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.

According to Margaret Thatcher I am a failure ….

Margaret Thatcher once said: “A man who, beyond the age of 26, finds himself on a bus, can count himself as a failure”. I have to plead guilty as charged. I have never learned to drive, not through any inadequacy (although my long legs makes it awkward to get behind the wheel) but through an absence of need or inclination.

I can’t think that it has hindered me much in my life. I might have gone more into the countryside and it might have come in handy when on holiday, but I haven’t really noticed. Not driving has saved me a small fortune. Instead I walk and use buses, as well as the occasional taxi.

I freely confess I am now over the age of 26, so I think a lot of Margaret Thatcher when on a bus (like the time I caught the bus when I was about to have lunch with the Queen….). I am not alone. According to census data from 2011, over a third of households across the city don’t own a car – failures each and everyone of them!.

Cycling to work across Brighton and Hove has doubled between 2001 and 2011. Just under 5% of the population cycle to work. 14% of residents take the bus to work, and over 20% walk to work. Almost 10% of adults cycle at least once a week.  Even the Mayor of the City, Cllr Pete West, cycles to engagements.

In recent weeks I have become a bit obsessed about cycling. I used to cycle everywhere but stopped over 20 years ago when my daughter was an infant when I narrowly missed being killed by a bus turning from Ditchling Road into Oxford Street in Brighton.

My bike has been rusting in the back yard for too long. Yesterday I got it out, pumped up the tires and the thing practically collapsed under me. I need a bicycle because I have accepted a challenge from colleagues to ride 100km on Sunday 25th June as part of BHT’s Around the World Cycling Challenge.

In 12 hours we need as many of you as possible to ride round and round the Preston Park Velodrome so that we clock up 40,075km – equivalent to circumnavigating the earth at the Equator.

Why are we doing this? To raise £25,000 for First Base Day Centre. On days like today, with wind and cold, street homeless people need shelter, and First Base provides that and so much more – showers, clean and dry clothes, hot food, medical care, and much more. Staff at First Base also help people to look at why they are on the street and help them to move into accommodation.

There are three things you can do to help:

  • Sign up to ride yourself – you don’t have to do great distances, every little helps, as the advert says. It costs £10 to participate, £5 concessions and £5 for children under 16. Register via https://www.bht.org.uk/support-us/around-the-world-cycle-challenge-2017/ (Please make sure you do register)
  • Help on the day. Please email my colleague Sara Peskett, and she can let you know how and when you can help.
  • Sponsor me. You can do so here or you can send me a cheque made payable to ‘Brighton Housing Trust’ c/o BHT, 144 London Road, Brighton, BN1 4PH

The Mayor of Brighton and Hove, Cllr Pete West, launching the BHT Around the World Cycle Challenge

Housing White Paper: My Reaction

social-housing-4I am a bit late in the day, but here is my response to the Government’s White Paper on housing:

There has been widespread criticism of previous announcements, and this White Paper marks a major shift in government policy. I welcome the new direction of travel, but feel that the destination will be a real disappointment to anyone who was hoping that we were to see major progress in the supply of affordable homes for rent, especially the absence of the much needed commitment to a return to council house building.

It is as if the promise of a beautiful beach holiday ends up being the seafront in Bognor Regis on a wet Tuesday afternoon in September.

I welcome the £3 billion nod in the direction of off-site construction, something I have advocated for several years and have seen working well with BHT’s partners such as QED and KSD.

I am not opposed to developments with greater density, especially in areas such as Brightton and Hove with high demand and limited land. But any increase in the density of developments must, somehow, not merely result in increased profitability of developments. It must lead to greater affordability. Quality design is a must in such developments.

I welcome the decision to abandon the Conservative Party’s manifesto commitment that 20% of all homes in new developments should be Starter Homes. This was a flagship commitment of David Cameron, in the 2015 manifesto, to build 200,000 of Starter Homes by 2020.

The thinking behind dropping this manifesto commitment must be a recognition that if a development has 20% Starter Homes, there would be no capacity for any other form of social housing.

Not to abandon the Right to Buy, and to persevere with extending the scheme (albeit extremely cautiously) to housing associations, are both Bognor Regis moments.  Worse still, the government has indicated it now wishes to extend Right to Buy to councils’ private housing companies.

Bullish statements have been made about forcing local authorities to ensure that there are plans in place, and the bizarre threat of the Chair of the Homes and Communities Agency to “cane” those that do not deliver, all sounds a bit hollow. I had hoped the government would have returned powers to local authorities, backed up by capital investment, to build new council houses.

The Green Belt is being given protection, but developments will be allowed “in exceptional circumstances”. What greater exceptional circumstances are there than a housing crisis on a scale that this country has never known. If it is true that Surrey has more land given over to golf courses than housing, then I won’t weep if some green belt is lost.

On the private rented sector, if powers are given to local authorities to impose banning orders on the worst landlords, such powers must be backed up by resources to allow councils to enforce this and for independent advice agencies to enforce the rights of tenants. Rights are only as good as the ability to enforce them. Otherwise they are hollow threats.

The ambition of the plan, and the fanfare it has been given, is not matched by planned delivery, and even though there are aspirations to build the homes the nation needs, it sounds similar to previous statements and aspirations.

As I wrote at the weekend, the private sector isn’t going to deliver the homes that are needed, social homes for rent. In 30 years I have seen housing white papers come and go. The 2016 white paper, I fear, will not live long in the memory, a bit like a damp Tuesday afternoon in September in Bognor.