New rents may end BME independence

The survey by the homelessness charity's research arm found nearly 80 per cent of BME chiefs believe rent restructuring will definitely make their organisation less able to deliver housing and "other essential services".

And 59 per cent said they might not be able to carry on as independent associations. Some 32 per cent said they only would consider partnerships with other BME organisations, while 18 per cent said their best option would be to merge with a mainstream association.

The results show that 45 per cent of those questioned "couldn't promise" they would be able to carry on as an independent BME association. Fourteen per cent said "definitely not", and four per cent said they would see being taken over as one alternative. Thirty-two per cent said they would look at joining a group structure.

The controversial rent reform is set to begin in April next year, though RSLs have 10 years to implement the new formulae fully. But BME associations are particularly vulnerable to the new system that links rent to property values and earnings.

With smaller capital reserves and more expensive loans to service, BME associations have traditionally charged higher rents, meaning any drop in rental income will hit resources hard.

Speaking at the National Housing Federation annual conference in Birmingham last month, housing minister Lord Falconer announced he would review the impact on BME landlords. "BME housing needs to be given a much higher priority than previously," he said (Housing Today, 27 September).

This summer, the Housing Corporation regulation director for the new rent regime, Derek King, hinted at the possibility of the quango helping BME landlords pay off private loans (Housing Today, 19 July).

He said: "There is no pot of gold currently available. But if there turns out to be a necessity or a desire then a case will be made."