Government Back Plans To Scrap Rent Subsidy for Higher Earners

The government is introducing measures that will remove the social housing rent subsidy for higher earners.

In what is being called a “pay to stay” scheme, the government are backing plans to introduce a new household income threshold, which will see social tenants with a total income above the threshold paying full market rent.  It is expected that the rent subsidy will be capped at a household income of £60,000.  A total household income beyond this threshold could see tenants rents rise by around £70 a week.

It is being made clear that, under these new measures, no one will be evicted from their homes, they would simply have to pay a higher rent.

The subsidy scheme, which is open to all housing association and council properties, is explicitly designed to make social housing primarily available to the poor.  The government has backed the “pay to stay” plan, in the hope that it will remove unfairness in the system, and allow the allocation of housing resources more efficiently.  Critics are saying the scheme will give an incentive to those wealthier households to purchase their properties at a discount through the “right to buy” scheme, thus removing social housing from the market entirely.

Government sources commented that social housing should be regarded as a precious asset to be devoted to those most in need, not a cheap option for those who can afford competitive rents or their own property.

Government research shows that as many as 6,000 social rented homes in England are lived in by people who earn a combined income of more than £100,000, including Bob Crow, leader of the RMT union.  At the proposed £60,000 threshold, ministers estimate as many as 34,000 social rented homes in England alone would be affected.

The government consultation is due to be launched next month by Housing Minister, Grant Shapps, and will suggest a range of options for the threshold, with the lowest at £60,000.

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