Rent reduction expected for housing association tenants

government is expected to announce modest rent reductions for around two million housing association tenants

The government is expected to announce modest rent reductions for around two million housing association tenants, despite a survey of tenants showing that most are against a rent cut.

 The associations – the main providers of social housing – fear that such cuts will lead to a sharp fall in the level of affordable house building because they will be unable to raise the necessary loans for new building. 

But ministers are determined to press ahead with the first ever rents cut, despite an opinion poll by the National Housing Federation (NHF), which represents the associations, showing that almost 70 per cent of tenants do not want a reduction. 

The NHF says that even a small cut will reduce their income, already well down as a result of the recession, by millions of pounds. NHF chairman, David Orr, said: ‘Faced with such a shortfall, associations could be forced into cutting back dramatically on the key services tenants really value, such as anti-social behaviour programmes, job training schemes and education initiatives.’

Housing associations, which have raised around £52bn of private finance over the past 20 years, with the government providing an additional £40bn, are targeted to build around 45,000 homes this year – and more in 2009-10.

But they have also been hit by the recession because thousands of homes they built for sale, to subsidise social housing, have been left empty for long periods as mortgages dried up.