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LGA responds to higher income earners in social housing having their rent raised to market value

Councils comment on the Budget announcement that higher income earners in social housing will have to pay market rents.

Commenting on the announcement in yesterday’s Budget that higher income earners who live in social housing will have their rent raised to market value, Cllr Gary Porter, Chairman of the Local Government Association, said:

"Local authorities welcome the principle of any additional powers to set differential rent levels based on local circumstances and housing markets, but these must remain affordable for those in work but on a low income.

"Councils, like Housing Associations, should be able to retain the additional income generated from these rents to build new homes. This would have far greater benefits for local communities than the money going to the Treasury.

"If we are to see the homes desperately needed across the country built, councils must have a lead role in housebuilding and be allowed to reinvest in the homes and infrastructure that they are best placed to help deliver.

"The housing market isn't black and white and it's important this policy needs to be flexible enough to work in the complex and substantial range of housing markets that exist across the country. It must also be able to be tailored so as not to act as a disincentive to people being in work.

"Ultimately the devil will be in the detail and we are now asking government to work with us to make sure the details of the policy are workable and can have the greatest potential benefits to all of our communities."

Notes

  1. The policy proposes that Housing Associations will be able to retain the additional income generated from these rents, whereas councils will be obliged to direct these monies to the Treasury.
  2. For the past five years, housing associations and local authorities have been able to charge market rents to those on incomes of more than £60,000 and this will already have been factored into councils' investment plans and accordingly they should continue to retain that.
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