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MAKING RENTS WORK - RESPONSE TO HOUSING CORP'S CONSULTATION ON RENT INFLUENCING REGIME

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Increased flexibility must be built into rent restructuring proposals if their ...
Increased flexibility must be built into rent restructuring proposals if their
implementation is to succeed, the National Housing Federation is warning the Housing
Corporation.
In particular, the federation is calling for measures to reduce target rents
for new developments in parts of London, further support for black and
minority ethnic housing associations and further negotiation on rent
restructuring in supported housing. The current Grant model assumes that for newly developed homes RSLs will charge target rents from the first day they are occupied. The federation is warning that in some parts of London target rents could be
twice current rents. It is calling for a taper that restricts the value element
to no more than three times the national average. The shortfall could be
funded by higher grant rates, for which the federation argues long-term
savings in housing benefit will more than cover the costs. The federation is also calling for a support fund for black and minority ethnic housing associations to be set up. It argues that rent restructuring proposals as they are, will seriously hit these associations in particular.
Average rents for the sector could fall by 15%, meaning that without
support many would be forced to appeal to the corporation for
permanent rent restructuring waivers. The federation argues that this
could seriously undermine the sector and risk the service they give to
tenants. It argues that a support fund will provide a cash injection to
those associations that needed one and secure the sector's
independence.
Finally, the federation is calling for further work to be done on the
effects of rent restructuring on supported housing. There are some
serious concerns that must be addressed by the new DETR working
group, of which the Federation is a member. It warns that there are
some good reasons why average rents for supported housing are
higher than average rents in the rest of the sector and that earnings for
tenants are well below others. The federation believes it will take a year
to resolve these issues and then supported housing should be allowed
the full ten years to meet target rents.
Liz Potter, director of policy at the National Housing Federation, argued:
'No one said that rent restructuring would be easy. But the reality is that
without amendment the proposals will have some perverse effects for
certain tenants. We have to ensure that the result is affordable rents for tenants and a system that ensures the sustainability of the RSL sector, be it
mainstream, supported or black and minority ethnic housing associations.
'The proposals we have made are technical adjustments, but they will
ensure the future success of the programme.'
The proposals were made by the federation as part of its response to
the Housing Corporation's consultation on the Rent Influencing Regime.
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