The government is planning to introduce a new housing policy which aims to restrict social housing to the neediest. After receiving many criticisms, the ministers decided to taper on how the policy, dubbed as "Pay to Stay," will be implemented.
The policy was announced in last year's budget, a plan created by Chancellor George Osborne which will require tenants to pay the market rental rate when their annual income exceeds £30,000 (£40,000 in London). This, however, will result in about 60,000 households being forced out of their homes.
The Local Government Association said that the pay to stay policy is unfair especially for families who are working hard, while Labour and crossbench peers said it is ill-thought-out, The Guardian reported.
Now, amid warnings, the government came up with a new compromise measure. As reported by Financial Times, the rents will be introduced gradually to the tenants so that those who are earning more than £30,000 will see only a modest rental price increases. The full market rental price will only be imposed to households with more than £50,000 earnings per year.
The U.K. government remains firm with the principle that it is not fair for the taxpayers' money to be supporting the lifestyle of those who are earning above average income while they live in social housing.
"Pay to stay better reflects tenants' ability to pay, while those who genuinely need support will continue to receive it," said a spokesman for the Department of Communities and Local Government via Financial Times. "Government has consulted on options for a taper, which if introduced could allow rents to rise gradually in relation to income."
The income to be generated from extra rent are planned to be used on building new housing units. According to the report, there are 350,000 social housing tenants with more than £30,000 annual income and over 40,000 of which are said to be earning £50,000 above.
