FTSE 100: 6399.73 ▲ 27.40 (0.43%)
The government has confirmed plans to place council tenants in the homes of older people going into residential care, in an attempt to boost Britain's housing stock.Current plans for long term care reform would leave a number of properties empty and local authorities are discussing whether the empty properties could be used to house council tenants in their boroughs.
A source with links to Westminster said the idea was being discussed at a ‘high level of government’ and that ‘it was being considered’ as a way to improve social housing stocks.
‘It is difficult to oppose it in the situation where you have homeless people and housing sitting empty,’ he said.
A spokeswoman for the Department of Health, which is overseeing the care reforms, confirmed that it was considering a scheme that would allow elderly people to rent out their property, or even sell it, when they go into care but no details have been set out and any scheme would ‘be entirely voluntary’.
The discussions come after the government has confirmed that along with a £75,000 cap on care and an increase in the means-test threshold to £123,000, no older person will be forced to sell their home to pay for care.
Instead, from 2015, local authorities will offer loans – called a deferred payment scheme (DPS) – using the property as collateral which will be paid back on the death of the homeowner.
The government is keen to use current care reforms to help boost the stock of social housing in the UK.
Councils have been tasked with reducing the number of empty homes in their local areas, but allowing people to keep homes empty after the owners go into care ‘means more empty homes which goes against policy’, said the spokeswoman.
The source said that there was a stumbling block in the government’s plan over who would pay for the maintenance of any private property with social housing tenants.
A private landlord with council tenants is responsible for the upkeep of the property and for any repairs needed, but if the homeowner is in care they would be unable to respond to tenant requests.
‘There is a question about how you maintain the properties which is a big issue because who is responsible for maintaining it?’ said the source.
Each year 40,000 people who are not entitled to state help sell their homes to pay for care and the DPS is designed to prevent this from happening. There is already a loan scheme similar to the DPS run by some councils although the loans are interest free and under the DPS interest would be levied. The rate of interest is yet to be determined and it is unclear whether the rate will be set by the local authority or by the government.