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Housing Associations (Rents)

Volume 124: debated on Wednesday 9 December 1987

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12.

To ask the Secretary of State for Scotland if he will estimate the increase in rents for housing association dwellings arising from immediate enactment of the proposals in the Scottish housing White Paper.

Our White Paper proposals would make tenancy arrangements more flexible for new lettings and enable housing associations to set appropriate levels of rent, depending on the funding arrangements agreed. Our proposals envisage that subsidy arrangements for new developments would be geared to rent levels which average working households in a particular area could pay.

That reply is at some distance from frankness. In my constituency the rents on a rehabilitated, typical 16-unit tenement, at the 30 per cent. housing action grant level, would go up by 225 per cent., and at the 70 per cent. housing action grant level would go up by over 100 per cent. Is the Minister aware that that is typical of the rent increase that will occur in the west of Scotland? Does the Minister agree with that statement?

No, Sir. What I would say is that there are some housing associations where private sector funding is, not likely; for example, certain kinds of housing for disabled associations and special interest groups. It is tremendously important that traditional clients should continue to be catered for. I envisage that 100 per cent. public funding could come from a combination of housing association grants and loans, but we envisage the private sector coming in in other circumstances.

What can my hon. Friend tell the House about the historic level of rents in Scotland, compared to that in England, bearing in mind that the average income in Scotland is now the second highest in the United Kingdom, second only to London?

Average rent levels in Scotland are lower than those in England; there is no question about that.

Since housing association rents are already 30 per cent. higher than council rents in Scotland, what possible justification can there be for a formula which is likely to double the rents of housing association tenants in Scotland? Since housing benefit will not protect all the tenants who are the hardest hit by the new mechanism, is it not yet another example of ministerial weasel words for such a mechanism to be described as affordable rents?

It most certainly is Government policy that rents should be affordable and within the reach of tenants. I reject the figures that the hon. Gentleman gave. I cannot speculate about the rent levels for individual lettings, but under the new arrangements rents will relate to the cost of providing and maintaining property, taking account of the assistance available. Housing associations will continue to meet the needs of their traditional clients.