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Zorana Halpin
 
Zorana Halpin is a Policy Officer at Shelter

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By Zorana Halpin

Repossessions are up. Is the bedroom tax to blame?

Sadly, every year, there are families in England that lose their home.  Today, government figures from last year have been reported on by the Independent, and they point to a particularly worrying trend.

The graph below uses the government figures to show the change in numbers of social tenants facing the horror of eviction every year.

 

They show that after years of decline, the number of possession claims by social landlords is increasing, with a noticeable spike last year.   

In fact the number of possession claims went up by a whopping 18% in 2013/14, compared to 2012/13.

That’s 17,710 more households in social housing facing eviction.

Is it a leap to imagine that the bedroom tax, which was introduced in 2013, might have contributed to this?

Last month I blogged about the sheer numbers caught by the bedroom tax, but seemingly unable to move – is it any surprise that some of the tenants caught in this cruellest of binds have ended up facing eviction?

We can’t tell from the MOJ data exactly what happened to the tenants served an eviction order – they may have been evicted or ended up in a court that took a sympathetic view, and gave them another chance to pay off their arrears.

But two things are clear – the bedroom tax comes with costs.

For the families served an eviction order and potentially finding themselves homeless and uprooted, there is a cost.  

For the government overseeing a rise in court proceedings, there is a cost.  

Not to mention the cost of rehousing an evicted social housing tenant in the more expensive and unstable private sector.

Two things have provided some relief in this sorry tale.

Shelter have been involved in winning concessions for those affected meaning that some of the most vulnerable households are now protected.

Discretionary Housing Payment’s (DHPs) have also provided some relief – the uptake of DHP’s by some of those affected by the bedroom tax may explain why possession orders against households in social housing dropped substantially last quarter – from 31,702 to 23,430.

Hopefully this reversal will continue.

But, if that hope relies only on the continuation of temporary payments, and clawing back further concessions to protect the most vulnerable, then things are not looking good.

What exactly will happen if DHP funding ends?

Even as the funding stands at £165m, DHP’s are woefully inadequate to help all those affected. If the pot shrinks further, things could get even worse.

Without enough homes for people to move into these statistics help spell out what we feared: that the bedroom tax consigns those affected to uncertainty, debt and eviction.  

 

 

 

Hannah Gousy
 
Hannah is a policy officer at Shelter

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By Hannah Gousy

How open data could power change in the private rented sector

Nesta and ODI’s Housing Open Data Challenge invites teams to develop products and services using open data to help people get the best out of renting, whether they are in the private rented sector or in social housing. As part of this challenge, Shelter have blogged about the need for greater open data in the private rented sector.

Private renting is fast becoming the new normal. The sector is now home to more than 9 million people – up from just over 5.5 million just a decade ago. For the first time in post-war history, more people rent from private landlords than from councils and Housing Associations combined. People are now renting for much longer and at more settled stages of their lives – almost half of renters are aged 35 and nearly a third are families with children .

The case for greater open data

The growth in private renters has also led to a huge rise in the number of private landlords, as the market is dominated by individuals owning just one or two properties. Eighty nine per cent of all landlords are private individuals, and more than three-quarters (78 per cent) own just a single rental property. Whilst the government collects data from a sample of landlords, which is then used to extrapolate trends in the sector, there is no centralised data collected on the exact number of landlords and or rented homes. This lack of basic data presents major barriers to local councils and campaign groups like Shelter who want to improve standards and develop national policy on the private rented sector.

Firstly, the lack of clear, usable data means that there’s no systematic process by which national or local government can contact landlords to inform and update them on their legal rights and responsibilities. There is literally no record of who is or isn’t a landlord. Professional trade associations ought to be an alternative route for policy makers to reach landlords, but only a very small number of landlords are members, and there is no requirement for landlords to join one.

Secondly, not being able to identify rented properties or landlords can create serious public and environmental health problems. Over the past decade local authorities have seen a dramatic increase in the numbers of people living in the private rented sector, which is also where the worst physical conditions are found. At the same time however, cuts to council budgets have left many environmental health teams, which play a central role in ensuring landlords maintain the standards of their properties, under resourced. A lack of data on landlords and the homes they let makes it almost impossible to target educational and support resources at landlords and take enforcement action against the rogues who deliberately exploit renters.

A failure to collect consistent data on this rapidly growing sector also presents problems for central government. HMRC has recently launched its Let Property campaign in an attempt to crack down on landlord tax evasion, which it has estimated is costing the government £550 million every year. Greater access to centralised data on the number of landlords and the properties they let would make this task much easier. Similarly, with greater access to data local authorities would be better equipped to recoup unpaid council tax. Since launching its borough-wide landlord licensing scheme, the London Borough of Newham – using the new data the scheme has collected on landlords – has collected £390,000 in unpaid council tax.

How can we help renters?

We know that the number of private renters has grown at a phenomenal rate. Private renting is the most expensive form of housing, but continues to be the most unstable and in the worst condition. In an overheated market, where landlords are able to evict renters very easily, they have little consumer power to bargain for better standards. For this reason, greater available data aimed solely at renters alone, who have very little choice about who they rent from, will not necessarily dramatically improve the sector. This is a challenge that entrants to the Housing Open Data Challenge will have to take into account when developing a tool that benefits renters. In this type of market, improving renter’s consumer bargaining power is key.

Despite the growing importance of this sector and the problems it presents, worrying little is known about the numbers of private landlords and the total amount of private rented stock. To take our rented sector into the 21st century we need to collect – and publish – the data that public bodies, campaign groups and renters themselves need in order to understand what is happening. Only then can we hope to get to the bottom of the problems that can make renters lives a misery.

Find out more about the Nesta data challenge and how to enter here

Tom McCarthy
 
I’m a Campaigns Officer at Shelter, having joined in early 2012. I’m most interested in digital campaigning and the ways this can be used to change both public and political perceptions. Outside of work I’m a keen musician, playing several instruments. I also like walking, cycling and old pubs– preferably in that order.

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By Tom McCarthy

One North …. Plus?

On Tuesday something strange happened. Everyone in politics agreed on something.

One North – a collection of five cities working together – put forward an ambitious proposal on how to improve transport connectivity, dubbed the “Crossrail of the North”.

George Osborne pledged support, stating he’d make the plans the centrepiece of his Autumn Statement. And Ed Balls welcomed the proposals too.

However, before everyone runs away with themselves I want to offer an amendment, an addition to the plans. Let’s call it One North Plus.

Whilst the report provides a comprehensive vision for transport, it misses a big opportunity to integrate this investment and strategic planning with housing. In fact – there was no mention of housing at all in the entire document.

Tying the two together would provide a means to substantially increase housing supply, and thereby improve the lives of hundreds of thousands of people. But it would also make the investment in infrastructure much more socially valuable.

This fits with one of the key recommendations outlined in Shelter and KPMG’s joint report: ‘Building the homes we need: A programme for the 2015 Government’. Integration of housing and infrastructure projects is a win-win policy which maximises the potential of transport and housing developments, and allows public investment in infrastructure to be much more effectively spent.

So what would this integration look like? (FYI: I’m going to talk about the land market now. Please don’t go away – I’ll try and make it worth sticking around.)

Land without planning permission is pretty cheap. Mostly because of the uncertainty that stems from whether you can do anything with it. Conversely, land with planning permission is extremely expensive, given the guaranteed commercial value from property sales. And land with planning permission, and a brand new transport upgrade linked to it? Well that’s the holy-grail – and that means extremely high land values.

The Jubilee line extension is a great example of what transport investment does to land and property prices. £3 billion worth of Government investment went into this project. That created a £2.8 billion increase in property values in the surrounding area according to Transport for London / Jones Lang LaSalle.

But there was little integration of housing into these project plans. That meant this increase in property prices, caused by transport investment, couldn’t be reinvested or captured for the benefit of the local community.

There’s a much better way. And it’s one that we think the One North proposals should benefit from.

KPMG and Shelter believe that transport infrastructure should be planned in conjunction with new homes. By joining up our plans for new transport connectivity with new homes, we can even help pay for the transport links (by using the increase in land values that results to fund capital spending).

To achieve this, joint private/public ventures can purchase land through ‘New Homes Zones’ which are designated by the local planning authority. The zoning effectively freezes land values at pre-planning levels (with some compensation to land owners) and allows the joint venture to capture some of the uplift in value. This can then be used for financing affordable homes, transport or even community compensation. Finally, serviced plots for homes are sold on to self-builders; small and medium-sized enterprises (SME); house builders; and housing associations, who build the homes on contract at a competitive margin.

This approach is well developed in continental Europe, where places such as Hamburg’s HafenCity or the VINEX programme in the Netherlands have seen many homes built to a high standard with excellent connectivity.

The final piece of the jigsaw is devolution of these powers. New connectivity, employment and homes must be financed and planned by the Northern power-house cities themselves, not from Whitehall. This is both to improve the quality of the developments through local leadership; and to improve local involvement in the development of the proposals, enhancing local democracy and therefore also hopefully support for new housing.

We think it is excellent that new infrastructure investment is being proposed for the North, but let’s use that opportunity to build high quality, locally affordable homes too.

NB: You can find out more on linking infrastructure investment and housing in the Shelter and KPMG report, on pages 86 – 87.

Zorana Halpin
 
Zorana Halpin is a Policy Officer at Shelter

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By Zorana Halpin

London’s forgotten homeless

Question:

How have we got into a situation in London where being homeless could mean: 

a)      Living in insecure temporary accommodation for up to 23 years 

b)      Living in temporary accommodation up to 200 miles away 

c)       Subject to the benefit cap with a £100 per week shortfall, putting you at risk of arrears and eviction?

 

Answer: 

A heady combination of a housing shortage, inadequate government support with housing costs, some private landlords taking advantage of desperate councils, and the benefit cap. 

Temporary accommodation is meant to provide suitable and temporary accommodation for homeless households. But our research out today shows it’s not temporary for some households – and for some households it’s no longer affordable.   

So what did we find?  

Our results found in 17 London councils over a third of households in TA had been there over 2 years, and nearly 500 households had been there for over 10 years.  

Our results indicates a gradual displacement of households (and therefore pressure on housing stock) from inner London to outer London. The majority of households placed out of area by inner London boroughs are placed in outer London. Enfield is hosting at least 1000 households on behalf of other London boroughs.

The pressure on outer London councils is having a knock on effect. Just look at where the biggest rises in placing people out of area has been, according to the government’s own statistics:  

 

 

Source: P1E Homelessness statistics, Q4 2011 compared to Q4 2013

 We also found that an estimated one in 4 London households in temporary accommodation could be affected by the benefit cap, which seems like a perverse joke.

Today’s DWP figures show there were 12,523 households subject to the benefit cap in London at the end of May.

Enfield, who we now know have absorbed over 1000 homeless households from London councils, also have the highest number of households subject to the benefit cap nationally.

According to our estimates in London alone around 3,100 households are likely to be homeless and subject to the benefit cap. This is a conservative estimate and below DWP’s own estimate which was that 4,600 homeless households would be subject to the benefit cap.

Last but not least we found that hundreds of homeless families subject to the benefit cap have a rent shortfall but are not yet in receipt of help in the form of Discretionary Housing Payments.

It’s far from clear where these legally homeless households who are presumably racking up mountains of rent arrears will end up.

So what’s going on?

TA costs are high putting councils in a difficult position when looking for suitable placements in high cost areas – and now meaning thousands of homeless households are subject to the benefit cap.

LHA rates are out of touch adding to the difficulties of placing households in suitable accommodation and meaning that moving households on from temporary accommodation into suitable accommodation is a massive challenge.

Some landlords prefer not to let to housing benefit claimants putting the landlords who do let to people on Housing Benefit in a powerful position. We even know that some are getting incentivised by councils to take homeless households in.     

There’s no doubt that within this heady mix, London’s homeless are being forgotten in more ways than one. 

More homes are needed, and in the interim, the government must act to put protections in place to end this perverse merry-go-round before it gets into full swing.

 

 

 

John Bibby
 
John is a Policy Officer at Shelter.

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By John Bibby

“Looking to avoid providing affordable housing?”

Are you a developer? Worried about pesky obligations to pay for new affordable homes eating into your profit margin?

Then you need the services of a company like this one, who – as they put it – can help you “avoid affordable housing contributions with [their] viability reports”. They claim to be able to help developers avoid such contributions for planning applications where they might eat into profit margins of anything up to a whopping 17.5%. And to prove it they provide a page of case studies detailing an estimated £5.5 million of payments towards affordable housing that they have helped developers to avoid or renegotiate.

Rest assured: this is all perfectly legal.

Negotiation with councils of Section 106 planning obligations has existed since they were created as part of the 1990 Town and Country Planning Act.

So if it’s all legal then what’s the problem?

Partly, it’s just a question of the taste of the company’s advertising. The language used is crass and completely ignores England’s desperate shortage of affordable housing. They may not be the only firm offering this service (plenty do), but they probably are the only one that’s chosen to illustrate the savings that developers can make with an image of someone pushing a wheelbarrow loaded with cash.

But this is not just about some consultant’s poor taste in advertising.

Recent changes in both regulation and the law have made it easier for developers to avoid obligations to pay towards or build affordable housing by claiming that doing so would make schemes ‘unviable’.

The introduction of the National Planning Policy Framework (NPPF) allowed developers to avoid contributions towards affordable housing where doing so would mean that the development would not provide ‘competitive returns’ to landowner and developer. The Growth and Infrastructure Act strengthened this by extending developers’ right to apply for renegotiation of affordable housing obligations that have already been agreed and giving them a subsequent right to appeal. So if the market changes then developers are able to go back and renegotiate.

Shelter argued when both the NPPF and the Growth and Infrastructure Act were introduced that they would make it harder to deliver affordable housing through Section 106 planning obligations.

This is now being borne out by the decisions of the Planning Inspectorate, which has upheld appeals from developers arguing that delivering agreed contributions to affordable housing would make the scheme unviable.

In the case of Land at the Manor Shinfield, the planning inspector found that a 20% margin represented a competitive return meaning that the number of affordable homes delivered as part of the development was reduced from 40 to just two. A 20% margin may sound more than ‘competitive’ compared to other industries, but developers are able to argue for margins of this level because the development process is currently inherently risky and the margins uncertain.

The changes in the NPPF were introduced with the intention of getting development moving, but failed to remove this inherent risk. Instead of creating desperate fixes that minimise the levels of affordable homes being built we should be getting to grips with the fundamental shortcomings of England’s housing supply system.

Earlier this year we argued that we can fix the housing supply system by making it substantially less risky and incentivising developers to deliver unviable sites with devolved infrastructural spending. Sticking with the current approach will just continue to give developers an easy route out of providing affordable homes.

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