How affordable is the affordable rent model?
The government’s plans to introduce the affordable rent model will have a big impact, both on East Thames and our residents. The affordable rent model changes the types of tenancies we offer, the rents we charge and the funding we receive.
The affordable rent model allows registered social landlords like East Thames to charge up to 80% market rents for some of our homes, that’s considerably more expensive than existing social rents, which are at around 30%.
In Newham, changing rent from the existing social rent to the new affordable model could increase a household’s weekly rent by between £44 for a one bed property and up to £233 more for a three bed property. Our existing residents won’t be affected by this change, affordable rent will only be applied to a percentage of our re-lets and some of our new properties. However, before implementing the new model, it’s important that we understand what impact increased rents would have on potential residents in the areas where we operate.
For this reason we carried out research and modelling for each borough we work in to find out what an average family living in east London could afford. Newham salaries, for instance, are among the lowest in London, while rents are third highest in east London, after Tower Hamlets and Hackney. Our research tells us that 44% of Newham households would be unable to reasonably afford a two bed property at 80% of market rent, while 65% would be unable to afford a three bed property at that level..
This research will inform how and where we implement affordable rents and we are currently working with housing teams in each local authority to agree our plans. However, we do know that in order to keep family sized housing within reach of the average family, the affordable rent model will be applied predominantly to one and two bedroom re-let properties, rather than larger homes.
Read the outcomes of our research here:
Impact of the affordable rent model - Newham (438KB PDF)
Impact of the affordable rent model - Havering (438KB PDF)
Impact of the affordable rent model - Tower Hamlets (438KB PDF)
Impact of the affordable rent model - Redbridge (438KB PDF)
Impact of the affordable rent model - Barking and Dagenham (438KB PDF)
Impact of the affordable rent model - Waltham Forest (438KB PDF)