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John Bibby
 
John is a Policy Officer at Shelter.

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By John Bibby

2013/14: the worst year for social rented house building since WW2

A number of notable things happen around the end of October: Diwali, Halloween, the clocks go back and the government publishes its annual update on affordable housing supply.

The first couple of those may provide a good excuse for a party, but this year’s affordable housing statistical release is nothing to celebrate. It is, without overstatement, a disaster.

There are two main stories that the statistics tell.

The first is that the overall level of affordable completions has fallen for the third year in a row, down by over a third since 2010. At a time when we need output of all types of housing to roughly double, this is itself very bad news.

Probably even more alarming, however, is what’s revealed when we look at the detail of the types of ‘affordable homes’ that were built.

This is because not all ‘affordable homes’ are created equal. Under the broad umbrella comes a wide variety of different intermediate and social homes, including:

  • Shared ownership homes (part-rent, part-buy homes)
  • Intermediate rent homes (short-term homes charged at up to 80% of market rents)
  • ‘Affordable Rent’ homes (long-term homes charged at up to 80% of market rents)
  • Social rented homes (long-term homes charged at social rents – typically about 50% of market rents)

While the number of ‘affordable homes’ built every year has fallen by a third since the most recent peak in 2010, the number of social rented homes has fallen by over two thirds – down from over 35,000 to just 10,000.

This makes 2013/14 the single worst year for new social rented house building since the end of the Second World War.

In 1946, during demobilisation in the immediate wake of the war, we built twice as many social homes as last year.

The level of output is so low that through Right to Buy sales alone 5,000 more units were lost from the social rented stock last year than were added through new building.

Driving this shift in the type of affordable home that is being built is the growth of Affordable Rent. Only created as a type of housing in 2011, Affordable Rent is now the default form of new government-supported rented home. That default status is now feeding through in terms of units being built. Last year Affordable Rent homes accounted for 43% (15,840) of total affordable completions.

By being charged at up to 80% of the market, Affordable Rent homes are typically substantially more expensive than social rented homes. In London, this has meant monthly rents on new Affordable Rent family homes purportedly as high as £2,800 a month.

Shelter has argued strongly for an expansion in the number of intermediate homes that are being built – homes to rent or buy that cost less than private sector rents, but above social rents – for people on low to middle incomes. This expansion could include growth in the number of homes that are charged at intermediate rents, like Affordable Rent. But it must be in addition to, not in place of, new social rented homes.

Failing to build the social homes will not only deprive the millions of people on council waiting lists of a truly affordable place to call home: it threatens to undermine the new Affordable Rent programme itself. If social rented house building continues at historically low 2013/14 levels, families on low incomes on the waiting list will be placed in Affordable Rent homes that they will likely never be able to afford. Housing benefit will pick up the difference and the welfare bill will grow. Welfare dependency will increase.

Although successive governments have failed to substantially increase levels of social rented house building, this isn’t a problem without a solution. In Building the homes we need, the report we published earlier in the year with KPMG, we set out the policy changes needed to increase house building of all types, including social rented homes. We need to make sure that politicians on all sides commit to those policies so that next October we have more cause for optimism.

Martha Mackenzie
 
I’m the Stakeholder Relations Assistant at Shelter, I joined the Public Affairs team in July 2012. I have been working on a wide range of projects, most notably engaging with local authorities through our rogue landlords campaign. In my spare time I’m studying for a MA in legal and political theory. When not chained to a desk I can usually be found running or cycling around London.

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By Martha Mackenzie

Guest blog – the Association of Tenancy Relations Officers

Guest blog: Dave Hickling, Chair of the Association of Tenancies Relations Officers.

Assured Shorthold Tenancies (ASTs) were introduced in order to breathe life into the private rented housing market. These tenancies with no fixed period were designed to encourage short term letting at a time when the risks of letting and the difficulties of recovering possession were discouraging would-be landlords.

No one can deny that the sector is now pretty healthy and is continuing to go from strength to strength, often at the expense of owner occupation and more secure, public sector letting.

Regardless of whether it might be time to turn down some of the fuel to the private rented market’s expansion, one of the negative consequences of removing long term security of tenure for private tenants has been its impact on tenants’ willingness to report repairs.

Housing advisers and local authority officers dealing with private rented homes see examples of retaliatory (or revenge) evictions on a regular basis. These evictions are not only unfair and devastating to those affected, they also present a significant impediment to local authorities’ attempts to improve physical standards. The fear of eviction deters tenants from complaining.

Any responsible housing adviser is duty bound to make private tenants aware that a possible consequence of raising a complaint is that the landlord will issue a section 21 notice. Many private tenants are well aware that they can very easily be evicted – more easily than in most European countries and American states.

In a recent case I was involved in, after a telephone discussion with another council officer about the merits or reporting a repair to his local authority, a private tenant concluded that: our rights are very limited, and our landlord can basically do as he pleases –we can be evicted if we complain that our landlord isn’t carrying out repairs he should be. We never heard from the tenant again or received details of his complaint.

There is a ‘rationale’ behind retaliatory eviction for the irresponsible landlord, especially when alternative tenants are easy to come by. Tenants differ hugely both in the strength and resolve required to make a complaint, and in terms of their alternative housing options.

The legality of retaliatory eviction therefore encourages unscrupulous landlords to seek out the most vulnerable. When evicting a ‘troublesome’ tenant, these landlords may be confident of finding a more ‘compliant’ tenant, who is far less likely to raise issues about standards of management.

Also, where a hard-pressed Local Authority is dealing with a complaint it is less likely that any action will be followed through once the complainant leaves and the landlord’s future intentions for the property are unclear.

Sarah Teather’s Tenancies (Reform) Bill will make tenants feel more protected, and much more confident in reporting problems to us.

It will also encourage more responsible behaviour from landlords. They will know that their powers to evict will be severely curtailed if they don’t keep their properties in good repair- or they don’t make the necessary safety checks. If enacted, we are hopeful that this Bill will make less diligent landlords more careful about doing repairs and safety checks in the first place.

Case Study 1

In March 2014, Wendy complains to her Council’s Private Housing Team about various disrepair problems in her private tenancy. A Council Officer visits and finds amongst other things, damp and mould, leaking pipes and bath, dangerous wiring, no gas safety certificate, faulty fire detectors external doors in disrepair and the shower not working properly. The Officer writes to the landlord and 2 days later the landlord rings Wendy and angrily tells her she has to go, later following this up with a section 21 Notice. There were no issues with the rent account or other allegations of wrong doing by the tenant.

Case Study 2

In July 2014 Haley complains to her Council’s Private Housing Team because she has serious concern for her family about damp, mould and cold in her private rented tenancy. A Council Officer visits and contacts the landlord, raising concerns about serious damp and mould in the living and bedrooms, lack of insulation, leaking roof and gutters and a lack of mechanical fans in the bathroom and kitchen. The landlord is unresponsive and so over the next month, the Council Officer repeatedly tries to contact the landlord and writes again on 13 August. On 18 August, the tenant receives a section 21 notice with no explanation and having received no contact regarding any problems with the tenancy.

Scott Dawes
 

By Scott Dawes

In from the cold; bringing housing benefit advice back in scope

At Shelter we know better than anyone the value of expert housing advice, which frequently makes the difference between keeping a home and homelessness. Legal aid has long been a key source of funding for expert housing advice – including many of the services Shelter provides. But this funding was decimated by the now infamous Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). Shelter campaigned tooth and nail against LASPO. Sadly, its impacts have been nothing short of huge; ten Shelter advice services have closed since its introduction and legal help for housing has been removed from nearly 40,000 people.[1]

Now the Justice Select Committee is following up its critical 2011 report on LASPO with a series of evidence sessions for an inquiry. Yesterday’s was on housing – so what happened?

Someone who is only too familiar with the impacts of LASPO is our Principal Solicitor and Legal Aid Lawyer of the Year, John Gallagher. Having worked tirelessly for Shelter for twenty-seven years, John was best placed to give evidence on behalf of Shelter in Parliament yesterday.

John stressed that advice on housing benefit problems is no longer in scope for legal aid – which means people cannot get legal advice on these issues. The Government justified this because the issues were of “relatively minor importance”, but evidence given to the committee today by John and others showed how often that just isn’t true.

“Relatively minor” errors in a decision about someone’s housing benefit can contribute significantly to financial hardship, rent arrears, possession claims and eventual homelessness – something flagged to the Committee back in 2011.[2] As John went on to explain, benefits legislation is also vastly complicated – if a tiny piece of information is not gathered or processed correctly it can lead to the wrong decision being made. The average person – let alone a vulnerable one – can struggle to even identify such problems, let alone convince officials to reconsider their decisions.

Taking benefits advice out of scope probably doesn’t even save money. Evidence to the Committee in 2011 showed that every £1 spent on housing advice saves on average £2.34 of public money.[3] Advice under the Legal Help scheme costs the taxpayer as little at £150 – going to court costs £1,000s. For example, possession proceedings in court can often uncover errors in processing claims that can lead to back payments of benefits that reduce rent arrears and prevent homelessness. But if a client had got this advice before the possession order – let alone the rent arrears – it would have saved the court’s time, and saved the landlord and tax-payer money.

The Government also justified the reduced scope for legal aid on the grounds that the third sector would pick up the slack. However, the Committee heard the reality yesterday from each of the three respected lawyers; a cap on how many can be helped means people in need get turned away. Advice providers like Shelter have had to close services, reducing the amount of help on offer. And barristers securing adjournments from the court are finding that there is such a shortage of advice that those with unresolved benefit claims are unable to resolve their benefit problems in time for the next hearing, causing more delay and costing the courts more money.

The reality of LASPO has been less preventative help, less funding for organisations advising vulnerable people, and less access to justice for those in genuine need. The Government should recognise that the restrictions aren’t saving money, and that vulnerable people are being denied access to justice; it is time to reinstate housing benefit advice under legal aid as soon as possible.

Hannah Gousy
 
Hannah is a policy officer at Shelter

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By Hannah Gousy

Guest blog- Nick Gracie-Langrick, Enforcement Officer, London Borough of Wandsworth

Environmental health teams are at the forefront of activities to prevent poor condition in private rented homes. They have first hand insight of the scale of poor conditions and the challenges renters face in getting repairs fixed. Nick Gracie-Langrick, Enforcement Officer from the London Borough of Wandsworth, has written this guest blog on how the Tenancies (Reform) Bill will help protect renters and improve conditions across the sector.

Supporting tenants who complain

Across the country one third of the 4.1million private rented homes fail the decent homes standard. Almost 10% have the worst possible energy efficiency rating; far too many tenants are living in poor, unsafe and substandard homes.

Local authorities have the power to improve privately rented properties. They can serve formal enforcement notices, which require the landlord to complete works or repair problems within a given timescale. Landlords are served with these notices – and given a reasonable time to comply – following a property inspection.  When landlords do not comply, the local authority can complete the works themselves, or prosecute or both.  There have been some substantial prosecution fines recently, including one totaling almost £66,000 for two London Borough of Redbridge landlords.

For many authorities, most of the visits they make arise only as a result of a tenant contacting them; although some do work proactively to target areas of poor quality rented stock.  Local authorities know that tenants can be evicted as a result of their work. To reduce the chance of this happening, they try to work in partnership with the landlord rather than taking an adversarial stance straight away. But in far too many cases, the landlord ignores these attempts and takes no action to improve their property.

Finding some of the worst properties can be the biggest challenge. In my roles at Birmingham, Brighton and now Wandsworth, I have seen families living in cellars, deep freezes and sheds. I know how desperate matters can be.  Local authorities have finite resources so their enforcement staff need to be inspecting and improving the worst homes.  We need tenants to come forward so that we can identify these homes. With many renters living in fear of eviction this can be impossible.

Sadly, I can name many examples of my work (including proactive work) that has resulted in tenants being evicted as part of the process; landlords blaming their tenants for interfering is the main reason this happens. We ask renters to request works from the landlord before contacting the council.

From an enforcing officer’s view, what I like about Sarah Teathers’ proposed Tenancies (Reform) Bill is that tenants will feel increasingly confident about contacting local authorities to report poor housing conditions. The frequent evictions following intervention will also stop. The same tenant that has complained will still be in the property once the improvements have been carried out – they will benefit from much better living conditions. I am confident that once the local authority intervention has passed, the landlord and tenant relationship can return to the pre-complaint situation.  For the assured shorthold tenancy to retain the flexibility it provides, I hope the Bill will encourage landlords to be more proactive about ensuring properties meet current decency standards.

 

Toby Lloyd
 
I'm Head of Policy at Shelter, and have worked on housing issues in the public, private and third sectors for nine years. I'm a Londoner, a cyclist, father of two young daughters and member of the Hackney Co-housing Project.

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By Toby Lloyd

Labour plays its hand on building more homes

As we regularly write about on this blog, housing looks like being a major issue at a general election for the first time in a generation. It’s now consistently a top 5 issue for voters, with even secure homeowners worried about where their children are going to live.

After decades of inaction from successive governments, it finally seems Westminster is starting to catch up with public concern.  But if they are to win over an increasingly cynical public all parties will need show how they actually propose to solve the problem.  So far, we’ve seen more rhetoric and piecemeal measures than concrete and coherent plans. To fill this gap, back in May Shelter and KPMG outlined a programme for the 2015 government, outlining how they could solve the housing shortage in one Parliament.

Today, Ed Miliband outlined Labour’s answer with the launch of the Lyons review – and it’s notable that he chose a swing seat, Milton Keynes, in which to do it.

So how does the review measure up?

On the whole, it’s very encouraging.  Many of the recommendations outlined in Shelter/KPMG’s report in May have been adopted. These include a Housing Investment Bank, New Homes Zones and ambitious targets for Garden Cities based closely on our Wolfson Economics Prize submission. Together they represent a credible platform for building the homes we need as a country.

Most importantly, the review identifies England’s dysfunctional land market as the heart of the problem, with some practical solutions and policies offered on how this area can be reformed. This a bold and clear sighted attempt to get to grips with the real reason we don’t build enough homes: the high price of land. If we can get reform of the land supply market right it could push house building into another gear – one that can build more, better and more affordable homes.

Alongside urgently needed social housing, it’s also promising to see the review back lower-cost routes into homeownership for young people facing high house prices. Products like Part-Buy, Part-Rent homes are needed to meet the needs and aspirations of a growing middle market, and our polling shows these are popular with the public. That same polling showed that Lyons’ idea of ‘local homes for first time buyers’ can also prove popular. This continues a growing trend of parties seeking to tap in to the ‘homes for who?’ question: two weeks ago David Cameron  announced a starter homes policy which would ban buy-to-let and foreign investors from buying new homes for first time buyers.

That said, there are still gaps.

More detail is needed, particularly on how desperately needed affordable homes can be paid for. While innovative financing and prioritising investment in housing within existing budgets can cover some of the bill, it’s unlikely to be sufficient by itself. Realistically, it just won’t be possible to build the homes we need as quickly as we need them without extra investment to get affordable supply moving while longer term reforms bed in. Money will need to be found: we suggested a minimum of extra £1.25bn a year.

And then there’s next steps. At the moment this is still talk, rather than action. We want to see the Labour Party promise to deliver these measures in full if they win power. After all, in thirteen years in government they built nowhere near enough homes. None of what Sir Michael says will mean much unless it is accompanied by the political will and investment necessary.

On to the election

Thankfully, over the past five years we’ve seen each of the main political parties begin to grapple with this issue in their own particular way. The Lib Dems committed to building 300,000 homes a year, and the Conservatives made ‘Building for Britain’ a central part of the 2014 budget. Influential commentators in and around all three parties are urging them to seize the political opportunity the housing crisis presents.

But they must go further. To date, the Lyons Review represents the most detailed answer to the fundamental questions of housing supply. The coalition parties are due to publish the Elphicke and House review later in the year: we look forward to all parties showing their hand and making the firm commitments our chronic housing shortage demands.

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