11 June 1999
This summer's decision on social housing grant levels will give the government the opportunity to show that it is serious about restructuring rents charged by RSLs, the federation said.
The federation's submission on rent affordability and housing benefit is designed to influence ministers prior to the publication of a green paper. This will look at whether rents should bear more relation to the size, location and condition of properties.
The submission, sent to housing minister Hilary Armstrong, pointed out how the level of subsidy paid to RSLs through the social housing grant has fallen from 75% to 54% since 1989/90.
If it were increased to 65%, tenants would pay no more than one-quarter of their income in rent, compared with nearly 30% at present.
Jim Coulter, the federation's chief executive, said the cost of paying extra grants could partly be funded by reduced housing benefit claims. By helping to reduce higher rents, it would also be an important step towards achieving greater rent cohesion. 'This is not going to be a cost-free exercise, but government departments have got to start looking at the trade-offs,' he said.
The present framework for regulating rent increases, based on changes to the Retail Price Index, should be replaced by a new system of investment contracts, says the federation. These would define acceptable rent levels according to affordability.
PFjun1999
