Radical proposals which would effectively end housing subsidy in almost everywhere bar the south east are to be published by a government-backed inquiry into the future of social housing
One of the government's closest advisers, Professor John Hills, was commissioned by the Institute of Public Policy Research to devise a new system for financing housing, as part of its inquiry into housing.

His proposals to be published next week are divided into far-reaching reforms to existing arrangements or a complete overhaul of the current system.

His overhaul would effectively end housing subsidy to all but the high cost areas.

Previewing the proposals at the National Housing Federation's chief executive conference Hills said: "The case for much subsidy in economic terms in low and medium costs parts of the country is really quite weak. The strong case for significant subsidy are about enabling people to afford housing in parts of the country where land costs are high."

Hills, who is director of the Centre for Analysis of Social Exclusion, revealed that his paper will propose phasing out subsidy in low and medium cost areas, forcing landlords to compete in the market. At the same time there would be a flat rate allowance within the housing benefit system to encourage people to shop around. Existing tenants would be protected by giving them an equity share in their properties.

Under the system landlords would get a relatively high return on their properties only if the value of their homes was above the national average.

He claimed that if the current housing benefit arrangements were left in place, without shopping incentives, "we would end up with the equivalent of 3.5 million black and white TVs. You cannot run an element of tenant choice at the same time as saying we will pay the bill whatever it is."

Hills claimed that the demolition of new unlet houses in Newcastle was only the tip of the iceberg, "the large part of the iceberg is giving public subsidy to housing associations to build homes that people would not otherwise choose to live in."

His reforms to existing arrangements include introducing so-called "fuzzy tenure" arrangements for more flexible shared ownership options "to allow people to get into housing markets without becoming owner occupiers."

He also proposes putting all local authority housing on the same footing as housing associations.

Source

Housing Today