Rowntree Housing Trust rejects fair rents
The Joseph Rowntree Housing Trust, providing homes in and around York, has decided to discontinue the automatic implementation of decisions by the Rent Officer service. Faced with rent increases averaging 27.5% (covering the usual two year period) the Trust has substituted increases at the level it requested of the Rent Officer - approximately 7%. For future years rent increases in 'fair rent' properties will be indexed.
For its February rent registrations, the association had requested rent increases, based on the increase in earnings, at an average of £3.25 pw (on rents averaging £44.50 pw); instead, the Rent Officer had decided on increases averaging £12.25 pw.
"I think the fair rent system will not last much longer for housing associations," said Richard Best, Director of the Joseph Rowntree Housing Trust (and the Joseph Rowntree Foundation). "Efforts by Rent Officers to move these rents into line with private sector market rents makes a nonsense of the concept of 'social housing'. Grants (and charitable donations) have been provided to ensure that the homes are suitable for people with low incomes. Those in low paid employment should not face rents so high that they are impoverished or have to seek Housing Benefit which forces them into a trap where hard work is rewarded only with reductions in Benefit."
The JRHT, which is the housing association arm of the Joseph Rowntree Foundation, had already instituted a policy of phasing increases in fair rents over two years. But this has still meant rent increases substantially in excess of inflation. With earnings rising only gradually, rent increases have had an increasing impact on the incomes of those in low paid employment. Elderly people with small occupational pensions, or accumulated savings, can be particularly hard hit.
The Joseph Rowntree Housing Trust matches rents for those with assured tenancies at the same levels as the fair rents set by the Rent Officer. This means comparable rents for new tenants and long-standing tenants. All rents will now be increased on an inflation-based formula for next year (unless, as seems improbable, there are any determinations by Rent Officers of rents at a lower level).
"Each association's duty and accountability to its residents must include ensuring that they are not subject to increases in rents that bear no relationship to improvements in services or conditions," continued Richard Best. He added that it was significant that government had become concerned about rising rent levels and that the Housing Corporation 'was at last taking the issue seriously'.
"Although government may be motivated by a desire to cut escalating costs of Housing Benefit, there is also a growing recognition that the very purpose of social housing is undermined if the accommodation is not affordable to those with low earnings." He concluded: "Provided the Housing Corporation's regulation can achieve some fairness and consistency, this would seem preferable to the continued use of the Rent Officer service for social housing landlords. It seems the time has come for housing associations to disentangle themselves from a regime which cannot distinguish between publicly subsidised properties intended for those on low incomes, and unsubsidised accommodation let by private landlords on the open market."
