Government Rent Reductions Will Not Help Most Tenants , Say Fabrick
Fabrick Housing Group is warning that the first inflation-led rent reduction in living memory will not help 80% of tenants, but will damage the investment being made in communities.
With the retail prices index set to fall below minus 2% in September, the month in which rents for next year are set, Middlesbrough-based Fabrick, which owns 15,000 properties between York and Newcastle believes £1m in savings will have to be found from somewhere.
However, because almost 80% of their tenants receive some form of benefits, the money saved will not come from their pockets, leaving them with no tangible gain from the move.
Fabrick’s core management team met yesterday to discuss the unprecedented reduction, which is expected to be 2% - equivalent to around £1.36 per week, per household.
Chief executive Alison Thain said: “Based upon a 2% reduction, which is what we are expecting, we are going to lose £1million.
"The irony of it is that almost 80% of our tenants are on full or partial housing benefit, so they won’t save a penny. It will be the Treasury which saves the money and the amount it will save will be a drop in the ocean for it.
“We have set up a working group to look at this issue because it is the first time in living memory that we have faced such a reduction.
"We have not seen a 2% drop in building or personnel costs, so we need to work out how best to respond. As well as new homes development, we do a lot of work in neighbourhoods and enhancing communities, so these are all areas likely to have to absorb that £1m blow.”
However, because almost 80% of their tenants receive some form of benefits, the money saved will not come from their pockets, leaving them with no tangible gain from the move.
Fabrick’s core management team met yesterday to discuss the unprecedented reduction, which is expected to be 2% - equivalent to around £1.36 per week, per household.
Chief executive Alison Thain said: “Based upon a 2% reduction, which is what we are expecting, we are going to lose £1million.
"The irony of it is that almost 80% of our tenants are on full or partial housing benefit, so they won’t save a penny. It will be the Treasury which saves the money and the amount it will save will be a drop in the ocean for it.
“We have set up a working group to look at this issue because it is the first time in living memory that we have faced such a reduction.
"We have not seen a 2% drop in building or personnel costs, so we need to work out how best to respond. As well as new homes development, we do a lot of work in neighbourhoods and enhancing communities, so these are all areas likely to have to absorb that £1m blow.”
