Government must delay ‘shambles’ Pay to Stay

Thousands of Council tenants could face just weeks’ notice of rent hikes of more than 300% unless the Government delays its changes to force working families in Council housing to pay more, Hackney Council has warned.

Families with a household income of more than £40,000 – such as two newly qualified nurses or primary school teachers – will have to pay extra rent to remain in their Council homes under new ‘Pay to Stay’ rules set out in the Housing and Planning Act.

These rent increases are due to be introduced in April, but the Government has still not set out how the system will work or how rent will be collected – leaving the Council just a few months to write to around 20,000 people living in Council housing to ask what their income is, calculate increases and give affected residents notice.

That could leave families facing little time to adjust household finances to pay any increase – and under the Government’s rules, if a tenant does not respond to a request for information about their income, councils may be forced to increase their rent to market level.

For an average two-bedroom property in Hackney, that could mean an increase of more than three times from Council rent of £99.25 per week to market rent of £302.33 per week.

With no system or IT infrastructure put in place by the Government, Hackney Council is calling for ministers to delay the implementation of the policy for a year to minimise the risk of errors that could leave families paying large increases they should not have to.

Philip Glanville, Mayor of Hackney
Not only is this tenant tax a damaging policy that will penalise low-paid working families, it is at risk of becoming a shambles as ministers rush to bring these changes without any idea of how the system will work.

That could leave Council tenants already struggling to make ends meet facing a bureaucratic nightmare and the threat of huge increases in their rent with just a few weeks’ notice.

The Government simply cannot allow that to happen. At the very least, it should delay this unravelling policy for a year and put the proper measures in place to make sure families pay no more than they have to.

The Housing and Planning Act will do nothing to ease London’s housing crisis or help those struggling to find a truly affordable place to live. That’s why I marched, campaigned and spoke out against it in Parliament, and we will continue to monitor its impact on residents in Hackney.
Philip Glanville, Mayor of Hackney

Council officers have repeatedly set out the challenges and concerns of implementing the policy by April to ministers and civil servants. The Department for Communities and Local Government has not responded to a letter sent in June which put the Council’s concerns in writing.

The additional rent tenants will have to pay through the new Pay to Stay rules will be handed to the Government to pay off the national debt.

The full details are not yet confirmed, but it's expected that for every pound a household earns over £40,000, they will pay 15p a year more in rent, up to a cap based on market rate. Hackney Council fears rushing this system in by April could lead to errors in calculating the right amount tenants should pay.

The Housing and Planning Act became law in May. As well as the new Pay to Stay rules, it includes the extension of Right to Buy to housing association tenants, funded by the sale of Council homes – which could force Hackney Council to sell up to 700 Council homes over the next five years.