This report was commissioned by the London Borough of Islington to examine the potential effects of the introduction of a new form of affordable housing, which is to be known as Affordable Rent (AR).
AR is designed to replace social rented properties let at target rents and on secure tenancies. It will be let on tenancies of circa five years, with the property potentially then relet to another tenant if the incumbent is deemed no longer in need. More importantly, the rent will be set at “up to 80% of market rents”. The policy will cover new build properties and up to 50% of relets. Under current policy conditions, “full” Housing Benefit will cover the rent irrespective of what level it is set at, minimising the impact (although it should be noted that a significant minority of new social housing tenants are in work and/or not in receipt of state aid). However, from 2013 the Government will introduce a household benefit cap set at the national average wage; those with benefit allocations exceeding this level will see their income docked by the excess, and many may not be able to make up the shortfall.
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