Shapps details Affordable Rent scheme

10 Dec 10
Housing minister Grant Shapps has given more details on his reforms to social housing, due to feature in the government’s forthcoming Decentralisation and Localism Bill

By David Williams

10 December 2010

Housing minister Grant Shapps has given more details on his reforms to social housing, due to feature in the government’s forthcoming Decentralisation and Localism Bill.

In a ministerial statement published yesterday, Shapps released new information on ‘Affordable Rent’ properties – a new scheme first announced in October’s Comprehensive Spending Review.

Shapps confirmed yesterday that allocation policies for Affordable Rent homes will be similar to arrangements for social housing properties, and that Affordable Rent would be subject to regulation by the Tenant Services Authority, and its successor body from 2012.

Although it is not yet clear exactly how rents will be calculated, Shapps also confirmed that each property would be valued individually, and not priced according to local average rents.

Annual rental increases will be capped at 0.5% above the retail price index for inflation.

Shapps said: ‘The introduction of Affordable Rent will represent a significant first step towards giving social landlords much greater freedom to respond to local housing need.’ He said the system would be aimed at a more diverse section of the population than the households that currently qualify for social housing.

The scheme will offer housing associations the flexibility to convert vacant social rent properties to Affordable Rent, Shapps added. But he said this would only happen where social landlords have agreed with the Home and Communities Agency about how additional rental income will be reinvested in the supply of new affordable housing.

Shapps said Affordable Rent would give new flexibility to registered social landlords. Under the system, rents will cost 80% of market rates – more expensive than rent charged to tenants currently in social housing.

The HCA has a capital budget of £4.5bn over the next Spending Review period, to fund affordable housing. Of this, £2.3bn will be spent on existing social housing commitments, while much of the remainder is earmarked for new Affordable Rent homes.

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