The Distracting Effect of Events in the House of Lords

The Government suffered another blow this week over their controversial Housing and Planning Bill when Pay to Stay was blocked in the House of Lords. The amendment, if passed, would have meant council tenants paying a premium on their rent if their income rose above certain thresholds, bringing them much closer to market rates. These defeats take the number near to double figures in one of the most controversial and significant housing debates in years.

Pay to Stay is controversial because critics believe it will push tenants out of their homes and make them worse off, effectively punishing them for being aspirational. There is also the issue of there being a disincentive to work hard if you are punished by having your rent increase. The counter argument is also persuasive. We have a shortage of social housing, and in particular council housing. Lives change and evolve, and a person who desperately needs social housing at aged 20 might no longer need it at age 25. Reviewing and revising rent rates in line with this can be helpful. Why shouldn’t the system be fluid enough to accommodate changing lives, allowing it to better service the people who need it most?

The free market shouldn’t be allowed to dictate proceedings when it comes to social housing. The housing market, all over the UK but especially in the South East, is not naturally set up to help those on low incomes. Social Housing exists as an intervention, made to protect people from market forces when they need it. The price of social rent is the price required to create places for low income and vulnerable people to live. But rather like a coastal dam creaking under the pressure of a relentless tide, social housing rents are under immense pressure to give into market forces. So given we already have intervention in the housing market, it’s a question of how much more the Government should try to influence things.

The Government has created a set of policies. It’s justification for them, and their arguments have some logic. So do those of their critics. When it comes to Pay to Stay, the Government is trying to stretch the rations of affordable housing so that it is able to support as many people who need it as possible. Their assessment of that need is subjective, depending on what statistics are focussed on. The reason for having the conversation about appropriate usage of social housing stock is that there are not enough affordable homes. One tactic to resolve the problem is to ease out people that they believe do not need the lower rents.

I really welcome the House of Lords attempts to curb the Government’s proposals. Protecting tenants should be important and prominent on the Government’s list of concerns. Limiting the effect of Pay to Stay is important but it should not distract people from the main argument. We need more homes that are truly affordable. Building more homes is something the Government have made a big commitment to. There are doubts though about how they will hit their volume targets and how truly affordable they can get those homes to be.

Of course there are a large number of affordable homes that exist in the country already. Significant pressure can be relieved if more people had or understood the opportunities and lifestyle available across the country, particularly away from the South East. A combination of creating business opportunities, regenerating city centres, and effective marketing are required to do this.

The solution of course will be a blend of these things. The role of Pay to Stay though should be marginal in comparison to the contributions provided by the other approaches.

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Retinue Solutions | Social Housing Team

Head of RPO Services

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