Pay MORE to Stay – (used notes, brown paper bag!)

The pay MORE to stay policy which sees tenants pay more in rent if their household income is above £31,000 per year in the regions and £40,000 per year if in London begins in April 2017.

Its called pay to stay yet every tenant already pays to stay so pay MORE to stay aptly names the policy which sees an increase of £150 per year for every £1000 of household income above the £31 and £40k thresholds.

All of the articles on this (Guardian, Property Tribes among others) miss some key points such as:

The policy is mandatory for all council landlords yet discretionary for housing associations.

Excess rent (the pay MORE to stay bit) is not kept by councils but is handed over to central government; yet excess rent collected by housing associations stays with housing associations.

The National Housing Federation has asked landlord to crowd fund an IT solution with the purpose of extracting every possible penny from HA tenants so make of that ‘discretion’ what you will!

We still await who is included in the ‘household income’ considerations as the House of Lords which said it only affects tenant and partner / spouse income on 4 May was seemingly contradicted in House of Commons on 5 May and the Act itself fails to define ‘household income’ at all.

The policy is of the usual superficial ideological bullshit variety and is impractical, unworkable and deeply offensive.

The political sophistry of government is that if a social tenant can afford to pay more then they should for the scarce resource that is social housing – as superficial as it gets when we barely scratch that thinnest veneer.

The context – All social landlords have the mandated 1% rent cut, the Right to Buy extended to HA properties which forces councils to sell their properties, the removal of social grant, the LHA maxima cap and especially the overall benefit cap reducing in just 10 weeks time.

In short council and housing association incomes are under attack and none more so than the overall benefit cap which sees the 3 bed and larger properties become unavailable for existing and new tenants if they are fully occupied by the benefit tenant.  3 bed properties account for 36% of all social housing as a national average yet some landlords have over 70% of their stock as 3 bed or larger.

What this means is that no new tenants on benefit will be allocated a 3 bed property as they are too risky and so the target market for that landlord has to change to the self paying tenant not on benefit.

Now with pay MORE to stay we will see allegedly social landlords choosing the tenants with the highest incomes so the landlords can maximise their income with a higher rent.  The most perverse means test of the more means you have the more likely you will get a scarce social housing property!  And with 385,000 or so new tenancies created each year in social housing this is not a small issue!

Oh we won’t do that as we are a charity and/or we have nomination agreements says the HA sector … both excuses and just as superficial and ideological as the bullshit of this policy.

Firstly as the overall benefit cap forces HA’s to only accommodate self-payers then that with the fact charities are still social businesses means that argument is paper thin.

Secondly, all nomination agreements cannot force any HA to take a benefit tenant who would be unable to meet the rent (overall benefit cap again) so nominations can and will be refused and new properties will be populated with self-payers.

This leads onto a key third point as the number of new tenancies per year in social housing is 385,000 (2014/15) yet this year will be much higher due to social landlords evicting many more tenants from their 3 bed properties due again to the overall benefit cap.  So there will be many more empty properties in social housing that can ONLY be populated by non benefit tenants, that is the self-payers.

Even council landlords will refuse benefit tenants who will be caught by the overall benefit cap (at an average of £70 per week HB cut) and so the combination of the overall benefit cap and pay MORE to stay means social housing becomes more and more asocial by the day.

Social housing ceases to house those most in need and the most vulnerable.

The above are just some of the reasons why pay MORE to stay and its superficial premise that those who can should pay more is ideological bullshit as all it does it put MORE higher income households into social housing.

Is it any surprise after reading the above why councils (note NOT council landlords) are so against this while housing associations are crowd funding an IT solution to wrestle every last penny from every HA tenant?

Impracticality

What if the tenants partner or spouse refuses to divulge their income to the council or HA landlord stating it is my private confidential information and none of your effing business?!

Then both council and HA landlords, we are told, are allowed to assume you have something to hide and allowed to impose full market rent!  I kid you not and I will leave that issue else I will rant all day over the issues it creates.

What if your income varies?

What redress do you have to challenge any decision?  That will be fun as councils being public authorities will also be exposed to judicial review a well as any appeal mechanism they come up with.  Yet housing associations must also come up with an appeal system but they can be judge, jury and executioner in such a role and I strongly suspect any appeal process will be a sham and without any real chance of any form of due or just process!

Solution? 

I am strongly advising that all tenant self payers immediately halt their direct debit rent payments and replace them with standing orders instead as the tenant then keep control of how much is paid.

That way your landlord will have to take further actions to recover this excess rent in pay MORE to stay and for which HA’s at least will surely encounter legal problems as the policy is discretionary for them.

How can you recover excess rent payments that are not mandated but are imposed through a discretionary policy?  I can see a huge heap of legal actions in this area.

The tenant having control of paying their rent- to which they have contractually agreed – will also act as a barrier to HA landlords considering a pay MORE to stay policy before this discretionary policy could begin.  HA boards have to approve the use of pay MORE to stay policy and if all tenants who now pay by direct debit halted them and paid only by standing order then that will strongly play on the minds of HA boards when they deliberate this issue.

This simple switch from direct debit to standing order will frighten the life out of all social landlords yet the rent is being paid and the tenant, the customer as many social landlords call tenants, takes control of the payment of rent.

Such a move will see tenants exerting the much greater influence they should over the overtly private route their HA landlords are taking (as a sector) as that route means the sons and daughters and nieces and nephews and grandchildren of existing tenants will have no social housing available to them.

Dangers and stating the bloody obvious

The scope for fraud anyone?  Those currently paying sky high private rents to private landlords and with no regulation over rent levels and the prospect of not getting repairs done and retaliatory evictions and a few thousand per year in letting agent fees would bite the hand off a landlord to have a social housing property even at full market rent as it will give stability for 5 years or even more that such tenants now do not get in the private rented sector.

I’ll just leave this brown paper bag here while you choose between me and the other tenants …

Q) How much should the going rate be to be allocated a property you can buy at a £80 – £105k discount in a few short years? Hmm? I’m sure unscrupulous types can easily find plenty of people with 8 years previous social tenure who can take up the RTBe in just two years time.  Sorry reader, answering my own question there!

I am not casting aspersions on allocations officers here, I am merely stating the bloody obvious that the system is ripe for back-handers and brown paper bags stuffed with used notes.

The overall benefit cap which necessitates social landlords look for self-paying tenants and then pay MORE to stay policy on top actively and directly encourages such covert practices.  In tandem these two policies fundamentally change the nature and practice of allocating (the scarce resource of) social housing properties.

Of course the point will be met with howls of derision and how dare you say that Joe and the like.  I am saying it because it IS the bloody obvious but if you want to be superficial and in denial then by all means blame the messenger!

For a sector that wants to concern itself with RTB fraud as apparently 10% of RTB sales are to those on housing benefit, taking umbrage at my stating the bloody obvious that the potential for fraud escalates massively with pay MORE to stay would be disingenuous.

Pay LESS to stay? – Eh!?

There are a small number of areas in the UK where the current social rent level is actually HIGHER than the local gross market rent level.  So do HISTs (High Income Social Tenants) get a reduction in rent if their household income is over £31,000 per year?

Yes the policy really is that much of a f*ck up reader!  Far worse are the consequences and impacts I explain above as by now nobody is willing to listen to the argument that this Conservative government is out to destroy the social housing model the 1948 Welfare State created, it is fully accepted fact.

____________

PS – Nobody has yet explained to me why London at £40k has a higher pay MORE to stay threshold than than the £31k threshold in Elmbridge, Guildford, St.Albans and a few more places that have higher social rent levels than central London (seriously!) … well apart from the posit that this is just another facet of this superficial ideological bullshit of a policy I mean …

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