Warning on ‘pay to stay’ rent rises

MORE THAN 70,000 social housing tenants could face average rent rises of £1,000 a year unless Ministers back down on controversial new “pay to stay” rules, according to councils.

The Local Government Association expressed concern at the changes being brought in next April, which will place households in the “high income” bracket if they have combined earnings of £31,000 outside London, and £40,000 in the capital.

Every £1 that such households earn above the threshold will result in a 15p hike in rents, with LGA calculating this will hit 70,255 dwellings, triggering an average annual rent rise of £1,065.

Average monthly rents for households affected will go up by £132 in London, and £72 outside the capital.

The LGA, which represents more than 370 councils across England and Wales, also warned about the “significant” administration costs of the scheme which will generate revenues of £75m a year, rather than the £365m originally forecast by the Government.

Councillors claimed the changes will mean a couple earning above £15,500 a year each outside London will be classed as being in the “high income” bracket and forced to pay close to market rent rates.