Government drops compulsory 'pay to stay’ housing plan

The government has announced it has dropped plans to force higher-earning social housing tenants to pay more in rent.

The controversial proposals would have applied to social housing residents in England earning £31,000 or £40,000 for those living in London and received a significant amount of criticism from council leaders and charities. Instead the option will be voluntary.

Housing minister Gavin Barwell also confirmed the government would be ending the right of social housing tenants to stay in their homes for life, by introducing compulsory fixed-term tenancies.

The news means tenancies will be periodically reviewed ‘to ensure tenants still need a socially rented home’, with councils to priorities lower-income householders.

In a written statement, Mr Barwell said the government remained committed to ‘ensuring social housing is occupied by those who need it most’.

He added: "But we need to do so in a way that supports those ordinary working class families who can struggle to get by, and in a way which delivers real savings to the taxpayer. The policy as previously envisaged did not meet those aims."

Responding to the government announcement that Pay to Stay will be voluntary for councils, Lord Porter, Chairman of the Local Government Association, said:

"We have been working hard with the government to make sure it was aware of the difficult, lengthy and costly process in seeking to implement the policy - which was likely to cause anxiety for families and be hugely unpopular with tenants. 

"Making Pay to Stay mandatory would have affected thousands of social housing tenants across the country, with the average affected households seeing their rents rise by £1,065 a year. Councils would have needed to invest millions in new IT systems, hire new staff and write to over a million social housing tenants to try and understand household income and approve individual tenant bills.

"Pay to Stay risked becoming an expensive distraction from our effort to build homes. A renaissance of council housebuilding is needed now more than ever if we are to stand any chance of solving our housing crisis."