Commenting on today’s announcement from the Housing Minister, Brandon Lewis, that Pay to Stay will now be voluntary for housing associations, Chris Wilson, head of social housing at KPMG, says:
“The U-turn on Pay to Stay will undoubtedly be welcomed by the housing association sector as a step towards deregulation. However, the change from compulsory to voluntary arrangements is unlikely to greatly impact implementation, with it expected that most associations will put Pay to Stay in place anyway. By doing so, they will be able to generate extra income to build more homes or shore up under-funded services, lightening some of the burden resulting from the 1% rent reduction.
“However, what can be hoped is that the voluntary nature of the arrangement will result in a more insightful implementation. As per Pay to Stay limits, to earn £40,000 in London cannot be classed as being a high wage earner, with the affordability of £30,000 ‘elsewhere’ being hugely dependent on where that ‘elsewhere’ is. For example, our research shows that someone would have to earn £77,000 in London, £40,000 in the East of England or £24,000 in the North East to be able to buy a first time buyer home, demonstrating the huge differences in affordability of home ownership, which is what is behind many Government policies.
“However, with housing associations able to make the choice and use their knowledge of their communities and tenants, we can hope for the fairest implementation of Pay to Stay, and that it will be done in a way that balances income generation with social purpose. Unfortunately, for council tenants, the picture is different as Pay to Stay is still compulsory – a concerning disconnect which creates a ‘lottery’ for tenants, for whom their landlord is seldom a choice.”
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