay rationale and cleverly not only buys a Tory vote like the original RTB of Thatcher it also paints the housing association as the enemy of the aspiring tenant and also the non-aspiring social tenant.
And once again the incompetent great and good who allegedly lobby and promote social housing on behalf of all social landlords have been outflanked and this time the government have hammered the nail into the social housing coffin by even making the social tenant see the landlord as the enemy.
Timing? Yes the pay MORE to stay begins in 2017 and a year after social landlords will have evicted tens of thousands of social tenants that is highly probably around 80,000 of them containing 250,000 children as a result of the benefit cap reduction to £384 per week for 83% of all housing benefit claiming social tenants…. done up like a kipper!
The last thing housing associations needed to do was portray themselves as money grabbing and guess what the NHF did this week? Yep do exactly that with A place for housing the new plan to get over the truly woeful Homes for Britain which sees a desire for 120,000 properties built by them and every single one of them at higher income for the housing associations as not 1 of those 120,000 is a property at social rent!!
I will stop there reader else I will get a bit sweary and shouty at just how truly incompetent …