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Hexagon responds to Government's consultation

Hexagon has compiled a detailed response to a Government consultation paper called “Local decisions: a fairer future for social housing.” The paper sets out a large number of changes which would affect the way social housing works but the main controversial points cover:
• allowing social landlords to grant fixed term tenancies – of 2 years or more – instead of assured or secure tenancies
• allowing housing associations who are developing new homes to charge so called “affordable rents” of up to 80% of the market rents in order to generate more income to pay for the new homes (as there will be only a very small amount of Government grant available)

The Government is anxious that current social housing tenants would be protected from losing their security of tenure. Existing tenants will keep their current form of tenancy even if they move. It is not proposed to change the basis of charging rent for existing tenants who continue to live in their current home but if an existing tenant moves, they may have to pay one of the new “affordable rents.” Once these provisions are introduced, which we expect they will be as the legislation has already been put before Parliament, new social housing tenants moving into homes owned by developing housing association may find that they are facing much higher rents and some may find that their landlords will only offer them a fixed term tenancy, but we don’t yet know how many.

If housing associations want to continue to build new homes – which we at Hexagon want to do – then we will have to charge much higher rents to the majority of people accepting a tenancy. Rents at 80% of the market are on average more than twice the level of our current rents. We are currently working out how much income we would achieve from rents at this level and how many homes this would build.

However, we do not have to offer fixed term tenancies and if we do, we can decide on the length of tenancy and the criteria for renewing it on expiry, although we will be expected to take into account the view of the local authority which will have to develop an overall policy for their area on tenancies. Hexagon’s Board will ultimately be making the decision on what Hexagon decides to do and will consider views from staff and residents before making a final decision.

There are in addition other proposals in the consultation paper which affect social housing tenants. The Government’s timetable for consultation did not allow us to consult our residents as we would normally do for such an important matter. Our full response can be downloaded here.