Hard-working families will lose their London homes and be forced out of the capital by George Osborne’s ‘pay to stay’ reform, claims Carshalton and Wallington MP Tom Brake.
The government’s proposal would mean London families living in social housing with a combined income of more than £40,000 will have to pay rent at market, or near market, levels as subsidised rents for families earning over this threshold end in April 2017.
The policy will affect 27,000 homes and the tenants will be left unable fo afford rent or buy in their area they have raised their families, according to figures gathered by Savills estate agents, for the Local Government Association.
With the cost of renting privately in London soaring, many council tenants exceeding this income threshold will be left in a desperate position.
Mr Brake said: “The London pay to stay proposals will force out of their homes many of the key workers whom Londoners depend upon.
“They won’t be able to afford market rents and will have to desert the capital.
“Older tenants, close to retirement, will be forced out of their homes, just at the point when they are contemplating a long retirement.”
Because of the distinction between people who work, and therefore have a higher combined income, and those who rely on benefits, there are fears that the proposal could encourage a culture of not-working.
Families could find themselves choosing between their jobs and keeping their children in the schools and environment they have grown up in.
“This will definitely act as a very strong disincentive for people to secure promotion or work longer hours or secure well paid employment after they are made redundant,” said Mr Brake.
There appears to be no middle ground for families exceeding the threshold who are unable to afford to rent or buy within their area as a result of little affordable housing in London.
The policy is likely to result in rent almost doubling for families wishing to stay in their area.
However, in response to Savills’ report, a Department for Communities and Local Government spokesman said: “We do not recognise these figures and LGA research does not bear any resemblance to our policy – which is to introduce a gradual link between rent and income.
“It’s simply not fair that hard-working people are subsidising the lifestyles of those on higher than average incomes. Pay to stay better reflects tenants’ ability to pay, while those who genuinely need support will continue to receive it.
“Furthermore, Housing Associations will be able to use the rent subsidy that they recover to reinvest in new housing.”
Although it’s argued that this is to charge more to higher than average incomes the former head of the civil service, Bob Kerslake, said original coalition government discussions intended the policy to deal with the very small number of high earners on over £60,000.
Picture courtesy of altogetherfool, with thanks