You are viewing 1 of your 1 free articles
Tenants should not pay if rents go up next year, SHAC says
The Social Housing Action Campaign (SHAC) has encouraged tenants to withhold payment of rent and service charges if the government and housing associations do not freeze rates for next year.
The campaign group, which earlier this month called on the government to freeze rents and service charges in November for those living in housing association properties, said it would support tenant action against any rises.
“SHAC is encouraging tenants and residents to withhold payment of any April rises and continue paying at their current rate,” it said this week.
The level that housing associations can raise social rents is set in November when the government announces the formula to be used. The current policy came into effect in April 2020 and permits rents to increase by up to the value of Consumer Price Index (CPI) inflation as at the previous September plus 1% annually.
This would mean that social rents could rise by as much as 11.1% in 2023-24, if forecasts for inflation are correct.
READ MORE
But on Monday it emerged that the government is mulling a cap on the amount that housing providers will be able to increase rents by next year as part of measures to ease pressure on tenants hit by the cost of living crisis.
Shared ownership rents are normally the Retail Price Index (RPI) plus anything up to 2%, and there is no cap on service charge rises.
“Rising costs for essential items and a 40-year inflationary spike mean that people are already managing on tightly squeezed budgets. Households cannot absorb rent and service charge rises at this level,” SHAC said.
It said it is of the view that housing associations can absorb inflationary costs and do not need to pass them on to tenants and residents.
SHAC warned that higher rents would increase arrears. “Even before the COVID pandemic and cost of living crisis, rent arrears among housing association tenants and residents were building at a steady rate of around 10% annually. Between March 2018 and March 2021, rent arrears grew from £591m to £704m,” it said.
Increasing costs would also place greater strain on the public purse because it would require more Universal Credit to be paid out to cover the higher costs.
Instead, SHAC said housing associations should be barred from applying any increases to their rents and service charges.
Sign up to the Social Housing Annual Conference 2022
The Social Housing Annual Conference is the sector’s leading one-day event for senior housing leaders, which delivers the latest insight and best practice in strategic business planning. The conference will provide multiple viewpoints and case studies from a variety of organisations from across the housing spectrum, including leaders in business and local and central government.
Join your peers for a full day of intensive, high-level learning, networking and informed debate addressing the most crucial topics surrounding finance, governance and regulation to help the sector understand and manage the pressures it faces.
Find out more and book your delegate pass here.
