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"Most radical reform in a generation" nets councils and housing associations new powers

Local authorities and housing associations are to be given new powers to make the best use of their housing, ministers claimed today at the launch of a consultation that promises to herald “the most radical reform of social housing in a generation”.

The government insisted that the reforms would make the system fairer and strike “a proper balance between the needs of new and existing tenants”. Support will also be focused on those who need it most “for as long as they need it”.

The key measures in Local decisions: a fairer future for social housing – which was launched by Grant Shapps and Andrew Stunell – are:

Tenancies

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  • There will be no change to the lifetime tenancies of existing tenants – “that is to say, people who are tenants at the time the law is changed”
  • Councils and housing associations will have the freedom to grant fixed term tenancies, as well as lifetime tenancies, to new tenants. These fixed term tenancies “will be at social rent levels and provide another option for landlords and tenants alongside the new fixed term Affordable Rent tenancies”
  • Landlords will not have to grant the new fixed term tenancies and will be able to continue to give lifetime tenancies in some or all cases, “if they consider this is right”
  • “Generally speaking”, fixed term tenants will have the same rights as lifetime tenants, such as a right to repair, and a right to buy/acquire
  • New fixed term tenancies will have a minimum time period of at least two years, but no maximum time period, “so landlords can provide a length of tenancy that takes account of the needs of individual tenants and the local community – be that 10 years, 20 years, or longer”
  • There will be a consultation on other rules for the use of fixed term tenancies. Those include: whether the minimum period should be more than two years; whether some groups should always be guaranteed a longer fixed term or a social home for life; and whether existing secure or assured tenants should always continue to receive a lifetime tenancy when they move
  • Landlords will need to publish their own policy on tenancies in the light of these rules and tenants’ views. Decisions on whether to renew a tenancy at the end of the fixed term will need to be in line with that policy
  • Landlords will need to discuss the various housing options with their tenants “well before” the end of the fixed term, and help tenants move on to different accommodation, where this is appropriate

Succession

  • The rules on succession will be changed so they are the same for all new tenants. For all new tenancies – lifetime and fixed term – in future, the spouse or partner of the tenant will have an automatic legal right to succeed, as long as the tenant him/herself isn’t a successor. However, landlords will be able to give additional succession rights in the tenancy agreement
  • These changes on succession will not affect existing secure tenants who stay in their current home or move using the nationwide social home swap scheme. They will also not affect the right of a joint tenant to take over the tenancy when the other joint tenant dies

Affordable Rents

  • A new ‘Affordable Rent’ tenancy will be offered by housing associations to new tenants of social housing from April 2011.   These properties will offer shorter term tenancies at a rent higher than social rent, with landlords able to set rents anywhere between current social rent levels and up to 80% of local market rents. “Local authorities will continue to play a key role on nominations”
  • Tenants of Affordable Rent properties will be able to get housing benefit, if they are eligible

Allocations

  • Councils will be able to set the rules on who qualifies to go on the housing waiting list
  • The rules which determine who should get priority for social housing will continue to be set by central government, by means of the statutory Reasonable Preference categories. “This is to ensure that priority for social housing continues to go to the most vulnerable in society and those who need it most”
  • Council and housing association tenants who want, rather than need, to move will no longer have to compete with other people on the waiting list. “Councils will be able to develop their own policies for these transferring tenants. However, social tenants who are in housing need (e.g. those who are overcrowded) will still go on the waiting list and will also continue to get priority”

Mobility

  • A nationwide social home swap scheme will be introduced so that all council and housing association tenants wishing to move “have the best chance of finding a suitable match”

Homelessness

  • Councils will be able to bring the homelessness duty to an end with an offer of suitable private rented housing. “At the moment, they can only do this if the person agrees (unless they are offering temporary accommodation)”
  • The tenancy offered will have to be for at least 12 months “and if the person becomes homeless again within two years through no fault of their own, the council would have a duty to secure accommodation for them again”. Councils will still be able to offer social housing to end the homelessness duty

Council housing finance

  • The Housing Revenue Account subsidy system will be replaced by a new self-financing arrangement that will “enable councils to keep all the rent money they raise and spend it locally on their services”. The new arrangements will also enable tenants and local taxpayers to hold their landlord to account.

Grant Shapps, the Housing Minister, claimed that "for far too long in this country there has been a lazy consensus about the use of social housing, which has left one of our most valuable resources trapped in a system that helps far fewer people than it should”.

He insisted that the proposed regime would protect the most vulnerable in society, while at the same time provide councils and housing associations with greater flexibility.

"But above all it will be fairer – councils will now be able to make decisions that genuinely meet the needs of local people, and the changes will not any affect any existing tenants,” he added.

Communities Minister Andrew Stunell said it was “unacceptable” to have five million people on social housing waiting lists.

“Clearly this system is broken and needs a radical overhaul,” he added. “We need to have a much smarter system that protects lifetime tenancies, but also provides the flexibility to ensure that help is targeted at people who really need it, and enables us to get more for every pound of taxpayers' money. In times of economic hardship, it is vital that social housing is effective in helping people get back on their feet."

A copy of the consultation paper can be downloaded here.

The deadline for responses is 17 January 2011.

See also: New forms of tenure "unlikely to have any impact in short or medium term"

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