Private rented housing is “out of reach” for under 35s, says the Chartered Institute of Housing

The Chartered Institute of Housing (CIH) recently carried out research into the gap between rents in the private rented sector and what Local Housing Allowance (LHA) will pay.

LHA is based on the 30th centile of the range rents charged in the private rented sector. Except it isn’t. That was how it was supposed to be (having previously been reduced from there 50th centile). In fact, the level of payment has been frozen for three years and will be frozen until 2019/20. LHA no longer reflects in any way the reality of rents in a locality.

In Brighton and Hove the rates are £82.66 for a room in a shared house, £153.02 for a one bed flat, £192.48 for a two bed property. The average one bed flat in Brighton and Hove is now £971 per month compared to LHA of £612.08 for the same period.

In Eastbourne the rates are £67.00, £116.53 and £151.50, and in Hastings £69.77, £92.06 and £120.29. (There are higher rates for 3 and 4 properties).

It is worse for you if you are under 35 where you are restricted to claiming LHA for just a room in a shared house.

And if you think it is bad for under 35s, it is EVEN worse for those under 21 for whom the rate is zero (unless you are ‘lucky’ enough to qualify for one of several exemptions – merely being a rough sleeper is not enough).

So what has the CIH found? It has found that the gap between LHA and rents has widened to the point where private rented housing is “out of reach” for under 35s.

A couple of weeks ago I wrote how the senior civil servant responsible for housing policy at the Department for Work and Pensions, Darrell Smith, said that the government is now going to use LHA rates to set new, lower rents for specialist supported housing. Why? Because it is such a good barometer for the market? No. He said: “The one advantage of (LHA rates) is that they are already there, so it doesn’t cost the government anything to set it up. I know”, he continued, “that isn’t a great answer but that’s all I have got”.

Overly strict enforcement of regulations can lead to homelessness

This is the text of a letter I had published in today’s Brighton Argus (14th April 2017) in response to, and in support of, a letter from Mike Stimpson from the Southern Landlords Association who warned that the uncritical enforcement of regulations would result in an increase in rough sleeping

When someone speaks who has as much housing experience as Mike Stimpson from the Southern Landlords Association, we would be wise to listen. Few individuals have such in-depth knowledge, and he is one of the few landlords who will still accommodate people on the lowest incomes.

In his letter of 13th April 2017 he warns that a consequence of the enforcement of regulations relating to houses in multiple occupation will lead to more people becoming street homeless. We should all sit up and listen.

Regardless of what one might think of housing being provided through private landlords, the reality is that almost four times as many homes are let in this way compared to those provided by the City Council and housing associations. With spiralling house prices, fewer local people will be able to buy in the years ahead. We must work with private landlords to make sure housing need in the city is being met.

At the same time, Cllr Tracey Hill is attempting to ensure that family homes for rent are not lost. She rightly wants to avoid whole areas becoming blighted by studentification with small family homes being turned into accommodation for six or seven students.

Her efforts in this regard are to be applauded and should be seen as a challenge to our two universities where not enough accommodation is provided to houses the ever-increasing student population in the city. Whether we can reverse what already has happened is unlikely.

If there is an issue of a lack of basic amenities, fire risks and overcrowding, then enforcement action should be taken. Enforcement is right in some cases, but not in cases where there is cooperation by the landlords and where standards are marginally below what we would ideally like.

This week I heard of enforcement action being against a property that has been let as four bedsits since the early 1960s. I don’t know the property myself, but the provision of such accommodation is essential for someone’s housing journey. I myself once rented a property which falls beneath current minimum space requirements, but small though it was, it was my home and I was happy there.

The simplest way to avoid council houses for families being lost and becoming houses in multiple occupation is by ending the Right to Buy, and not extending it even further to housing association homes. One in four, and some studies suggest one in three, former council homes are now in the private rented sector charging rents four times greater than the previous council rents. How many of these homes in Brighton and Hove, are now let to students?

Shared housing is all that is affordable for many, and the only form of accommodation for which those under 35 can claim housing benefit. I am a harsh critic of government housing policy, but while it remains as it is, we need to ensure that there is a balanced provision of homes.

We need to get this right, and the City Council could do worse that having a very early meeting with Mike Stimpson to find a way forward.

House Price Disaster Forecast

House prices will leap more than £50,000 higher by 2021 on average despite Brexit uncertainty, with the average UK house price in 2017 will be £220,000, marking a £9,000 increase compared with 2016, according to the Centre for Economics and Business Research (Cebr).

By 2021, the average home is set to be worth around £272,000, its report predicts – a £52,000 increase compared with 2017. No doubt house prices in Brighton and Hove will increase by more.

In some quarters this is seen as good news. I think it is a disaster. The housing market is completely out of control. The only ones who will be able to afford homes in Brighton and Hove will be the rich and the very rich.

As someone said to me last week, the market in Brighton is a national and an international one. Housing need is local.

Last Wednesday I spoke at the Chamber of Commerce Construction Voices event. At it I said: “With each new administration on the local council, there has been an element of ‘optimism bias’, believing that they will be the ones to turn things around. Yet many major projects have failed, since as early as the 1970s, to get off the ground. Unless we massively increase the supply of affordable homes, unless we have greater imagination and perhaps new partnerships, we will not meet the housing needs of local people, and Brighton and Hove could slip into becoming a dormitory town with the creative minds looking elsewhere to flourish and grown. How long will it be before Hastings takes over from Brighton?”

Please support the Fabulous Four running the Brighton Marathon for BHT

There are four amazing people running the Brighton Marathon for First Base Day Centre this Sunday:  Melanie Atkinson, Tony Felstead, Benny Coxhill and Andrew Westhead Please click here, here, here and here for their JustGiving pages.

Our thanks to Creative Benefits who are sponsoring our running vests.

Is this the most depressing, mind-boggling, ridiculous justification ever from government?

The government announced in late 2015 that the rents that specialist supported housing services could charge and be paid for through housing benefit / Universal Credit would, from April 2019, be capped at Local Housing Allowance (LHA) rates. This move has been widely opposed because it is likely that many services would become financially unviable.

The government is currently consulting on how services can be protected and is considering a ring fenced pot to make up any shortfall. Yesterday I was at the consultation event in London looking at this very issue. I can’t say that the mood was particularly upbeat!

The problem with using LHA is that it has not kept up with the reality of local housing markets and, what is more, George Osborne froze the rate that LHA will be paid for the foreseeable future.

A small illustration: in Brighton and Hove the average one bedroom flat is currently £971 per month. LHA in the city is £612 per month.

There is an absurdity to link the payments for supported and sheltered housing tenants to LHA rates. LHA is meant to cover housing costs.  But it costs roughly the same to provide these services where ever you are in the country. As it happens, Brighton and Hove has a higher than average LHA rate, far higher than an area in the north of England yet it costs the same, for example, to maintain a lift in the north of England as it does in the south.

The LHA is a lousy guide to actual costs.

LHA was originally introduced to set the amount of housing benefit that would be paid to claimants who rented in the private rented sector. The figure was supposed to equate to the 30th centile of rents for properties in a locality.

But why is the government determined to base rents for specialist supported housing scheme on the LHA? This week we got an insight into its thinking, and I have to say it is most mind-boggling, ridiculous justifications I think I have ever heard. That view appears to be shared by the person who gave the justification.

At the National Housing Federation’s finance conference which took place in Liverpool last week, the manager for housing policy at the Department for Work and Pensions, Darrell Smith, said in response to a question as to why LHA rates are being used for setting benefit levels for supported housing, he said: “The one advantage of (LHA rates) is that they are already there, so it doesn’t cost government anything to set it up. I know that isn’t a great answer, but that’s all I have got.”

If that is the way that government is developing its strategy for those very services that support the most vulnerable members of our society, what hope is there?

A place in Brighton and Hove that is certain to alarm and distress you

There is an area in Brighton best avoided, both day and night. If you don’t you will witness things that will alarm and distress you. I am, of course, referring to the comments that follow articles in the Brighton Argus.

All species of pond life can be found there, and it seems that the more extreme and abusive the comment the more it attracts attention.

I am a big fan of the Argus, but I think that it lets itself down by not moderating more proactively the comments left at the end of articles.

However, some of the more intelligent comments are printed daily on page 11 of the paper. Today (Monday 27th March) there are some interesting comments regarding homelessness.

One comment suggests that the more we do to help homeless people, the more will be attracted to the city. I disagree with this. I have never heard somebody say that they moved to Brighton because it has excellent homelessness services or drug services, etc. They might say they came to Brighton because of the drug scene, the ambience of the city, or that Brighton is a much nicer place than Slough or Hull!

There is a comment that sasylum that Brighton is “a kind and liberal place” and that it appears that we are “rolling out the red mat for beggars”. Another commentator says that you should not give money to beggars. He (I believe he is male) encouraged people to give to charities that help people to get off of the street. I agree with this comment.

A further comment suggests that more tents will appear on the city streets and in parks in the forthcoming weeks. In previous summers we have seen an influx of people to the city although that was not the case last summer when the numbers remained very level with no seasonal spike.

Strong messages are given out by homelessness charities that Brighton is full up and there are not the services or accommodation for people should they arrive in Brighton with nowhere to live.

But if there is to be an increase in rough sleeping, and I suspect that over the next few years there will be notwithstanding the excellent efforts of the City Council and homelessness charities, because of changes to welfare benefit and the most recent decision to deny those between 18 and 21 the automatic right to claim housing benefit.

Housing in Hastings: Universal credit and the 6 week wait for the first payment

(This is the first of five daily items I will be posting this week. My thanks to my colleague Sue Hennell who wrote a briefing paper on which I have drawn for these posts).

Hastings is one of the areas that is now in the ‘full service’ roll out of Universal Credit. BHT’s Hastings Advice Centre has found it is dealing with tenants in rent arrears due to the waiting time for payments to commence.  This can mean that the tenant accrues rent arrears and it can increase existing arrears.  For some clients they have had to wait longer than 6 weeks for their first payment.

While social landlords on the whole are willing to wait for their rent and will arrange a repayment plan for any rent arrears due, many private landlords are not so willing to wait and will serve notice.

This is not just a problem in Hastings, but one that is replicated across the country. The Guardian in January of this year reported:

  • Eight out of 10 social housing tenants moved on to Universal Credit are falling into rent arrears or increasing the level of pre-existing arrears.
  • Families unable to manage the regulation 42-day wait for a first payment are regularly referred to food banks by housing associations or local MPs.
  • Some claimants are waiting as long as 60 days for an initial payment because of processing delays on top of the formal wait.
  • Uncertainty about the system has contributed to a dramatic decline in the number of private landlords willing to take on benefit recipients, even if they are in work.

Private landlords said that without changes they would be reluctant to let to Universal Credit recipients because of the high risk of tenant arrears. Alan Ward, the chairman of the Residential Landlords Association, said: “Landlords are rapidly losing confidence in the system.”

Meanwhile, membership surveys by the National Landlords Association reveal that the number of private landlords willing to let properties to recipients of Universal Credit – or the local housing allowance that predates it – has fallen sharply from 46% in 2010 to 18%.

A question I ask from time to time, where are people going to live if social housing isn’t keeping pace with need (and it is certainly not), and private landlords are less willing to rent to claimants?

If you are facing eviction due to rent arrears, get advice early from one of BHT’s Advice Centres in Hastings, Eastbourne and Brighton, the CAB or another advice centre.

Here are details of the BHT Advice Centres:

Brighton

Eastbourne

Hastings