Rents fall in areas of good housing supply

The housing crisis can be addressed if two key principles are addressed: supply and affordability. It is obvious, I know.

In the past I have, wrongly, called for an approach that based on ‘build, build, build’. No longer.  With the shortage of land in places like Brighton and Hove, it is what is built, and it must be affordable.

The phrase ‘affordable’ has been corrupted by government, which uses the phrase in the context of rented accommodation as 80% of the market. That means in this city rents of £784.80 a month for a one bed flat are regarded as ‘affordable’.  A flat costing £784.80 is more affordable than one where the rent is at the average charged (£971 per month).

Most developers are, understandable, attracted by securing the maximum return on their investment. They are risking huge sums of money, and they want a return on their investment consummate with that risk.

But that does nothing to help the housing crisis. Homes for sale in the city have long been beyond the means of many local people.  I was on BBC Radio 5 Live recently discussing the housing situation in Brighton.  On the programme was a self-employed plumber who has been struggling for years to buy his own place.  I think he said he is in his early 40s, works hard and determined.

In parts of Battersea in south London (SE11, SW11, and SW8) the number of properties available to rent has increased by 28.1% since the beginning of the year. This has led to a 6% decrease in rents being charged over the same period.

Now most of these properties are buy-to-let investments, and will beyond the means of ordinary people. But the lesson is important. If we can develop homes for rent with a mix of social and ‘affordable’ rents, then the market will begin to readjust, and the hopelessness experienced by many renters will be eased.

Real Life Stories: How First Base Day Centre helped Joe off the streets

Many of the people we are seeing are new to rough sleeping, like Joe who was helped by First Base Day Centre.  This is his story:

“When Joe first came into our service, he had never before been in the position of rough sleeping.  He was 45 years of age, had worked fairly consistently and always had friends or partners he could rely on if work dried up and he found himself in between jobs.  The recession had meant that he had faced a longer period of not working, his relationship had succumbed to stress and he found himself sleeping on the beach.

“Joe had made a claim for Job Seekers Allowance, but had not received a payment after several weeks.  He had eaten nothing for two days and was embarrassed, he said that he had not washed or changed his clothes for a week.  We made sure that Joe had a hot meal, a change of clothes and was able to use the shower at First Base.

“Joe was assigned a caseworker who met with Joe every day for the following week and it became clear that he was feeling overwhelmed by his difficulties, ashamed and hopeless about his future.   He said that he had visited a railway bridge on several nights in the previous month and had considered throwing himself under a passing train.  Joe disclosed the difficulties that he experienced throughout his life and that these experiences were re-visiting him on a nightly basis and tormenting him.

“Joe’s caseworker referred him to the Mental Health Team, a multi-agency team providing mental healthservices for homeless people, contacted his GP and made Joe an emergency appointment.  The Doctor was sympathetic and offered medication and follow-up visits.

“It was obvious that Joe was in no position to be actively seeking work and he needed a new claim for a sickness related benefit.   Joe was very anxious and physically shaking while he spoke with the Department for Work and Pensions on the phone so his caseworker supported him with the call.  It was a further two weeks and many phone calls later that Joe received any benefit payment.

“Joe met with the Mental Health Team at First Base and they agreed to offer some on-going support, seeing Joe fortnightly, alongside regular contact with his GP and daily support from his caseworker.

“With the support of his caseworker, Joe arranged an appointment with a BHT housing adviser who suggested that he make a homeless application.  His application was rejected due to lack of medical information supporting his case.  As Joe did not have a local connection to Brighton and Hove it was not possible for him to be referred into one of the City’s hostels, so we began to explore the possibility of privately rented housing with support from another BHT project, Firm Foundations.

“Throughout this time, Joe was continuing to sleep on the beach and his mental and emotional state would fluctuate greatly on a daily basis.  Joe made very good use of services at First Base, including volunteering and on good days was able to plan the direction of casework himself.

“Over time, we collected letters from his GP and from mental health specialists involved in his care and re-submitted his homeless application.   With the additional evidence gathered Brighton and Hove City Council accepted Joe’s application for housing.

“Joe is now living in BHT supported accommodation for people experiencing mental health difficulties.  He has key work support from this project alongside specialist mental health support for Complex Post Traumatic Stress Disorder.  He is engaging with alcohol support services and still calls in periodically to let us know how things are for him.”

First Base operates in the centre of Brighton and is the main centre for the provision of support to assist people who are homeless or vulnerably housed in Brighton and Hove to move on from the streets or insecure accommodation and realise their aspirations.  First Base operates client-centred specialist services to support people who are sleeping rough in the city to get off the streets, start realising their aspirations through work, learning and leisure and find a place they can call home. Several services run from First Base including a Healthy Lifestyles Project (comprising the Catering Training Project and Fitness 4 All), PASH (Promotional and Awareness of Sexual Health), First Impressions (CV and Employment Service), Culture (Heritage and Cultural Activities), and Dine, our catering Social Enterprise company.  

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?”

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.