Mid market rent (MMR) is aimed at providing people on modest incomes with an opportunity to access rented accommodation - does mid market rent for housing associations work? Due to the Scottish Governments consultation outlined further on, more and more housing associations are considering mid market rent tenure in addition to the current options they provide to social tenants on lower incomes.
Grants to support the provision of mid market rent units are currently only available to non-charitable subsidiaries of housing associations as legislation:-
> prohibits housing associations from taking income into account whilst considering priority for or allocating housing; and
> requires social landlords to allocate their housing using a Scottish Secure Tenancy
Currently allocation of ?mid market rent tenure includes some form of income assessment with tenants receiving a Short Assured Tenancy.
As mid market rent tenure is becoming more common as a means of providing rented accommodation to those on modest incomes, the Scottish Government is considering amending the current legislation so that housing associations can provide MMR directly to tenants. One proposal in the Scottish Government Consultation on Affordable Housing is to remove the current prohibitions to provide social landlords greater flexibility to provide MMR through the use of Short Scottish Secure tenancies. This proposal would not exclude people from applying for housing or joining a list for social housing based on their income.
Consideration of income might help social landlords direct people to suitable housing by clarifying the range of options open to each applicant and might help reduce demand for affordable rented housing from people who could afford lower market prices.
The consultation concluded on 30th April 2012 and the non-confidential responses were published, with the majority agreeing with the proposed reforms. However concerns were raised in relation to:-
- provision of MMR through SSST as this may blur the boundaries between social landlords and private landlords; and
- the impact operating MMR may have on RSL's charitable status.
The responses received will shape the core of a Housing Bill intended for 2013. Due to the current economic climate we would welcome any extension of social landlord's right to provide additional accommodation to those on low incomes.
If you would like advice on mid market rent please do not hesitate to contact a member of our commercial team who would be happy to assist.
