The Department for Communities and Local Government and Housing Minster, Brandon Lewis MP have played another “blinder” and hammered home yet another nail in the coffin for the Private Rented Sector (PRS) in the form of “Pay to Stay”.
Housing Minister, Brandon Lewis, said:
“It’s not fair that other hard-working people are subsidising the lifestyles of higher-earners to the tune of £3,500 per year, when the money could be used to build more affordable homes.”
“’Pay to stay’ will ensure that those tenants on higher incomes who are living in social housing have a rent that reflects their ability to pay, while those who genuinely need support continue to receive it.”
Here is the link to The Department for Communities and Local Government press release:
So why is the “Pay to Stay” bad for Private Rented Sector?
Housing Associations can now charge full market rent to tenants who have a household income in excess of £30,000 per annum, the very same tenants the Private Rented Sector (PRS) is looking to attract, but which is more appealing to a tenant a private landlord or a Housing Association?
My guess would be a Housing Association is the more attractive option for a host of reasons but the most obvious being:
- Tenants will be able to buy their Housing Association property after just 3 years with a 35% discount if it’s house and a 50% discount on a flat
So for professional working tenants currently renting from a PRS landlord making the switch to a Housing Association landlord makes sound financial sense.
Next question where are all the low income and tenants in receipt of benefits going to be housed?
You can also read about other ways Government Attacks Private Rented Sector