Now that the Government has confirmed that the Affordable Rent (AR) programme will be extended from 2018 to 2020, it seems timely to review the outcomes of our AR programme since its introduction in 2011.
It is now widely acknowledged that AR is anything but affordable, and particularly inappropriate for our traditional benefit dependent client group.
From the outset the Group decided to prioritise working households for AR, and to mirror the arrangements we have for Intermediate Rent (IR) properties, in recognition of the close similarity between both tenures. Consequently, all AR homes are fitted with white goods and, as a result, we take an inventory at the start and end of the tenancy and require two references, usually from an employer and a landlord, for which there is an administration fee of £130.00. We also require four weeks rent as deposit and all AR tenancies are fixed five year tenancies with a probationary year at the beginning.
Three years on, how has it worked so far? We are very pleased to report that we have achieved our primary objective of housing working households on lower incomes – the average household income for London is only £25,331 p.a. and the average in the outer South East is only £20,171 p.a. It is abundantly clear that these households could not afford to buy in London and the South East, and it is highly unlikely that they would qualify for social housing.
Where have these households come from? At 43% of the stock, the majority have come from the private rent sector, where rents are at least 20% higher, the quality of accommodation is not as good as ours, and any semblance of a management service is non-existent.
While we have prioritised working households we have not excluded applicants on benefits who can comply with our tenancy sustainability measures, and we have allocated 13% of the AR stock to this needs group.
Our approach to AR offers applicants rent so they have the opportunity to save for a mortgage, stability in terms of a five year fixed-term tenancy, high quality accommodation, and a responsive management service. In every sense it is a high quality product for the much neglected ‘squeezed middle’ in the Southern property market.