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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

The Tenancies (Reform) Bill – what doesn’t it do?

Since the government announced their support for the Tenancies (Reform) Bill, it has occasionally been wrongly criticised for doing things it doesn’t actually do.

This is understandable – the draft bill hasn’t been released yet, and a lot of people care passionately about private renting. In view of this, I wanted to take this opportunity to address some of its criticisms.

There is a reason this bill has such broad support– it is sensible and credible. It will make a huge impact on the lives of renters, without placing additional burdens on law abiding landlords.

What does the Tenancies (Reform) Bill do?

The bill prevents landlords from evicting their tenant(s) in response to a local authority intervention about the condition of their property. They will be unable to serve a no-fault ‘section 21’ eviction notice for 6 months following the issue of a local authority improvement or hazard awareness notice.

Landlords who have not protected their tenants’ deposit or have not licensed their property when they are required to do so are already prevented from serving these eviction notices. This bill is simply bringing landlords’ other legal requirements into scope.

Will renters be able to use spurious complaints to frustrate their landlords?

No – the bill protects landlords from spurious complaints.

  • Landlords will be prevented from serving a section 21 eviction notice if their local authority has issued an improvement or hazard awareness notice. These notices are only served if a landlord is in breach of their legal duty to rent out a property that is safe and free from health hazards.
  • The bill cannot be used as a last minute delay to eviction. If challenging an eviction notice, the tenant will have to prove that they made a complaint about conditions before the notice was issued. They will lose their ability to challenge the eviction notice, if they do not do so within the two month notice period.
  • The bill specifically prohibits renters from raising issues that are their own responsibility. Environmental Health Officers are well trained in assessing whether a defect is longstanding and genuine or exaggerated and manufactured.

The bill does not add a discretionary element to section 21 possession cases. Renters will not be able to use spurious complaints to slow down court proceedings. If an improvement or hazard awareness notice is served, the eviction notice is invalidated. If it is not, then the landlord is free to proceed.

Will the bill trap tenants in their home?

Absolutely not.

  • This won’t stop renters from moving home – they’ll still be able to hand in their notice with the existing degree of flexibility. If they want to leave the property rather than remain there while the landlord repairs faults and improves conditions that remains their right.
  • If repairs are so significant that a tenant cannot be expected to continue living in the property, it is likely that an Environmental Health Officer will serve a ‘prohibition order’. The Housing Health and Safety Rating System (HHSRS) – what local authorities use to assess private rented properties – advises Environmental Health Officers to serve a prohibition order where remedial work cannot be carried with the tenant in residence.
  • In this situation the local authority must offer temporary or permanent alternative accommodation to the renter.

Will this place an extra burden on local authorities?

The bill will actually help councils carry out their core work – this is why local government is so supportive of it.

  • Councils across the country are working hard to improve their local private rented sector. However, budget constraints mean that their response to poor conditions is usually reliant on complaints from renters.
  • Despite high levels of poor conditions, the numbers of renters reporting problems remains relatively low. The main barrier to renters reporting is the existing lack of protection from revenge eviction.
  • Empowering renters to report poor conditions will help local authorities tackle poor conditions. Often under-resourced, a greater number complaints would allowed them to more strategically target rogue landlords.
  • Protection from revenge eviction will also help local authorities prosecute rogue landlords. Renters’ testimonies are crucial in ensuring a successful prosecution. Yet renters often refuse to give evidence in support of a prosecution for fear of eviction. They may also have already been evicted in retaliation before the case is brought.

Will this slow down the courts?

No, the bill includes measures that will ease the burden on the courts.

  • A government working group has been looking at ways to stop this from happening. This group identified that the introduction of a prescribed form for section 21 eviction notices (so that a precise format has to be used before the notice is valid) could significantly improve the current system. A prescribed form would require certain basic information to be given to the tenant and minimise opportunity for error.

Furthermore – as outlined above – tenants will not be able to use spurious complaints to frustrate the eviction process. This bill does not add a discretionary element to section 21 cases.

The vast majority of landlords won’t be effected by the bill. Landlords who ensure that their properties comply with health and safety standards will still be entitled to issue a section 21 notice with the same degree of freedom that currently exists.

This bill will only inhibit rogue landlords: only those landlords that flout their existing legal responsibilities will be affected. Law abiding landlords should only be affected positively – the bill will give tenants the confidence to report repairs, and stop them from becoming a major issue.

Pete Jefferys
 
I’m a Policy Officer at Shelter and interested in how we can get housing up the political agenda, secure a better deal for private renters and get affordable homes built. Outside of policy, I love exploring new parts of London, sport and going back home to Devon.

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By Pete Jefferys

We need to build homes faster

We need to be building at least 250,000 homes per year just to keep up with our growing, ageing and changing population. Disgracefully, there hasn’t been a single year in the last 25 when we’ve built more than 200,000. Last year we built just 110,000.

Is there any other area of public policy where we’ve failed so badly for so long? With such failure it’s no wonder that there’s a growing consensus that more radical action is needed.

Normally the focus of debate on housing supply is limited to the controversial and often combative process of getting more sites to achieve planning permission. But one piece of the puzzle that doesn’t get enough attention is our slow ‘build-out rates’- how quickly the homes on a site with planning permission are actually built.

In England, average build-out rates are much lower than in some other countries. We build-out new sites at a rule of thumb rate of around 50 homes per site per year, because this is the optimum rate for selling homes at the highest price. Build any faster and you’d need to discount the price in order to sell them all.

This isn’t about builders being greedy though. They need to sell the homes they build at the optimum price, because that’s the price they factored in when deciding how much to pay for the land in the first place. In a highly competitive land market, you need to pay more than everyone else for land which means making more optimistic forecasts of your sales prices (or about how cheaply you can build) than your competitors. Therefore once you’ve paid for the land, you have to build slowly and sell at the optimum price in order to justify your initial investment.

This back-to-front model of development based around paying as much as possible for land upfront constrains almost all of the ‘outputs’ in housing supply – price, quality, size – all for the sake of paying the maximum possible price to landowners to secure the site.

In some Northern European countries though, build-out rates of 550 homes per site per year are achieved: more than ten times faster than the rate we build. Given the development model I’ve described, how can this happen?

It’s a mix of things. First, the development model in these countries isn’t back-to-front. Land is brought into the system via zoning or a development corporation (or both) at a more reasonable price. This means builders’ hands aren’t tied by having spent so much on land and so they can focus on creating high quality homes that can sell competitively in higher volumes.

Second, the development process itself is split up. A master-developer will make a margin by designing the site, connecting plots with infrastructure and services (water, electricity) and then sell those plots to small house builders to build and sell a few homes each. By splitting the process, no one is incentivised to drip-feed homes to control the price.

Third, including a range of different tenures and prices allows faster build-out, because they’re not all being released into the same market. Social housing is particularly suitable for rapid build-out, as there’s plenty of demand for it (just look at council waiting lists), so there’s no problem of market saturation and no need to drip out supply.

In our major report with KPMG, we recommend a series of reforms that would allow us to do development in England a bit more like this model.

We also recommend incentivising faster build-out on existing sites through the tax system.

While splitting sites and changing the development process is the main game in town, a simple reform to speed up the rate homes are built-out would be to put a cost on keeping plots empty once planning permission is granted. With Europe Economics we looked at what would happen to building rates if councils could charge council tax on sites with planning permission equivalent to the homes that haven’t yet been built.

The answer, unsurprisingly, is that homes on the sites would be built faster. In the first years of the tax an additional 13,000 homes would be built on sites in England already with planning permission simply because it would be cheaper to build and sell at a slight discount than pay the tax. The tax also has the added bonus of incentivising those who are simply land trading rather than building to sell their sites to those who will build.

None of these policies is a silver bullet in itself and we do of course need many other policies to increase land supply, investment and link homes with infrastructure. However, speeding up the rate we actually build homes once planning and investment are in place is a crucial step to building the homes we need.

Steve Akehurst
 
I’m a Public Affairs Officer at Shelter, and work on getting affordable housing up the political agenda. I’m particularly interested in how housing relates to living standards in the UK. Outside of work, I enjoy reading, writing and putting in painfully mediocre 5-a-side performances.

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By Steve Akehurst

England’s ‘rent-trap’: just another reason housing is now a top 5 issue for voters

The last few weeks have seen senior politicians in all parties clamber over each other to promise bold action to solve our housing shortage. Both of the men most likely to be PM next year highlighted it as a priority in their last conference speech before the election.

Now, all parties still have a way to go to show the kind of leadership voters want – something we’ll come back to on the blog tomorrow. But for a minute it’s worth reflecting on the transformation: for a generation housing was treated as a marginal issue, something only a handful of anoraks prattled on about. Now it is right at the top of the political agenda. Four years ago housing sat ninth on the list of voter priorities, now it’s consistently in the top 5.

And if you want to know why that is, new research on the ‘rent trap’ by Shelter out today provides just another indication.

It shows that, after paying their rent, 66% of private renters in England are now unable to save a single penny towards a deposit on a home of their own – an increase of thirteen percentage points from 2012. Add in the fact that queues for social housing are at record levels and you reach a grim conclusion: two thirds of people renting are stuck there indefinitely.

Of course, not everyone wants to own (though polls consistently show a majority do). But for that option to now be completely shut off to two thirds of renters, no matter how hard they work or save, shows how out of control our housing crisis has become. Fundamentally, it underscores the failure of successive governments to build the homes we need.

Thankfully, this is an issue that can be solved with the right political will. Our work with KPMG shows it’s perfectly possible to plug our desperate shortage of homes within the next Parliament if it’s made a priority.

And, as our politicians are waking up to, with anxiety on the rise and NIMBYism in decline, there is a huge political prize open to the party which rises to the challenge.

What was particularly promising about conference season is that all three parties are now competing for votes on the real problem: the shortage of homes. Demand-side fiddling and relative cul-de-sacs like the ‘empty homes’ agenda are finally fading into the distance.

But voters affected by the housing shortage won’t be easily led, especially in this day and age. Parties wanting their vote will have to continue to relentlessly talk to their anxieties and experiences right up to polling day, and flesh out their plans for living up to their warm words. This will be no free ride, it’ll require leadership, but it will be worth it for the party which convinces. Because as our research today shows, the problem is worsening with every passing day. As an issue for voters, housing is not going away any time soon.

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

The 5 most ridiculous properties of 2014

We all know it: house prices are out of control. It would take the average person 12 years to save up a deposit nowadays. And renting is pretty terrible too: renters now spend 40% their income on housing costs.

Terrifying.

The sad/rubbish/anger-inducing thing is that what you get for your money is often, well, pretty damn awful.

Here are five of the worst properties we’ve come across in our trawlings:

1. The £40k shed – up for sale in rural Devon.

Semi-detached house? What? IT’S JUST A SHED PEOPLE.

2. The £737 / month studio flat:

Even ‘box room’ is a generous description for this place. Somehow the price was hiked up to £737 a month, and eventually the council forced the agent and landlord to take it off the market. Thankfully.

3. For a bit more you can get this terrible delight:

It’s so tiny you have to stand on a fridge and climb up a ladder to get into the bed. And still (depressingly) 60 people had enquired about the property within a few days of it going up. All yours for £800/month (what?!).

4. Looking to buy? This garage flat went up for £125,000 over the summer:

We did the maths: this place is actually smaller than an official FIFA goal.

5. And the cherry on the awful, awful cake: the £40/month cupboard:

Apparently it’s a loft conversion. I don’t think we need to say any more.

_ _

This is a national scandal. And every day at Shelter we see the impact over-priced, poor quality homes have on families up and down the country.

For decades politicians have failed to build enough affordable homes. And now it’s time to act.

House prices are out of control. We need to build more affordable homes as a country. And we need to build ones that people can actually live in, thrive in, and call home.

If you are angry about this too, join our campaign today calling on politicians to build more affordable homes.

Got any more ridiculous properties? Tweet them to us @Shelter with the #shoeboxhomes.

Deborah Garvie
 
I’m a Senior Policy Officer at Shelter, working on the Localism Act and policies for the delivery, letting and management of social housing. I started off in Shelter’s Campaign for Bedsit Rights, publishing research on the appalling living conditions of refugees and successfully campaigning for legislation to license private landlords and protect deposits. My work is informed by the years I worked with tenants as an inner London housing officer.

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By Deborah Garvie

Renters to take the strain of benefits freeze

In yesterday’s speech to the Conservative Party Conference, the Chancellor proposed freezing working age benefits for two years and a reduction in the overall household benefit cap from £500 to £442 a week.

The freeze is likely to apply to a wide range of benefits, from jobseekers allowance and income support to tax credits and Local Housing Allowance rates. Disability and pensioner benefits are likely to be excluded.  The rationale is that people claiming benefits shouldn’t see their income increase more than those in work, and there has been little or no wage growth for many people for years.

But this somewhat misses the point, because 41% of working age (16-64) LHA claimants ARE working taxpayers.  With many families now limited to renting privately and private rents still shockingly high in many areas, people in low paid work need LHA to bridge the gap between their earnings and their rent.  But the failure of LHA to keep pace with private rents means that it’s becoming more and more difficult to do so.

A further freeze would compound the broken link between real rents and benefits.  LHA has already been subject to a series of cuts:

  • set to the 30th percentile of local market rents;
  • frozen for 2012/13;  
  • increased in line with CPI rather than RPI inflation from April 2013;
  • limited to 1% rises from 2014 to 2016.

Last year, Shelter warned of the impact that the 1% limit would have on ordinary families.   We gave the example of the two bed LHA rate in Solihull, which was £147.40 pw last April. With a 1% cap, this will increase to just £150.36 by next April.  If LHA rates had increased by CPI inflation, they would be £4.20 a week higher at £154.56.  But rents usually rise even faster than CPI.  So by April 2015 the rate paid will be £11.88 below where we expect rents in the bottom third of the market to be.

This all means it will become more and more difficult to find a landlord willing to let to people on LHA.  We’ve already seen landlords publicly evicting all their tenants on benefits for this reason.

Even if you find a landlord willing to take you on, the lower benefit rates may well not cover the rent, which means having to cut back on bills or food.  Recent Shelter research shows that 625,000 low income households have missed a recent essential household bill and are falling through the safety net.

For those who can’t find an affordable private rented home, turning to the council for homelessness assistance is the last resort. But even being accepted as homeless and receiving council help does not mean the end of your problems. The ending of a private tenancy is now the cause of 30% of all homelessness cases, yet councils are increasingly having to send homeless people back to the private rented sector, raising the prospect of a revolving door of eviction and homelessness.  The use of expensive B&B for families is already at its highest level for 11 years.

A reduction in the overall household benefit cap will also apply to temporary accommodation for homeless families.  In order to find affordable places, councils will have to look further and further afield.  Last week’s homelessness statistics show that a quarter of those placed in temporary accommodation are sent to another area – the highest level since records began in 1998.

For larger families caught by the cap, there is simply no affordable accommodation. A couple with three children will have £176 a week to cover rent and council tax and those with four children only £111.  Short term funding for discretionary housing payments, temporary assistance for those struggling with shortfalls, is beginning to run out, leaving councils to bridge the gap from their own stretched budgets.

The failure of successive governments to build enough genuinely affordable housing has pushed more and more families into private renting, with housing benefit taking the strain.  But existing restrictions mean too many are now falling through the safety net.  If these new proposals take effect, many more families will feel the strain and councils will be left picking up the pieces.  As the election looms, the parties have a challenge getting to grips with fixing the welfare system. The question the public will rightly ask themselves is whether the proposals currently on offer are fair.

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