Question of the Day (42)

Why do some Housing Associations, insist on affordability checks, before signing up a potential tenant, nominated via a housing list,  for a so called affordable rent property? 

Just asking…..

Good question. Do they refuse people who are in receipt of, say, income-based JSA?

This is not something I’ve come across much but I did assist someone recently who the HA were on the verge of refusing a tenancy to because they were unhappy about her receiving just reduced rate of ESA as being sanctioned.  I suggested she comply with the relevant DWP requirement which was done on the same day and HA accepted her on assessment rate ESA, even though it wouldn’t be increased to that for a further 4 weeks.  So that HA at least seemed OK to accept someone as long as receiving basic rate of income related benefit.

PS: not trying to support the policy just providing info

It seems to me that HAs are in the unfortunate position of having to try and assess whether, in these days of benefit-caps, bedroom tax etc, prospective tenants are going to be able to pay the rent in the long term. It is unsustainable for business reasons for a HA to carry high levels of rent arrears, and the cost of court action also has to be considered.

In addition, the move away from direct payments of HB toward tenants taking responsibility for paying their own rent under UC has caused consternation amongst housing providers, as many tenants have a proven track record of failing to meet rent payments.

Further, right to buy and the 1% rent cut over the next 4 years are big blows to the finances of HAs, and we expect to see mergers, closures etc over the coming years. (It could be argued that this is all deliberately intended to drive social lanldords out of business, given the government’s well attested lack of interest in social housing).

In essence, HAs etc are just looking after their own interests in a hostile environment.

It’s sad, and historically it would have been indefensible, that housing which is broadly affordable may not be so for everyone. The cuts to benefit levels and entitlement have, together with rent increases which have outstripped benefit upratings created this situation. It’s to no one’s advantage if someone takes on a property and isn’t left with enough money to feed, clothe and heat themselves and their family. That creates invidious choices and, frequently, paying the rent is not the top priority.

It’s a situation that, thanks to the benefit cap, is almost unavoidable for families with four children and is rapidly working its way down family sizes. We do quite a lot of affordability modelling for social landlords, where we look at potential rent levels for the next five years and match them against family situations, tax and benefits and various earnings levels. From that, for many landlords, it is clear that ‘affordability’is being squeezed severely and will be much more so in future.

I can’t blame landlords for wanting to check that before letting properties and an affordability check with an income maximisation element helps the tenant as well. They don’t get trapped into an expensive cycle of either eviction or going without necessities, time after time, and the benefits check may make the property affordable anyway.

This is often seen as a good opportunity for early engagement, identify support needs, offer benefits advice, money advice, and set the tenancy up with the best opportunity to succeed. For first time tenants it is a good chance to go through income and expenditure and ensure all essential costs are being budgeted for.

I couldn’t agree more, and it is the main rationale behind my role! Essentially my job is to maximise income in order to enable tenants to better afford their rent.

This has got to be wrong.

A client waits for a property for many years, on a housing list (1996 part vi) they meet all the criteria of that act, ie they are not excluded for former tenant arrears, anti social behaviour, or having a recent possession order awarded against them. They are allocated a property under the above act which is an affordable rent property, only to have to undergo a new affordability test, which results in them being passed over….in favour of someone in less housing need or who has waited less time.

The reason, they get overlooked…...... it is decided,  they cannot afford a affordable rent…...... 

Just saying.