At a meeting on Wednesday, Preston-based Progress Group planned to press the government and Housing Corporation to exempt it from the rent restructuring rules.
It said its schemes, which are entirely privately funded, cannot work on drastically diminished rents. Private sector providers, which are not subject to regulation or rent controls, are preparing to step in and fill the gap, it warned.
Progress has Nationwide loans worth £30m available for new supported schemes and demand for supported housing is high. But it says it needs a government concession that will work in the longer term.
It is asking the Office of the Deputy Prime Minister to ignore the element within rents that repays debt, when calculating restructuring targets that limit rent increases to inflation plus 0.5%. Other elements, principally management and maintenance costs, would still have to hit the target.
The corporation has granted Progress an exemption for its existing schemes, which mainly house adults with learning difficulties and other vulnerable tenants.
Rents are generally more than £100 a week, met through housing benefit, but target rents can be as low as £50.
Target rents on these Progress schemes will be met over a much longer period than the 10 years normally allowed.
The group has set up an unregistered subsidiary, Progress Supported Housing, to take its supported stock through leasing arrangements.
It is not subject to rent restrictions but the arrangement involves extra costs.
Progress Group chief executive Russell Atkinson said: "We would be happy with a very specific and tightly drawn exemption. But if we do not get it, we will go out of this business because there is no way we can make it work.
"If we are not careful, the most vulnerable people in society, whom the housing movement should regard as most precious, will fall into the hands of the private sector."
Source
Housing Today
No comments yet