Housing Reforms May See Thousands Priced Out
Reforms of council housing in England could see thousands of low income workers being priced out of their homes. The Labour Party says the Government’s Housing Bill will penalise nurses, teachers, manual workers and shop assistants because their incomes are higher than a Government threshold for subsidised housing.
If the reform, called Pay To Stay, becomes law, tenants whose household income is more than £30,000 or £40,000 in London, would have their rent increased to match the private sector.
The Government says it is unfair for high earners to have council homes, but Labour say it will hit low and middle income families too.
Eszter Solyom is a special needs teacher. Her husband works in a department store.
They and their two children live in a ninth floor, two bedroom maisonette in London.
Their combined income is just above the Government’s £40,000 limit.
They pay £800 a month to Islington Council, but if the rent was to be raised in line with the equivalent for a private sector property, they could face a monthly bill of up to £2,500 a month.
She told Sky News: “We couldn’t afford to pay higher. We are just making ends meet.
“We get by, but if that changed we would be forced to move out and I don’t even know what would be the alternative.”
The Government believes the measure will encourage people to buy property, but Mrs Solyom laughed when asked if she could afford to buy her maisonette, which is valued at more than £400,000.
“How would we afford that? It’s impossible,” she said.
Labour’s housing spokesman John Healey said: “George Osborne’s tenant tax will single out working households on modest incomes and hike their rents.
“It’s the tradespeople, service workers and public sector workers who are the backbone of our local economies that are going to be hit hardest.”
Labour claims that two newly-qualified teachers would, on average, have a combined income of £44,500, and a couple working full-time on the so-called “national living wage'”, with a household income of £37,500, could also be affected.
A spokesman for the Department for Communities and Local Government said: “It’s simply not fair that hard-working people are subsidising the lifestyles of those on higher than average incomes, including tens of thousands of households earning £50,000 or more.
“Pay To Stay better reflects tenants’ ability to pay, while those who genuinely need support will continue to receive it.”
The Government estimates that there are 350,000 tenants with household incomes over £30,000 per year.