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I keep hearing about housing in the news. What’s going on?

The Conservative Government wants to shake-up Housing and the benefits system in the UK, making sweeping changes that will affect millions of people. Housing providers are even starting to come under attack by the media, having been accused of “public sector lethargy and private sector greed”. However, the reality could not be more different. Despite the challenging times we face, housing providers like North Star are trying harder than ever before to support Tenants like you.

People are talking about a “housing crisis” in London and the South East. Is there a “housing crisis” here?

Yes, but we’re not dealing with the same problems as they are down South. You have probably heard on the news that house prices and rents in London are so high that people are not able to afford to find a home in the city. Up here, the problem is that we have empty housing in areas where people don’t want to live. At the same time there are not enough affordable new homes being built in places where people do want to live. As a result, people in the North are struggling to find the homes they need at a price they can afford.

So what changes are the Government actually trying to make?

There are four main parts to the Government’s planned changes: Right to Buy, Pay to Stay, Welfare Reform and reduced rents.

What is “Right to Buy”?

Right to Buy is a policy which gives certain council tenants the legal right to buy the home they are living in at a discount of up to £77,900. The Right to Buy scheme was first introduced by the Conservative Government in 1980. At the moment most housing association tenants do not have the Right to Buy. However, the Government has plans to extend Right to Buy to more housing association tenants.

Although helpful to some, this is not without its problems – the discount on these homes is paid for using public money, councils will have to sell off their most valuable homes and land to compensate housing associations for the sale of their homes, further reducing public resources.

How Right to Buy will work for Housing Association tenants is not yet known, when we know more about this, we will keep you informed.

Removing them from housing association ownership will reduce the amount of available housing for those in need, at a time when the region is already struggling to meet demand. There are plans to try to build new houses to replace the old ones, but not enough.

What is “Pay to Stay”?

Since 2012 housing associations in England have been allowed to charge higher rents to tenants with an income of £60,000 or more a year. Many housing providers have not taken up this opportunity. We don’t gather information or monitor your incomes, so we don’t have any way of knowing whether you qualify. Also the rent rises for Tenants who are affected would mean many could no longer afford to live in their homes.

As part of the Summer Budget in 2015 the Government announced that in future, social landlords like us would be forced to introduce the ‘pay to stay’ scheme and that new, lower, household income thresholds would be introduced Inside Housing magazine estimates that 11,227 households in the North East could be affected.

We do not know how we are expected to apply this change, when we do know more, we will keep you informed.

I’ve heard all about welfare reform and the changes to the benefits system. Will this affect me?

If you claim benefits including Housing Benefit, Working Tax Credit, Child Tax Credit, Disability Living Allowance, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance (ESA), or Income Support, the chances are you will be affected and your benefits may have already changed.

A Benefit Cap, which sets a limit on the total amount of benefits you can get, means you may lose some of your Housing Benefit if you currently receive more than £20,000 per year. Under the new rules, you can’t appeal against a decision to cap your benefits and you may have to find the money to make up your rent from other income or consider moving to a cheaper home. Housing Benefit will not be available to anyone aged 18 to 21.

For more information on how Welfare Reform may affect contact our Welfare Benefits Officer Andrea Peacock on 03000 11 00 11

I’ve heard I will be paying less rent. Is this true?

Yes. The Government has said that Housing Associations will have to cut the majority of social housing rents by 1% each year for the next four years from April 2016. Chancellor George Osborne believes this will help reduce the country’s housing benefit bill. The cut will apply to the majority of social housing rents, including affordable and social rents. You will receive a letter next spring which will include your rent statement.

This does mean we will have less money to provide services.

How will all this affect my landlord and the services I get?

To make up for receiving less money in rent, North Star have to save more than £6million over the next 5 years. This unfortunately means we have less money to spend on delivering services for our tenants, so you are likely to see some changes to the services we provide. We are trying to minimise the impact to tenants, by making savings to the way we run the business, however, we can not make all the savings needed this way.

When the changes come in there will be significant changes to be made. Such examples at present are;

  • Reducing our annual staffing budget by £228,500 by not renewing fixed term contracts and reducing the number of apprentices
  • Reducing professional fees by £97,000

When more information is available we will let you know.

For more information about the changes, contact North Star on 03000 11 00 11