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.

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.

What the government’s housing white paper needs to say

This could be a big week for housing, with the government publishing its long-awaited housing strategy. Today (Sunday 5th February) the government has hinted at a new emphasis on people who rent their homes.

imageI welcome what Housing Minister Gavin Barwell has said, that there will be minimum term tenancies and more homes built for rent, signaling a “change of tone” from previous Conservative Party policy. But the key issue is what sort of rental homes they will be? Will tenants have greater security of tenure and, critically, will they be truly affordable?

I have lost count of the number of announcement, housing strategies, policy documents and white papers there have been over the last 25 years. Most have delivered little. Some have been disastrous. And the housing crisis has just got worse.

Will this latest iteration be any different. Yes, if as promised there is a shift from the obsession with home ownership. As I have already said do one of the key issues is whether the promised homes for rent will be truly affordable.

If, as I suspect, the government will be looking for institutional investors (pension funds, for example) to make it happen, then we will be disappointed. Yes, pension funds are keen to invest in property. Unlike governments, pension funds take a long term view, beyond the immediate political cycle. But they are, by their very nature, looking for the best possible return. If there are rent controls, as I believe there should be, the pension funds won’t be interested.

Private landlords already make a valuable contribution to meeting housing need, but with land prices being what they are, they will not be producing any homes in the affordability bracket needed.

The average privately rented one bed flat in Brighton is now £971 per month. The most housing benefit will pay is £612 per month (the Local Housing Allowance – LHA). To make the private rented sector affordable to those on medium, low and no income, the government could either abolish the LHA, but that would cost billions of Pounds, year on year and forever. It could put a cap on the amount a landlord can charge, but then investors in the private rented market would disappear. Anyway, I cannot see any government intervening in the market in this way.

There is another way, which makes financial sense in the long term: invest and build council houses along with housing association homes. This will require upfront capital investment, in the acquisition of land, and the building of homes. A one-off subsidy in capital investment can ensure that there isn’t a need for ongoing rent subsidies through housing benefit.

I have no illusion about local councils, many of whom lack imagination and courage when it comes to modern design and construction methods. They will have to up their game considerably.

What of the right to buy? It must surely be ended. More than a third of the homes sold through the right to buy have ended up in the private rented sector with rents three of four higher than when they were in council ownership. It makes no sense in economic or housing terms, although it has proven to be political popular in spite of the negative impact it has had on the provision of homes for people in the greatest need.

So what of aspiration? Gavin Barwell has said that the government had not given up making home ownership available to all. Most people, when asked, say they would like to own their own home. But for around half the population, that aspiration is unachievable, even with the huge public subsidies on offer. A more achievable aspiration could be the provision a homes for people who need them, at rents that people can afford.

I hope that secure tenancies will be reintroduced. People need that security, as well as the flexibility that renting should offer. I disagree with Jeremy Corbyn who has been quoted as saying that the rental market was “incapable of giving people the security they need”. I disagree. People used to have much greater security of tenure, and there is no reason why that can’t happen again for those who pay their rent and don’t cause anti-social behaviour. It requires a change in the law and investment in services offering advice and representation so that tenants’ rights can be enforced. That is something the government can deliver on, and quickly.

New_Prime_Minister_Theresa_May_makes_a_speech_outside_10_Downing_Street_London_after_meeti-xlarge_trans++uWljxTX2ToqwW26CTqWzx8B_jeBzq4FpvJVTUwJgaqgTheresa May said on the steps of Downing Street that her government will help those who are “just about managing”. This housing strategy needs to go beyond that. It needs to help those who already aren’t managing. Her housing strategy will be judged on whether it addresses the issue of affordability and supply.

I am not holding my breath, but hope to be pleasantly surprised.

Charging housing associations for government regulation

The Homes and Communities Agency is consulting on a proposal to charge a fee to housing associations for its regulatory activities. The charges to be introduced from April 2017 are as follows:

  • £5 per home for registered providers with 1000 or more units of social housing (yes, homes are still referred to as ‘units’)
  • A fixed fee of £300 for providers with fewer than 1000 social housing units
  • A one off fixed rate fee of £2,500 for successful new registrations with the regulator.

For large associations such as Clarion, recently formed from the merger of Affinity Homes and Circle, with 125,000 homes, this will cost £625,000 a year, money that otherwise could have been spent on the development of new homes.

For BHT, we will have to pay the £300 fixed fee.

I was interested in the comment from David Orr, Chief Executive of the National Housing Federation regarding the short consultation period. The deadline for submissions was Monday (9th January). AT the time the consultation was launched he said: “We will not have the opportunity of holding events across the country. However, we will hold open meetings to discuss the proposals in Manchester and London.”

This consultation period contrasted favourably to the seven day notice given for housing associations to respond to the proposal that the Right to Buy be extended to housing associations. The National Housing Federation was complicit in this travesty of a consultation period which made it extremely difficult to get an agreement from our boards (which BHT did manage to do – we objected to the proposal) but impossible to consult with tenants.

We have seen the shambles that the extension of the Right to Buy has become and it is the National Housing Federation’s on-going shame that it was so complicit in this shocking policy and the way it was foisted upon us.

The solution to the housing crisis isn’t rocket science, and it will save the government money!

img_4787A report by Lloyds Bank has been published that says half of England’s 2,000 housing associations are considering mergers. Whether this is true or not, there has been a great deal of pressure placed on housing associations to merge, the argument often being that mergers produce efficiencies and improves value for money, and that as a result more homes can be built.

For the last ten years there has been merger mania, with supergroups emerging including, most recently, Clarion with 125,000 homes. Clarion’s family tree shows at least twelve former housing associations including William Sutton, Downland, Circle, Broomley, and Ridgehill. The mighty BHT could have been part of this by adding our … 318 homes had we not demerged from Affinity Sutton a few years ago, a recognition of the specialist nature of BHT.

New homes are needed. According to the government, the number of ‘affordable homes’ is at a 24 year low. This is in spite of merger mania. And ‘affordable’ they are not as affordable in this context refers to rents at 80% of the market locally. In Brighton the average one bed flat in the private rented sector is now £983 a month, making the ‘affordable’ rent around £785 per month. Housing benefit will pay £612 per month for accommodation in the private rented sector.

The low rate of development is due to massive reductions in capital investment by government, hugely inflated land prices, and uncertainty resulting from government policies (including the 1% year on year reduction in rents and the forthcoming cap on the amounts claimants can receive towards their rent).

The market has failed people and will only make matters worse unless government intervenes.

The solution isn’t rocket science. The government needs to give greater freedoms to local councils to build homes with social rents, invest in the cost of building these homes and those being built by housing associations so that rents can remain low rather than in subsidising rents through housing benefit, and restrict the use of land so that housing need can be met rather than developments being for speculative gain.

This would also need an end to the Right to Buy so that the homes remain for those in need rather than being recycled into the private rented sector with rents three or four times greater than the social rents.

Over the lifetime of each house, the government will save far more by not shelling out, year after year, higher rates of housing benefit.

It has been said often enough, but can’t be repeated enough: housing should not be an investment opportunity but where people live.

Has the extension of the Right to Buy to housing associations hit the buffers?

I have been, and remain, highly critical of the government’s intention to extend the Right to Buy to housing associations. I felt that not only was it ethically wrong and economically flawed, I felt it had been a policy worked out on the back of an envelope. The pledge for a one-for-one replacement has never really been credible and, especially for small associations like BHT, deliverable. The government had clearly not worked out how much it would cost and how it would be paid for.

It is an expensive policy that helps those who are already adequately housed. It has nothing to do with tackling the housing crisis and everything to do with appealing to an electoral demographic.

The funding plan (“I have a cunning plan” said Baldrick) was to get councils to sell off high-value council homes and to pay a levy to the Treasury.

I feel sorry for the Housing Minister, Gavin Barwell, who has had to pick up this flawed policy from his predecessor. It is a shame the National Housing Federation has hitched its wagon so clearly to this runaway train.

As part of the Autumn Statement the government has pushed back implementation for a year and the Minister has announced the launch next year of a five year regional pilot. This can be viewed in two ways: first that the government is being cautious, wanting to get the detail right, or second, that it is quietly trying to kill off this ridiculous policy and pushing it into the long grass might be a quiet way of doing just that.

Mr Barwell would gain lots of plaudits if he was to put the policy out of its misery. He has nothing to lose and plenty to gain. The National Housing Federation, however, might end up with egg on its face.

Has Theresa May signalled a sensible change in housing policy?

(This item first appeared in my column in the Brighton Argus on 8th October 2016)

theresa-may-2In her speech at the Conservative Party Conference on Wednesday, Theresa May signalled a shift in housing policy, away from her predecessor’s total focus on home ownership, such as Help to Buy and Right to Buy. She said: “We simply need to build more homes”.

She has promised “further significant measures” that will see one million new homes by 2020.

She rightly described the housing market as “the dysfunctional” saying the supply of new homes should be at the centre of housing policy.

Uncharacteristically for a Conservative leader, she advocated state intervention, saying: “This means using the power of government to step in and repair the dysfunctional housing market. It means using public sector land for more and faster housebuilding. It means encouraging new technologies that will help us to get more houses built faster and putting in more government investment too.”

This was all music to my ears. Of course I would have liked her to go further. I would have liked to hear about the need for social housing for rent.

Mrs May appears to recognise this, saying that high housing costs and the gap between renters and homeowners lay “at the heart of falling social mobility, falling savings and low productivity”.

Social mobility and greater equality depends on the availability of affordable rented accommodation.

However, if the one million new homes are focussed on those who can afford to buy, then the housing divide and social inequality will become greater.

But at this stage I am encouraged by what Mrs May had to say about housing.