Equity stakes must be tailored to local needs, says think tank

A single national system to reward social housing tenants with a stake in their home would be impractical, an influential inquiry has decided.

The news will disappoint a sector eager for direction since the notion of equity stakes for social tenants appeared in the Labour party election manifesto last year.

However, four possible models, which landlords could choose from according to their circumstances, were proposed yesterday at the Chartered Institute of Housing's annual conference in Harrogate (see factfile below).

Left-leaning think tank the Institute for Public Policy Research joined forces with the Chartered Institute of Housing last year to research ways to fulfil the government's pledge.

IPPR associate director Sue Regan told Housing Today: "What came across very strongly is that there's a lot of thinking on this but local circumstances are so different that we feel that you need to have a lot of local discretion on an equity stake model.

"It's not very satisfactory in terms of a big message from the government, but it's useful in terms of what works best for tenants and landlords."

Regan said four models had emerged as favourites when the original idea of using a nationwide system proved too problematic.

This was because differing house prices, often in the same neighbourhoods, would leave some tenants thinking they had got a worse deal than others, Regan explained. But, she said, a single model could work in regeneration areas, where house prices were set to rise.

During the inquiry, it was found that both landlords and tenants found it hard to see the benefits of schemes where money was used for community investment.

The most popular way of meeting these objectives was for social landlords to set up savings accounts for their tenants that would be linked to their tenancies.

This would help government plans to increase the number of low income families with financial services while providing a service that was easy to understand the benefits of, Regan said.

But even this would not be the only solution, she warned: "There's been confusion around the debate as to whether equity stakes can be the answer to everything. They can be part of an arsenal of schemes and initiatives, but they cannot solve everything."