The Federation warned that the government’s decision to charge new social housing tenants up to 80% of the market rental rate could trap thousands of social housing tenants in a lifetime of poverty, provide a strong disincentive to work and to increase dependency on benefits.
It also reported that thousands of low-income families could end up having to pay £9,000 extra a year in social housing rents, as the government looks to make up for the 60% cut in the housing budget – one of the biggest cuts made to any budget for a key frontline service.
“Cuts on this scale will come as a devastating blow to the millions of low income families currently stuck on housing waiting lists,” said David Orr, Federation chief executive.
“The harsh reality is that because of these cuts, the new social homes this country so desperately needs can now only be built by dramatically increasing rents for some of the most vulnerable and poorest in our society.”
He added: “Most tenants simply won’t be able to cover these extra costs, and as a consequence make it more difficult than ever for people to escape the poverty trap and benefits dependency that the government has repeatedly said it wants to tackle.”
The average rent for a three-bedroom social home is £85 a week. But under the plans to allow increases in rents of 80% of the market rent, that figure could triple to £250 a week.
The NHF warned new tenants could becoem more heavily dependent on housing benefit to cover the extra costs. Those gaining work would see their housing benefit payments fall – meaning they would be forced to pay even more from their own pockets, acting as a powerful disincentive to get a job.
Social homes for life could also end for new tenants, who might be handed fixed term contracts, under the government’s proposals.
Swinging cuts to services for vulnerable people will also hit the poorest hardest and increase housing demand for social housing.
