Dear Colleague,
As you are aware, the Government introduced powers in the Housing and Planning Act 2016 to provide for an income based rents policy, requiring Local Authorities to set higher rents for higher income council tenants.
Since the summer, we have been reviewing this policy and we know that you have been waiting for the detailed regulations to be published.
We have listened carefully to the views of tenants, local authorities and others and as a result the Government has decided not to proceed with the policy in its current compulsory form. This was announced via a Written Ministerial Statement today, which can be viewed at the following link: http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2016-11-21/HCWS274/
The Government remains committed to delivering its objectives in social housing and to ensuring that social housing is prioritised for those in most housing need. But we need to do so in a way that supports those ordinary working class families who can struggle to get by, and in a way which delivers real savings to the taxpayer. The policy as previously envisaged did not meet those aims. Local authorities and housing associations will continue to have the discretion to implement the policy for tenants with incomes over £60,000.
The Government remains committed to delivering its objective of ensuring social housing is occupied by those who need it most. But we need to do so in a way that supports those ordinary working class families who can struggle to get by, and in a way which delivers real savings to the taxpayer. The policy as previously envisaged did not meet those aims.
This is why we are introducing the mandatory use of fixed term tenancies for new tenants in local authority housing. This will better enable councils to give priority to people with the greatest housing need. Councils will review tenancies at the end of each fixed term to ensure that tenants still need a socially rented home. The Government’s guidance to councils will make clear that they should take into account a household’s financial circumstances when looking at this, and that, except in exceptional circumstances, tenancies should be targeted on those on lower incomes
We are very grateful to all of you for your engagement to date through participation in roadshows and other events; this has been integral to understanding the reality of policy delivery.
Kind regards
The Income Based Rents team
Income Based Rents for Social Tenants
3rd Floor
Fry Building
Department for Communities and Local Government
2 Marsham Street
London, SW1P 4DF
Tel: 0303 444 2402
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