25 April 2003
A three-year government review of rent restructuring has been criticised by the Chartered Institute of Housing for avoiding major questions.
The review, launched by the Office of the Deputy Prime Minister on April 9, comes two years after councils and housing associations began moving towards a new formula based on local earnings and property values.
All landlords have until 2010 to comply with the new formula and, in the meantime, tenants are being cushioned against major fluctuations.
But according to the CIH, the review will do little more than tinker with the system by looking at issues such as the calculation of house sizes. Major questions, such as the effect on a landlord's cash flow, will not be addressed.
'There has been no real analysis of the policy itself,' said CIH policy analyst Mark Lupton. 'We need to know that rent reform is going in the right direction before we move on to housing benefit reform.'
Neil Griffiths, research officer at the National Housing Federation, said associations in the Midlands and the North, where lower property values are driving rents down, were being forced to rewrite business plans. 'There are problems with a lack of reinvestment,' he said.
Under the policy, no tenant should have to pay a weekly rent increase in excess of £2 more than inflation plus half of 1%.
Gwyneth Taylor, programme manager for housing at the Local Government Association, said the ODPM was aware some local authorities would not meet the formula (based on 70% earnings and 30% capital values) in the time allowed.
'Some authorities need a lot longer because of the restrictions on putting rents up,' she said.
PFapr2003
