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Three cheers for tenancy reform

The Coalition Government has approved plans to reform council housing which include the reform measures outlined in the LGiU’s joint report with Westminster council, Room to Move, in September 2009. This is welcome.

In Room to Move the LGiU suggested offering a mixed economy of tenure with regular reviews to new council housing tenants. The coalition has similarly adopted a policy which applies to new tenants only. The proposed coalition reforms (as reported) comply with the LGiU vision of flexible and modern social housing provision.

There are many problems with the existing provision of housing to poorer citizens.

  1.  Reduced Labour Mobility: Individuals given a tenancy for life in areas with low levels of employment have little incentive to move to areas with employment opportunities because they will lose their council house.
  2. Absurd anomalies: Some tenants are paid very high levels of housing support to find appropriate housing within expensive boroughs which is a waste of public resources when they could find less expensive accommodation in other areas.
  3. Massive spare capacity: Individuals granted a council house with enough room to accommodate their young families continue to occupy these homes when their children have moved out. There are genuine cases of widowers occupying three to five bedroom houses.
  4. Huge waiting lists: While some of those on the council housing ladder sometimes have more space than they need young families with children can languish for years on the waiting list. 354,000 households in London alone are on the waiting list.
  5. Life tenancy does not adapt to changing life circumstances: Individuals who obtained council housing when they were poor continue to maintain a right to occupy it when they obtain wealth at absurdly low rents. Council tenancy for life takes no account of changing life circumstances. It does not require newly wealthy council tenants to pay more rent or move out to free up space.

The policy of ending council house tenancy for life is very radical but entirely correct. It will not be popular but reformers from all sides should support it. Reports suggest that Blairite Caroline Flint, former Labour Housing Minister suggested a similar reform but had the proposal vetoed. Mrs Flint suggested that new council tenants be given fixed term tenancies with reviews every three or four years. If tenant’s financial position improved they would face possible rent increases. Reformers from each of the major parties agree there is a need to change tenancy for life.  It is encouraging that the coalition are keen to be radical in this area.

A system in which individuals are paid a sum of money based on their need is – I believe – preferable to fixed council housing because it could easily be adapted according to the individuals changed circumstances. However, the provision of council housing on a short term basis with regular reviews is an improvement on tenancy for life.  

This policy is not a silver bullet. It will not solve every housing problem. Britain needs to build more housing to accommodate an increasing and more atomised population. Standards in housing at the bottom end of the price scale need to be improved. However, I have interviewed individuals occupying houses with multiple spare rooms, while other families in desperate need languish on the waiting list. I have friends who rent prime real estate in London on absurdly low rent because their partners inherited the right to live in that house forever. I cannot help but support these proposals as they will remove the current absurdities from the system.

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One Response to Three cheers for tenancy reform

  1. vince riviere says:

    How would this sit with the current right to buy policy. If for example a tenant who was once sufficiently “poor” to qualify for a council house and has now come into “sudden” wealth, say a lottery win or an inheritance , would they not then not only be entitled but also be in a position to exercise the right to immediately purchase their council house?
    Would the discount be means tested?
    They would be in a position to by pass any means test used to determine the length of the tenancy simply by purchasing.
    It is the poorer ones who would be affected by limited terms on their lease.
    The argument for means testing at regular intervals is flawed.