29 October 2010
As cutbacks force more families into private rentals the market must adapt, writes Louisa Darian in Inside Housing.
The government’s announcements to cut the social housing budget to £4.4 billion will hit many low earning households. Coupled with already low rates of affordable house building under the previous government, these proposals will mean that more and more low earning families will be forced into unsuitable private rented sector accommodation. Those fortunate enough to be offered a social home will be faced with a much worse deal - shorter tenancies and higher rents.
The coalition is hoping that this new type of tenancy will attract more institutional investment into the social sector - fixed-term contracts will allow for properties to be ‘churned’, enabling an investor to get a return from the sales. At the same time, longer term tenancies than those commonly offered in the PRS will limit potential voids. Housing associations and councils will need to be open and flexible to new funding models.
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