The UK has a proud historic record of providing a safe haven for people fleeing war, conflict and persecution, including Ugandan Asians in 1972, Vietnamese boat people in the late 1970s, people fleeing the Holocaust in Germany and central Europe in the 1940s.
There are many ways in which Tory led governments since 2010 have betrayed that tradition, more of which we will see this coming week as the pernicious Nationality and Borders Bill is debated at second reading, but amongst them the way that housing is provided for those seeking asylum in the UK stands out.
Housing for asylum seekers is currently provided by the government under two types of contract – ‘initial accommodation’ and ‘dispersal accommodation’. Initial accommodation is typically provided in hostels or hotels and is intended for no more than 3-4 weeks. Dispersal accommodation is more likely to be self-contained private rented accommodation, where asylum seekers can live until their claim for asylum is processed.
There is an initial accommodation site in my constituency, and I have frequent contact with the residents there. Most residents have fled situations of extreme danger and hardship and many are deeply traumatised. They are grateful to be in a place of such comparable safety, and very reluctant to complain or raise concerns, they appreciate the staff who often go above and beyond their job descriptions and contracted hours to provide services and support. Yet the appalling nature of this government’s approach is clear to see.
It is common for asylum seekers to remain in initial accommodation for months or even years at a time, far longer than the expected 3-4 weeks. The budget for food in initial accommodation is very low. Asylum seekers are not allowed to undertake paid work, they receive less than £40 a week for subsistence and the only independent cooking facility provided is a single microwave, so opportunities to supplement the food provided on site are limited. The food is poor quality, bland and has little variety, so residents staying in initial accommodation for extended periods often end up eating very little.
The monotony of life in initial accommodation is often intolerable, particularly for asylum seekers who have suffered horrific experiences prior to arriving in the UK. For weeks at a time during the pandemic, asylum seekers have been confined to single rooms, often with no Wi-Fi or data. The lack of positive activity, sense of purpose and distraction from the trauma they have suffered is unbearable for many and mental health support is very hard to access. Asylum seekers are at the mercy of the Home Office, which can take months and years to decide on an application for asylum, and the government doesn’t even have a monitored service standard for some types of applications.
The government contracts do not provide for basics such as underwear, clothing and shoes. These are issues of basic human dignity. Just this week, I heard a heart-breaking story of a woman who broke down sobbing as she was given clean underwear by a kind NHS worker, because she had got her period whilst travelling to the UK and been unable to wash or change for days. This was not provided as a matter of course under the government contract and no-one had previously asked about her needs.
The situation is particularly bad for asylum seekers with disabilities and/or young children. It is very hard for children in initial accommodation to access school places and there are meagre play facilities on site.
The worst of the initial accommodation involves the use of military barracks, and the government was recently found by the High Court to have provided inadequate and unsafe accommodation at Napier Barracks in Kent, where a major Covid outbreak was deemed to be inevitable.
The conditions at Napier barracks are truly shocking. The court found that there were serious fire risks, the barracks were dirty and unhygienic, and that being in an environment which resembled a prison was likely to result in a deterioration of the mental health of asylum seekers. Former residents of Napier Barracks have spoken about the impossibility of sleep at the barracks which also has intolerable mental health impacts – sleep deprivation is often used as a form of torture, and that is what these asylum seekers experienced.
The punitive approach taken by the government is the polar opposite of the response from local communities in many areas where there are initial accommodation sites. In my constituency, there are local community organisations and faith groups who provide support and advice, sustaining hot meals, friendship and conversation, activities and play for children. I know that whenever there is a need for clothing or a pram, our community will strain every sinew to meet that need. There are many moving examples of friendship, solidarity and support.
Our communities are also stepping up to help refugees in other ways. Community sponsorship – a government scheme in which communities can apply to welcome a refugee family to their area – has been growing steadily in recent years, including in my constituency where two families have so far been welcomed by members of our community who have provided housing, funding and support to enable them to rebuild their lives following unimaginably difficult experiences.
The Tories choose to use asylum seekers to fuel their culture war. Instead of upholding our proud tradition as a country of refuge, treating those who come here seeking sanctuary with dignity and compassion and establishing application systems which are efficient and reliable; their housing provision can be anything but a place of refuge, and their asylum system traps people in limbo for months and years at a time.
It doesn’t have to be like this. The essential requirements of human dignity are clear – privacy, nutritious food, clothing and underwear, the ability to communicate with family and legal representatives, access to medical care, including mental health support. This is the very least we should offer to those who come here looking for a place of safety, and these things should be specified and funded in any government contracts for accommodation. There should be additional funding for local authorities with initial accommodation and dispersal accommodation in their areas to be able to meet the needs of asylum seekers, including mental health needs to begin the process of recovering from trauma.
This week, Parliament will debate the Immigration and Borders Bill, an appalling piece of legislation which if it is passed will allow the government to return asylum seekers to the nearest safe country they have passed through on their way to the UK; or to hold them in third country reception centres. Labour will vote against this Bill. I hope that as MPs across the House debate this Bill each one will ask themselves whether this is how they would want their loved ones to be treated should they ever have the misfortune to have to flee conflict or persecution and seek sanctuary in another land. How we treat those who have faced unimaginable pain, hardship and loss is a measure of our society and under the Tories the UK is falling far short.
Helen Hayes MP
Helen Hayes MP, Labour Member of Parliament for Dulwich and West Norwood
On a hot Sunday afternoon in June, housing association tenants covered their flats in banners and protested outside their building. The residents live in Jura House, on the Aberfeldy estate in Tower Hamlets, which is halfway through a 20-year regeneration led by Poplar HARCA in partnership with EcoWorld London.
Much is written about the controversies of estate regeneration projects, but this protest was different. Impatient for change, residents here were protesting that regeneration is not happening fast enough. The proposals for new homes, parks, shops and walking and cycling connections do not represent ‘gentrification’ in their eyes, but as better future for and community, and they want to it happen for their children, before they grow up.
Aberfeldy, in Poplar, sits within the constituency I represent, and the community here face significant disadvantages in terms of access to employment, health and wellbeing. The social housing in Aberfeldy is a post-war development, built to replace the Victorian housing destroyed in the blitz. By the time it was completed in the 1970s, there was already a recognition that the estate was not the success the planners hoped it would be. Divided by roads, many Londoners would never even know this neighbourhood existed: the A12 and A13 surround the site, physically severing it from the rest of Poplar. Today, much of the housing is visibly dated and tired, and Jura House has seen better days. In 2009, the decision was made to regenerate the estate.
Since 2012, almost 700 homes have been delivered, including 165 homes for social rent, alongside a much-loved new public park called East India Green, complete with art created with the local community. This summer a further 223 homes will start to be handed over to new occupants and the first new shops on Aberfeldy Street will open, along with a new GP surgery, community centre, and a nursery. However, this is the last phase of the scheme that currently has full planning permission.
Due to the success of the initial phases, Poplar HARCA and EcoWorld London decided to develop a new, more ambitious, masterplan for the wider area and a planning application is expected later this year. Poplar HARCA have been talking to residents throughout. A Residents Steering Group meets regularly with the project team, including the architects and planners, and the extremely detailed, and at times robust, feedback from these discussions has informed the emerging plans. Alongside this, public consultations have collected feedback from residents across Poplar.
These efforts to understand residents aspirations has resulted in huge public backing for change. When a ballot was held last year, 93% of residents endorsed the regeneration plans, on a 91% turnout. An impressive and almost unprecedented mandate in favour of proceeding with estate regeneration.
The proposals go beyond replacing and increasing the existing council housing in Aberfeldy, which is of course funded in large part by new homes for private sale – a necessary trade-off that the community understands and endorses. Alongside providing up to 1,600 new homes, the Aberfeldy New Masterplan is designed to fulfil several strategic objectives. Top of this list is improving connectivity across Poplar, piece address the lack of safe connections across the A12, A13 and the River Lea, that has left residents here physically and mentally disconnected from the rest of London for generations. Improved walking and cycling routes along a new green corridor lined with more welcoming and better-connected public parks and spaces are designed to turn Aberfeldy from an estate into a place. This is underpinned by one big move – to close a vehicular underpass and transform it into a safe, vibrant cycling and walking link. These elements of the masterplan are popular, particularly with young people, who want a safer neighbourhood where they can walk or cycle to school, rather than be driven there by their parents.
So why are residents protesting? Well, after many years of talking about regeneration, residents want to see the promises of positive change delivered, and fast! Witnessing your neighbours being successfully rehomed in the earlier phases while you face the prospect of waiting for years, along with the added uncertainty of not knowing whether the masterplan will happen at all, is understandably not a welcome one.
A masterplan on this scale is a complicated and costly process. The bigger and more ambitious the plan, the more social and economic objectives it seeks to achieve, the more complicated and lengthy the process becomes, and the difficulty of balancing the competing and often incompatible priorities of communities, planners, policy makers and politicians become more pronounced. As time moves on so does the political weather, with individuals, councils and political priorities changing, along – potentially – with the prospects of support needed for the project to be delivered. Satisfying councillors and planners that you have adequately met, or given acceptable reasons for why you can’t, the ever-growing list of national, London and local planning regulations, is increasingly technical and time consuming, and with all parts of the scheme impacting the rest, difficulty in one area can return you back to square one on others.
This challenge is greater too on projects where some of the wider regeneration aspirations can only be delivered with public funding, and these funds often have fixed deadlines against delivered outcomes. All of this can only be met if the different private and public organisations involved are on the same page, working to achieve the same goal and mindful of the bigger picture. It is fair to say that isn’t always the case. Is our planning system capable of delivering complex projects such as this one?
The planning system is often criticised for being unresponsive to the needs and voices of local people when a scheme has been approved against the noisy opposition of (usually a small number of) residents. Perhaps a truer measure would be if big bold, regeneration plans that have the support of a community prove too complicated for the planning system to deliver.
The residents of Aberfeldy know what they want. As their banners adorning Jura House called out: “More green spaces”, “better shops”, “new homes, new parks, safer streets and subways”. “Why are we waiting?” asked another. The largest banner, held aloft by two residents stated, “pull us down now”. Jura house residents have told us what they need, and meeting their aspirations successfully and quickly is a test of whether our complicated and labyrinthine planning system is fit for purpose.
The Labour Party created the planning system and continues to defend it against the Conservative plans to overhaul it to make it easier for developers to build. Where we have the power to do so, it is vital Labour demonstrates that the planning system as it is can deliver for communities like Aberfeldy.
Unmesh Desai
Unmesh is the Labour and Co-operative Party London Assembly Member for City & East.
In the UK today, there are around 320,000 people without a home.
Homelessness comes in many different forms; some people are sleeping rough on the streets while others may be staying on friends’ sofas or staying in a hostel long-term.
Of those without a home, 6000 are men and women who served this country as a member of our armed forces, only to find themselves experiencing some form of homelessness.
The reasons for this are complex, often stemming in a difficulty in adapting to civilian life after years spent with a strict regimented lifestyle.
We know that veterans are disproportionately likely to be impacted by a wide range of challenging and often intersecting issues such as post-traumatic stress disorder, drug and/or alcohol misuse, depression and other mental health problems.
These, coupled a difficulty in entering the civilian jobs market are major factors that go some way to explaining veteran homelessness.
Even before the pandemic struck, many veterans were slipping through the net or finding themselves without any form of support. They are often unable to be supported by mainstream homelessness charities not equipped to meet their needs, thus turn to often cash-strapped local councils.
We often think of our armed forces as protecting us from external threats, keeping us safe and secure from those who wish to harm us or our way of life.
Yet as if we needed reminding any more, the Coronavirus pandemic has shown that our armed forces keep us safe in so many more ways than we can even imagine.
It was the armed forces that were deployed to test people at the start of the crisis, who ensured that vital supply chains kept running and who are helping to secure the effective roll-out of the vaccine.
At Community’s biennial delegate conference in 2019, members of the union came together to decide our priorities for the year ahead. Delegates took the decision that ending veteran homelessness should be a priority campaign for us going forward.
We wanted to support those who have given so much to us as a country. We ran, walked and cycled to raise money for a local charity to help end veteran homelessness and between us we raised over £6,000.
We created a bespoke learning and training offer for veterans to improve their employability, and we successfully managed to change Labour Party policy. Our members up and down the country have been collecting warm winter clothes, toiletries and other necessities to support veterans.
We will never be able to thank the servicemen and women who have served us at home and overseas fully. However, the very least we can do is ensure that they have a roof over their head and a bed to sleep in at night.
One way we can all work to end veteran homelessness is to encourage more organisations to sign up to the Armed Forces Covenant. The Covenant is a promise by the employers to ensure that those who serve or who have served in the armed forces, and their families, have equal opportunities including at work, and when applying for jobs.
The government have a key role to play too and they must not miss the opportunity presented by the Armed Forces Bill. They should use the Bill to set measurable, national standards and empower local authorities to deliver including by providing ring fenced funding to councils for specialised mental health and substance misuse support services.
Every government and every political party talk a big game when it comes to supporting our armed forces. Now is the time to deliver, and the time to end this national scandal once and for all.
Melantha Chittenden
Melantha Chittenden is Head of Communications and Media at Community trade union and leads on the unions priority campaign on ending veteran homelessness.
Councillor Dave Ward returns from Kosovo with lessons in development finance. He argues that allowing the land and development supply chain to share in the upside of apartment sales can lower the barriers to entry for smaller housebuilders.
I have just returned from Pristina, Kosovo where I got my new apartment ready for a summer rental to a couple of German students who are volunteering there for the summer and needed a place to stay.
As Chair of Planning at the London Borough of Merton, I am always interested in housing and planning policy, particularly around building new homes and it was very interesting to see and learn about the differences between the UK, specifically London, and Pristina.
Firstly, the scale is a lot smaller, Pristina is a city of nearly 150,000 people, just over eight per cent of the total 1.8 million population of Kosovo, and growing. This quite closely compares with London’s 7m people, roughly 10% of the total population of the UK.
So both cities are the centres of government, the financial sector, the media and the headquarters of many national and international businesses and other organisations. As in London this attracts a higher population as people come to the capital for work, which then leads to housing pressures.
Pristina is in the middle of a housebuilding boom. The block where I now live (for some of the year) is ten storeys, with roughly 60 apartments varying in size from small studios to three-bed apartments. It is one of at least eight similar blocks, either completed or under construction, just within a few hundred metres, in an attractive location just ten minutes walk from the city centre.
The most interesting thing I discovered about housebuilding in Pristina is they way it is financed which is very different from the UK. Typically a developer will find some land upon which a block could be built, purchase it from the original landowner, pay contractors to build the block, and suppliers for the materials, then when it is complete, sell or rent the homes and try to make a profit, just like here.
The difference is that the original landowner, contractors and suppliers are often paid, at the end of the project, in completed properties.
For example, the company which supplies the concrete struts which form the frame of the building might, instead of cash, upon completion of the project receive a floor, 6 or 8 properties which they can sell, keep or rent as they wish. The same for the building contractors, glaziers and anyone else involved in the project.
I was surprised at this and wanted to know more so, as I was due to meet the owner of the company which built the block I live in, I asked him about it.
His company usually funds around half of the construction costs of a new development in this way. It is kind of a loan, without interest, but it is more expensive. He estimates that building a new block of apartments would be 5 to 10 per cent cheaper if paid up-front in cash. This is a compensation for the contractors, for instance a building firm. They need to pay their workers, purchase the materials and do their work, paying up-front, on the promise of a number of properties upon completion, not knowing for certain what they will be worth at that stage. They are taking much of the risk, and therefore take a higher return.
This model is used widely in Kosovo and has been borrowed from nearby Turkey where this has been the norm for development for some time.
The practical implications of this are that housebuilding is slightly more expensive, but easier to do for those without huge amounts of up-front capital. So building is not dominated by large developers funded by the major banks or the very wealthy. A relatively small company, such as the family firm which built my block, can get into the housebuilding business and deliver new homes from very small beginnings.
Property prices and rental values in Pristina are, like London, higher than the rest of the country. They are much lower than London in actual terms, but also lower in relative terms compared to average income, wages and cost of living in Pristina. Housing is genuinely affordable for those on modest or low incomes.
To rent an apartment like mine – 2 bedrooms in the centre of town – a single person would need a salary around the middle range in Pristina. A couple sharing would find it more affordable. This is for a sought-after area near the centre of town. Move a few miles out, a bus ride from the centre and rents and prices become comfortably affordable for the lower paid.
Could this be replicated in full or in part in the UK? Could we open up housebuilding to smaller entrepreneurs, to housing associations, non-profit organisations, and to Local Authorities to build new housing, without the need for huge amounts of capital up front?
I think it is worth looking into.
Dave Ward
Dave is a Labour Councillor in the London Borough of Merton where he is Chair of the Planning Committee. He represents the ward of Colliers Wood.
Since 72 people lost their lives in the Grenfell tragedy on 14 June 2017, the cladding and building safety crisis has spiralled. Estimates vary as to how many households are affected. The End Our Cladding Scandal (EOCS) campaign believes that up to 11 million people are now caught up in the scandal. Luxury flats and social housing alike are affected. This article examines the impact of the cladding and building safety crisis on shared owners, and asks whether it lays bare fundamental flaws in the shared ownership model.
June 5th saw a National Day of Developer Protests outside new home sales offices, organised by local campaigners and supported by the national End Our Cladding Scandal (EOCS) campaign. The protests will be followed next month by a Leaseholders Together rally – planned in collaboration with the National Leasehold Campaign (NLC).
How long will it be before the spotlight shifts from developers to housing associations? How long before mass protests are taking place outside housing association offices and first-time buyer events?
What has gone so wrong that shared owners who placed trust in the promise of ‘affordable homes’ now face crippling bills? What are housing associations doing to support shared owners facing life-changing building safety remediation costs? Is it enough? What lessons may be learned, and what more can be done immediately to help shared owners and leaseholders in dire situations?
The Affordable Homes Promise: What’s Gone Wrong?
Schrödinger’s Flat
Shared ownership has been described as ‘Schrödinger’s flat’; it is simultaneously affordable and unaffordable. Housing associations define affordability by way of contrast to short-term costs of buying outright or renting, or accessibility of a mortgage deposit and loan. But these definitions oversimplify and distort understanding by failing to specify timescales of comparison, and by conveniently overlooking financial obligations imposed by leasehold contracts – such as indexed annual rent increases – and costs not referenced in lease terms, including lease extension. A rent that is often set initially as a percentage of the unsold share of the property, typically 3%.
Shared ownership is not ‘ownership’; it is an assured tenancy. And given that shared owners are liable for 100% of all maintenance and repair costs, on top of service and administration charges, and are now expected to pay for building safety remediation works too, it is clearly not ‘shared’ either.
The National Housing Federation chirpy marketing campaigns reassure first-time buyers shared ownership doesn’t mean sharing their home with a stranger but fail to explain clearly the risks arising from 100% liability for all costs. In fact, sponsored content encourages first-time buyers to believe ‘there’s no catch’. Not true! Something that the devastating cladding scandal has brought into stark relief. Problems for shared owners are complex and inter-related, full stop. Building safety issues massively compound inherent flaws and contradictions in the shared ownership model.
Staircasing rates were already dismally low: a mere 2.3% staircased to 100% in 2018-19. (It’s worth noting that this percentage is not analysed between staircasing to 100% to achieve full ‘ownership’, and a simultaneous sale and staircasing transaction undertaken purely in order to sell – a crucial distinction). The building safety crisis means any shared owners who planned to staircase to 100% are now likely to be unable to obtain mortgages to do so.
Shared owners who are unable to staircase to 100% have no statutory rights to lease extension. All things being equal, the cost of lease extension increases year on year. Particularly once the all-important 80-year threshold has been breached. And, in the absence of lease extension, shared owners’ homes will devalue dramatically over time (a separate issue from the nil valuations arising from building safety issues).
A significant number of shared owners will be trapped in negative equity situations as a direct consequence of building safety remediation charges. Those who purchased smaller shares, say 25%, are particularly disadvantaged. The people suffering the most severe financial distress may be those who had least to lose in the first place.
Going back to that £100,000 charge Irwell Valley Homes plan to levy on their shared owners… Although details remain sketchy, the Government has proposed a loan scheme capped at £50 monthly. At £50 per month, £100,000 would take 2,000 months, or 167 years to repay. Such charges are clearly a problem not just for this unfortunate generation of first-time home buyers, but for the next couple of generations too, perpetuating inequalities patently at odds with leveling up agendas.
How are Housing Associations Supporting Shared Owners?
Credit Loans
Some housing associations have obtained authorisation from the Financial Conduct Authority (FCA) to offer interest-free credit to shared owners where recharged building safety remediation costs are unaffordable. Although loans from housing associations have the advantage of being interest-free, unlike bank loans, this option raises a number of troubling questions.
The assured tenancy nature of shared ownership renders shared owners extremely vulnerable to repossession of their home in the event of mortgage or service charge arrears. Given the risks and unavoidable costs the current shared ownership model exposes shared owners to, what confidence can they have that housing associations and lenders have their best interests at heart? Why should they believe housing associations would be flexible as life circumstances change over the potentially life-long timespan of such loans? Additionally, housing associations that have already sold off freeholds may have tied their own hands regarding their ability to assist shared owners facing possession by lenders.
Such concerns are likely to be exacerbated by proposals to sell off shared ownership portfolios to institutional investors, whose primary motivation will be to maximise returns for their own shareholders and clients, not to act in the best interests of shared owners. This not only raises disturbing questions for the future of shared ownership, but also potentially stymies meaningful attempts to fix the broken housing market.
Buyback
Maureen Corcoran – a former board member of one of the largest housing associations in England, a member of the G15, and former Head of Housing in London for the Audit Commission – suggests that: ‘housing associations that sold these properties on a shared ownership basis could buy the shares back from anyone who is struggling and unable to move’. Housing associations counter that they do not have the financial means to do so at scale. Whilst some housing associations express commitment to do so in ‘exceptional circumstances’ it’s not at all clear what would constitute exceptional circumstances.
Where policies subtract the cost of any known or estimated remediation costs from the buyback valuation there may be little benefit of shared owners pursuing buyback as a way out of an impossible situation.
Back to back staircasing (a simultaneous staircasing and sale transaction) is sometimes required due to indexed annual rent increases (RPI plus 0.5%-2%). Where such increases have resulted in rent levels becoming more expensive than local private rents – or even specified rent on local new-build shared ownership properties – the property may become unattractive in the market place. Shared owners may have no other option but to eliminate the specified rent component, regardless of the erosion of any gain by the increased selling costs arising from the staircasing transaction.
Shared owners whose building doesn’t have a satisfactory EWS1 form face additional problems. Potential buyers are not currently able to obtain a mortgage due to nil valuations. To purchase a part share buyers have to meet affordability criteria; something that is highly unlikely to be the case if they are in a position to make a cash offer. Shared owners in this situation may have no alternative to back-to-back staircasing to 100% to facilitate a cash sale on the open market.
Confirmed or potential remediation costs will drastically reduce the purchase price. This is particularly problematic for shared owners whose housing association has a policy requiring shared owners to pay over to them any difference between the valuation and the purchase price.
Subletting
Subletting is generally prohibited on shared ownership properties. This is justified by housing associations on the basis that shared ownership properties are supposed to be the primary residence of the shared owner, and not a source of profit. Such an argument erroneously conflates ‘accidental landlords’ – who may need to relocate temporarily for a variety of reasons – with commercial for-profit operators. The no-gain requirement falls away once (if) a shared owner staircases to 100%, effectively penalising shared owners who can’t afford to staircase. Or, in the case of those whose buildings are found to have safety defects, are unable to staircase due to unavailability of mortgages.
The restriction on making a gain applies only to shared owners themselves and not to housing associations, who benefit from income streams generated from shared ownership homes; nor to institutional investors eyeing up shared ownership portfolios.
When exceptional permission to sublet is given it is on a ‘no gain’ basis; with no acknowledgement of the fact that in real life it is practically impossible for landlords to plan to break-even – not least due to the unpredictable nature of shared ownership service charges (including retrospective annual adjustments). Shared owners seeking to sublet rapidly discover they have taken on all the liabilities of home ownership, with none of the financial benefits and flexibility purchasing a home usually provides.
Are Housing Associations Doing Enough?
There are clear financial challenges for housing associations in addressing the building safety crisis. But growing vocal discontent across social media and elsewhere indicates that shared owners find it hard to accept how little housing associations are doing to support them now they are facing financial ruin. More than a few shared owners now regret the mistake of trusting persuasive marketing rhetoric.
Strong sector leadership is long overdue to protect shared owners from the worst consequences of a shared ownership model that has always exposed them to unlimited risk and costs regardless of affordability claims.
The following is intended to indicate some areas where the current offering could usefully be reviewed, by no means an exhaustive list.
Shared owners report that transparency and communication on building safety and related costs is poor. This is unacceptable and should be corrected as a matter of urgency.
“We know a bill is coming… Just not when, or how much…?”
A sector-wide review of whether current provision of expert financial advice and debt counselling adequately meets identified need.
A sector-wide published commitment to clearly identified policies to support shared owners facing building safety issues, including:
Not to initiate possession proceedings for shared owners in arrears due to building safety remediation charges (including waking watch and increased insurance premiums).
To waive marriage value on lease extensions (something MTVH have already committed to), and to calculate the premium on the percentage share held (where applicable) rather than total value.
Not to charge any difference arising between the valuation and the purchase price.
Work with mortgage lenders on whatever actions are required to facilitate access to consent to let or buy to let agreements.
Work with Government to remove, or apply considerable discretion on application of, restrictive and hard to justify restrictions on subletting, including no gain requirements and time limits.
Withdraw any shared ownership properties with potential building safety issues from the market unless it may be evidenced that there are no remediation cost consequences arising for first-time buyers.
Review marketing terminology to ensure buyers have full knowledge of exposure to long-term risks and costs. This information should include – but not be restricted to – building safety and defects, and associated costs and obligations. These should be simply, transparently and adequately explained to enable informed decision-making (in compliance with Consumer Protection from Unfair Trading Regulations 2008).
Review implications of cross-subsidy model for achievement of policy aims for shared ownership (affordability, fairness and transparency), and in relation to potential conflicts of interest.
What Lessons Can Be Learned?
The building safety crisis has bought into sharp focus a number of troubling aspects of the current shared ownership model:
a vast discrepancy between expectations created by marketing strategies and real-life outcomes;
adverse consequences of a policy and research focus on access to shared ownership rather than on performance of that tenure over the long-term and the success of exit strategies in achieving foot on the housing ladder policy aspirations;
adverse consequences of a policy and research focus on financial risks, costs and benefits arising for housing associations and mortgage lenders rather than those arising for first-time buyers;
lack of ability and will of housing associations to intervene where required arising from the nature of some partnership arrangements;
failure of housing associations to solicit and sincerely take account of the concerns of long-term shared owners and campaigners;
the conflict of interests which inevitably arises from the cross-subsidy model; and
failure to fulfil fiduciary duties.
These matters should surely be of grave concern for housing association Boards of Trustees and likewise for regulators including the Regulator of Social Housing, the Charity Commission, the Advertising Standards Authority, and the Competition and Marketing Authority.
Thanks are due to Dr Audrey Verma (campaigner), Deepa Mistry (shared owner and campaigner), Dr Alison Bancroft (shared owner and campaigner), Ed Spencer (shared owner and co-founder of One Housing Residents Action Group) and Neil Goodrich (housing professional) for support in writing this article. Any errors are, of course, my responsibility and mine alone. I welcome feedback on the content.
Sue Phillips
Sue Phillips is an accountant (ACCA) who spent much of her career working in the not-for-profit sector. She is now semi-retired. She says she never expected to become a housing campaigner!
She purchased her own flat via a shared ownership scheme in 1999, staircased to 100% in 2013, and completed a lease extension in 2020.
Her own experience of shared ownership led her to start campaigning in 2019, with a particular focus on greater transparency on potential long-term costs and risks of shared ownership. She campaigns under the moniker Shared Ownership Resources.
LONDONERS ARE LANGUISHING IN TEMPORARY ACCOMMODATION HUNDREDS OF MILES AWAY – WE NEED A RETHINK.
Over the last several months London’s Labour Housing Group has been on a fact-finding mission to discover why out-of-area temporary accommodation is out of control. The findings of our latest research spells out the scale of the challenge we now face and you can read the write-ups from the Guardian or Inside Housing.
If there is one symptom of the housing crisis that brings to life its severity, it’s forcing the most vulnerable Londoners to live in homes as far as Manchester and Bradford. It’s a national scandal and only a matter of time before someone loses their life to what can only be described as social cleansing by stealth.
According to our analysis, 55,000 Londoners have been forced out of their local area because councils can no longer afford to rehouse them locally.
The number of people being rehoused outside of their local area is the highest since records began in 1998. Under Labour, one in ten people placed in temporary accommodation were placed out of their local area. Under the Conservatives that figure is closer to one in four.
Londoners in temporary accommodation are often the most marginalised. Parents with dependent children make up two-thirds of such households. A third are classified as vulnerable, with the vast majority with physical disabilities or mental ill health. The only solace we can take from the profile of families placed in temporary accommodation is that fewer victims of domestic violence, pensioners and pregnant women are placed outside their local area.
From a rudimentary mapping exercise of postcodes of two London authorities – Merton and Barking & Dagenham – it is clear that a ripple effect is taking place whereby wealthier boroughs, or where rents are higher, place their residents in neighbouring boroughs where rents are cheaper, which pushes homeless residents in those councils further out.
In what has traditionally been an issue for London and Londoners, out-of-area temporary accommodation is on track to become a nationwide problem: 92% of out-of-area placements were made by London authorities in 2015/16. That figure fell to 84% by 2020/21. If authorities outside of London continue to rehouse people outside of their local area at the same rate they are currently, within a decade they’ll be responsible for a third of all out-of-area placements.
What accounts for these developments?
Anecdotally, there is evidence that some London authorities aren’t doing enough. Councils have a statutory duty to place families as close to their local area as possible, but far too many are being sent hundreds of miles away.
Some councils have failed to forewarn the authorities that families are heading off to – making it difficult for them to access local services such as schools and doctors when they arrive. Last year Basildon Council reported that London authorities failed to forewarn the council of 58% of cases they received. The lack of communication about precisely how long an out-of-borough placements is – and it’s not uncommon for vulnerable families to be placed in temporary accommodation for over a decade – has seen young people remain in schools that they’re no longer able to travel to. One Londoner forced to live in Birmingham had to quit his job.
Other councils have been challenged in the courts – as the tragic story of Nzolameso vs Westminster City Council illustrates. Ms Nzolameso was in poor health. She had HIV, type II diabetes, depression and hypertension. She had five children between 8 and 14 years old, all of whom attended schools in Westminster. Her doctor was in Westminster and she also had a support network of friends locally who helped with her children.
When Westminster offered Ms Nzolameso accommodation over 50 miles away, she appealed. During the appeals process Westminster discharged its duty to house Ms Nzolameso and took her five children into care. The children were even separated between three different foster placements. It took a year and a verdict from the Supreme Court to change the outcome in what is clearly an extreme case but nonetheless illustrative of the human cost of the housing crisis. Too frequently it appears the wishes of tenants are not always given the consideration they deserve.
Yet the problem extends far deeper than individual authorities.
When he was Mayor of London, Boris Johnson criticised the approach taken by councils as “Kosovo-style social cleansing”. Well, the chickens have come home to roost.
There’s lots to unpack here and London’s Labour Housing Group will be doing so on Monday 7th of June at 18.00. Siobhan McDonagh MP will join panellists Jane Williams, the Chief Executive of London-based homelessness charity Magpie, newly elected London Assembly Member Sem Moema and I to discuss why we are where we are and what can be done to tackle out-of-area temporary accommodation. Ross Garrod will be hosting and it’d be remiss of me not to mention that he and fellow London Labour Housing Group member Rachel Blake have done a lot of behind the scenes work to bring our research and event to fruition.
Senior Policy Researcher in Parliament, Previously worked for the Shadow Minister for Local Government and the Local Government Association and is on the Executive of London’s Labour Housing Group.
Growing calls for 2020s to be the “decade of housing-with-care” as new task force awaits
At the end of March, more than 40 MPs, Peers, charity and private sector leaders joined forces to urge the Prime Minister to make the 2020s the “decade of housing-with-care”. The signatories to the open letter – who included Labour politicians, such as Siobhain McDonagh MP, Parliamentary colleagues from three other parties, plus household organisations like Age UK, Legal & General, the British Property Federation and Campaign to End Loneliness – said that “just as previous decades saw the expansion of the care home and home care sectors, there is now a new consensus that the 2020s need to be the decade of housing-with-care”.
Why, you might ask, should there be such widespread clamour for the growth of housing-with-care at this particular moment? At the top of the list is the urgent need to solve the UK’s social care crisis – made more pressing than ever by the Covid-19 pandemic. While finding a consensus on how social care is funded is pivotal, of equal importance is answering the question of where social care is delivered. Are we to stick with a system largely defined by two options, a care home or care at home, or are we to give older people a true choice by creating a greater variety of care settings?
There is a growing recognition that – for the social care sector – it cannot be business as usual. New ways of caring for older people are needed, which combine independent living with high-quality care and support; which not only enable older people to live longer but to live healthily for longer; which tackle the loneliness crisis by keeping older people connected with their community. As the letter’s signatories say, we need to create a “world-class system of housing-with-care that couples a focus on independence and prevention with a safety net of care services and consumer protection”, to “complement existing care options such as care homes and home care.”
It is an argument that has been gathering serious Parliamentary momentum in recent months. Alongside the open letter to the Prime Minister, MPs and Peers from four different parties, plus influential crossbencher Baroness Sally Greengross, contributed to a ‘Housing with Care Grey Paper’ in March with policy ideas to help grow the sector.
Labour politicians have been providing a strong voice on the issue, with Shadow Social Care Minister, Liz Kendall, arguing in a major speech a couple of weeks ago that we need more options inbetween a care home and care at home. The party’s former Shadow Secretary of State for Communities and Local Government, Andrew Gwynne, pressed the Government to respond to the open letter to the Prime Minister, and consider setting up a new task force to expand housing-with-care.
Why a task force? The challenge with growing housing-with-care is that it straddles multiple Government departments and so requires a new, collaborative vehicle for action. The “housing” part of housing-with-care lies with the Ministry of Housing, Communities and Local Government (MHCLG), while the “care” part stands with the Department of Health and Social Care (DHSC). A new Housing-with-Care Task Force, which Ministers are actively considering, would bring the two together to thrash out concrete policy changes so that the sector can play its full part in the social care system.
While the task force would need to decide its focus, there are a number of core policy areas that it would have to address to make the 2020s the “decade of housing-with-care”. Just as the expansion of care homes in the 1980s and 1990s and homecare in the 1990s and 2000s was largely driven by pieces of legislation and regulation specific to these sectors, we now need the same for housing-with-care.
That means properly defining housing-with-care in the planning system so it can be more easily built, providing strong consumer protection for residents moving into housing-with-care, and developing appropriate models of tenure. Ensuring the sector remains affordable for older people of all incomes is also crucial.
Some of these policy changes might sound minute, niche, even quite dry. The results will be anything but. A social care system where living a thriving, active lifestyle and receiving care don’t have to be in opposition but can be achieved together. Retirement communities which help regenerate high streets and bring people of all ages together through shared activities and services. Older people having great options to ‘right size’ and homes freed up for younger people. The list goes on.
We are on the verge of overcoming a perennial public policy challenge: getting different Government departments to talk to each other across competing priorities and bring about collaborative change. As we move closer to a cross-government Housing-with-Care Task Force, the prospect of a varied and imaginative social care system which meets the diverse needs of our ageing population is in sight.
Let’s keep up the momentum to make this a reality.
Sam Dalton
Sam is a policy and public affairs professional with expertise in housing, social care, social connection and loneliness. He works for the representative body for housing-with-care operators in the UK, ARCO, and previously led an inquiry on strengthening ties between young and old with the parliamentary group on social integration.
Sam has written for The Fabian Society and Left Foot Forward, as well as think tanks, social ventures and charities.
As the cabinet member for housing at the UK’s largest local authority, one thing I quickly learned was that it’s not simply enough to assume that a roof over someone’s head solves all their problems. Tackling homelessness is of course very high on the agenda, but the quality of accommodation and the support on offer is also key.
That’s why in Birmingham we are focussing on the exempt accommodation sector. Exempt accommodation is an unregulated type of supported housing. It is often used as a means of housing those with no other housing options, such as prison leavers and people from other vulnerable groups.
This sector has almost doubled in size in the city over the last two years, from 11,500 units to close to 20,000 and we’re seeing huge increases of exempt housing in some neighbourhoods, as private landlords build up portfolios of leased and owned accommodation, and then apply for registered provider status, exempting them from licensing regulations and local scrutiny. Over £200 million is spent on such housing in Birmingham alone.
Such accommodation can only be regulated through the Housing Benefit system and the regulatory standards for registered providers, overseen by RSH (Regulator of Social Housing) not local authorities on the ground. There is little or no regulation of care, support or supervision provided, merely an extremely vague requirement for it to be ‘more than minimal’. Lax Tory regulations means the sector is ripe for corner-cutting, exploitation and profiteering.
And, while there are many responsible and respected providers, there are also horror stories of vulnerable people being exploited and of neighbourhoods being blighted by an explosion of sub-standard accommodation.
So as a Labour Council what are we doing to fix things in Birmingham?
We’re focusing on halting the growth in exempt housing while vital oversight work can be carried out to:
Improve property standards through inspection and intervention
Improve support through increased scrutiny of claims
Gather intelligence of suspected organised criminal activity and dealing with anti-social behaviour with the police
Better scrutinising new claims for Exempt status
In Birmingham we are working with responsible providers who, once accredited, become the main point of referrals for statutory agencies.
We are also rolling out a Quality Standards Framework and a Charter of Rights for residents (both co-designed with people who live or have lived in exempt accommodation) to set a local standard until Government regulations catch up.
A growing number of key partners across Birmingham have now signed up to only referring to providers that adopt both the Quality Standards and Charter of Rights. This of course requires a robust inspection regime and we are piloting one in the city.
But there is only so much we can do as a Labour Council. Ultimately we need the government to change course too.
The exempt sector has been, and sadly continues to be a rich market and there’s a clear need for stronger regulatory powers so that those who provide poor standards to their tenants, face real consequences. This effort is being spearheaded in Parliament by Steve McCabe, Liam Bryne and Shabana Mahmood on behalf of Birmingham’s Labour MPs, and new West Midlands PCC – Simon Foster.
On 19th April Birmingham Labour Group in collaboration with the Birmingham Labour MPs launched a city wide petition calling on Government for urgent policy reform:
The local impact in some areas is causing a misery for tenants and local communities. We firmly believe there should be local impact assessments implemented and tests of whether someone is fit to be a landlord to protect communities. We just need government support to do so and have put a bill to parliament that would guarantee this.
In Birmingham we’re making a difference and our message to unscrupulous providers is that we’re coming for you and your time will soon be up.
Cllr Sharon Thompson
Sharon Thompson has been a Labour Councillor for the Birmingham North Edgbaston ward since 2014.
Once homeless herself, and a single mother at an early age, Cllr Sharon Thompson is currently the Cabinet Member for Homes and Neighbourhoods and on the WMCA Housing & Land Delivery Board.
New polling by the Fairer Share campaign hints at the huge potential gains in store for a party that is brave enough to reform our broken property taxes. With local elections around the corner, four out of ten people would consider switching their vote to a party pledging to replace council tax with a fairer property tax system with lower annual bills for most people and local services maintained at the same level. In the so called ‘red wall’ areas of the country, the figures are higher with almost half of all people questioned saying they would consider switching their vote.
It should come as no surprise to see the extent to which many people are fed up with council tax. It is outdated and highly regressive, both within local areas and between them. Council tax hits the poorest residents of our society hardest while mansions or luxury apartments in Westminster or Kensington barely notice council tax, deeming it less than a service charge.
The worst hit areas are the regions of the United Kingdom once known as Labour’s heartlands, with the North East getting hammered the hardest. Hartlepool, for example, is the worst hit local authority. Residents there pay 1.31% of the value of their homes in council tax, whereas in Westminster, the average resident pays just 0.06% of their property value in council tax. That means the average resident in Hartlepool has a council tax burden 22 times that of Westminster.
Yet to talk about the regional disparities is to underplay the full extent of the problem. Council tax is derived by bands based on 1991 house valuations. The bottom bands pay a larger percentage of property value than the top bands, and houses at the bottom of each band pays significantly more than a property at the top of it.
At Fairer Share, we propose replacing council tax and stamp duty, which has a whole host of problems that hinder economic growth, with a flat property tax of 0.48% of the value of the property.
Flat taxes usually aren’t considered great progressive victories, but that is merely a reflection of the backwardness of the current system (something that shouldn’t be surprising given that portable MP3 players are five years newer than the current council tax regime).
Replacing council tax and stamp duty would be beneficial 76% of households across the UK. There are particular benefits for the poor, nearly 90% of the poorest in society and would add nearly £300 to their average net income per year. Although, on the face of it a neutral policy, it would also have social justice implications, with our analysis showing that large majorities of households in all the UK’s major ethnic minority communities benefiting from a move from council tax to a proportional property tax.
Remarkably, this policy can be achieved without taking a penny out of the treasury’s coffers. The flat rate of 0.48% would return exactly the same revenue as that lost by council tax and by stamp duty, and helping to preserve the vital local services on which we all depend. Raising money for police or social care with regressive precepts could be a thing of the past as local authorities could flex their local rate and raise revenues more fairly from their residents.
Support for the policy is growing in Westminster. Labour’s Grahame Morris is a key supporter, having pushed Boris Johnson on the policy at Prime Minister’s Questions recently. But the policy cuts across party lines, with a number of northern Conservative MPs also supportive.
Across the UK, more than 120,000 households have signed our petition calling for a proportional property tax. A progressive Labour party should also be wholeheartedly backing the introduction of a fairer system of property tax that will deliver in real terms for the majority of voters up and down the country.
Andrew Dixon
Andrew is the Founder of Fairer Share, the campaign to replace Council Tax and Stamp Duty with a fairer system through the introduction of a Proportional Property Tax.
Housing Revenue Accounts (HRAs) manage council housing. They receive no subsidy. Their income is overwhelmingly from tenants’ rent and service charges; 94% of the collective income of all HRAs. The quality of the homes, and hence the living conditions of tenants, depends upon key housing components (bathrooms, kitchens, central heating, roofs etc) being renewed in good time. If they are left beyond their useful life then the homes deteriorate.
Today, HRAs have insufficient funding to renew existing homes over the long term. My own council, Swindon, has a shortage of capital funding of £80 million over the next five years alone. This is unexceptional amongst councils. Whatever the differences between them all HRAs are short of sufficient resources.
Why are they short of funding? In 2012 a new council housing finance system was introduced – self-financing. It involved a ‘debt settlement’ in which what was deemed by government to be the national council housing debt was disaggregated and shared out amongst stock owning councils. £13 billion extra bogus debt was imposed on 136 councils.
In this fraudulent paper exercise the Public Works Loans Board (an agency of the Treasury) ‘loaned’ them £13 billion. Together with ‘historic debt’ councils owning housing are burdened with around £26 billion debt.
This isn’t in any real sense debt. It is the result of what you might call creative accounting by the Treasury. It’s a means of fleecing tenants whose rent pays off the loans and the interest charges. Currently, it costs councils £1.25 billion a year – 15% of the £8 billion total income of HRAs – to service this debt. Only 12%, £970 million, was budgeted for capital spending last year. That covers renewal of existing stock, cost of new build and purchases.
We can say this debt is bogus because we know that council tenants have paid more rent than the costs of borrowing for past building programmes. The House of Commons Council Housing Group discovered that in the 25 years to 2008, tenants paid £91 billion in rent but councils only received £60 billion ‘allowances’1. The £31 billion difference was more than outstanding debt for past building programmes. That’s why the demand to cancel this so-called debt was made by Defend Council Housing, the House of Commons group, even the LGA. Unfortunately John Healey refused to agree, as did the Tories when elected.
Grant Shapps, Housing Minister in 2012, said that it would provide sufficient funding for councils to be able to maintain their stock to the Decent Homes Standard, over the 30 years of their business plans. This wasn’t true. The previous government’s own research showed that if funding was based on actual need, it would require a 67% increase. Yet the increase was just 24%. So under-funding was built into the system from the very start. Then from 2012 the coalition and Tory governments introduced policies which resulted in the amount of income councils collected being much less than projected in the ‘debt settlement’.
The amount of so-called debt which each council was given was based on an estimate of their rental income over 30 years and the number of RTB sales (each home sold is rent income lost to HRAs). However, the government
increased discounts on RTB as a result of which there was a five-fold increase in sales. This meant that councils lost far more rent than estimated in 2012.
introduced a 4 year rent cut of 1% a year.
Since HRA business plans were based on projections which are now completely out of synch with actual income, councils are collecting hundreds of millions of pounds less rent than incorporated in their business plans. For example, Swindon is projected to collect approximately £360 million less rent over the course of the business plan than the 2012 estimate, Newcastle in the region of £500 million less. Overall, councils will take in many billions less rent income than estimated in 2012.
The result of this is that HRAs have insufficient funds to renew their existing stock in the long-run. Key components which are left in place beyond their useful life not only lead to worse living conditions for tenants and the irritation of repeated job requests as components fail regularly, but they also drive up responsive repair costs.
Labour’s 2019 general election Manifesto included a commitment to review council housing debt. Obviously it cannot do that directly without being in government. However, it is time for Labour to end its silence on this issue. It can challenge the Tories under-funding of HRAs. Under the 2011 Localities Act the government has the power to reopen the ‘debt settlement’ and readjust the debt if there are significant changes in income or costs. Labour should be demanding that the government do just that and write off debt at least in line with the projected losses that have resulted from their policies since 2012. Through its group in the LGA, Labour could collect statistics which highlight the scale of the shortfall faced by councils over the course of their business plans and organise a national campaign.
Labour should also make a commitment itself, to cancel the debt if elected. The Labour Campaign for Council Housing has just published a pamphlet, The case for cancelling council housing debt, which examines the historical reason for this financial crisis in more detail than I have space for here.
Debt cancellation would address the under-funding of HRAs in relation to the existing stock. The extra £1.25 billion would enable more than double the level of investment in renewal of key components to be spent. Labour should be demanding from the government funding sufficient to maintain and improve the standard of existing homes. Moreover, with a Decent Homes Standard review currently taking place Labour has a duty to highlight the consequences of this under-funding. Proposals to improve the standard of the DHS would be worthless without councils having the wherewith-all to carry out the necessary work.
