Category: Blog Post

We need Isambard and a tin hat

Post author By Steve Hilditch
Post date January 3, 2011

Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

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As Tony suggests in his post I agree with Grant, Grant Shapps deserves (begrudging) respect for raising the importance of achieving long term house price stability, but I hope he has his tin hat on in anticipation of the reaction in some parts of the media. The Mail has already highlighted Shapps’ own personal property dealings as they smell ‘hypocrisy’. Of course, never one to miss a political trick himself, Shapps also tries to pretend that house price hyper-inflation came in with the Labour government in 1997, whereas all the key trends and policies, long booms followed by a sharp and damaging busts, have been in place for a couple of generations now.

The real problem is that I can’t see anything in his or the government’s philosophy that might lead to the necessary actions being taken to bring house price stability about. The Mail quotes Shapps as saying that homeowners should no longer rely on their houses to fund their retirement and that ministers were hoping to engineer an era of ‘house price stability’ in which property values would gradually be eroded by rising earnings.

‘Engineering’ a market seems rather at odds with everything else they stand for.

Indeed rather a lot of extremely heavy engineering projects would be required to achieve long term price stability. We may need the housing equivalent ofIsambard Kingdom Brunel because all of them are hard to achieve.

The first is a better balance of supply and demand, which will need policies to massively increase the rate at which new homes are built over a sustained period of time, more than a decade. With the regional planning framework scrapped, and huge cuts in infrastructure investment, this seems a forlorn hope to me.

The second is the stable supply of mortgage funds on sensible terms, targeted towards the cheaper end of the new build market, to encourage developers to produce more affordable homes. This will require a stiffer attitude towards regulation than this government promises and lenders are used to.

The third is to tackle land prices and not just house prices – the problem in many places is not the cost of construction, but the price of the land – which can probably only be done through some kind of land value tax, not natural territory for any of the main political parties.

And fourth, we need a stronger safety net for home owners when interest rates spike or redundancy strikes – Labour’s policies during the credit crunch were a good start in this direction. Stable or falling prices need to be accompanied by reduced risk for individual households.

At the bottom of it the hardest change to make will be in attitudes. A good home ownership market is vitally important, but it will fail if it is regarded as the only tenure that brings status and respect, or as a get rich quick scheme or a proxy pensions market or even a place to bung the latest bankers bonus. The core business should be about delivering reasonably-priced homes to people on reasonable incomes, and shared ownership to people on ‘intermediate’ incomes who want it. But the market will still fail unless we have a better understanding of the relationship between tenures. A balanced housing market needs far more renting as well as more homes built for sale, so people at all income levels have real choice at different stages in their lives and are not forced into debt that they cannot sustain.

More care is needed with the language of ‘aspiration’, which has become synonymous with wanting home ownership. Of course many people would like to own their own home if they can afford it, but the aspirational classes may well give higher priority in future to getting their children through college and protecting their retirement.

These are real challenges not just for Grant Shapps but also for Labour’s housing policy review when it gets under way. It would be nice if a new consensus was emerging that enabled serious long term policy options to be discussed rationally, but I suspect the odds are against.

Tags Home ownership, Housing market

Blog Post

A Christmas Carol (in prose)

Post author By Steve Hilditch
Post date December 29, 2010

A guest post for Xmas from Bernard Crofton adding a seasonal spin on a topic previously reported on Red Brick here.

A Christmas Carol (in prose)…… being a …….. ghost story for Christmas.

In November of 2010, the two government departments facing amongst the biggest budget cuts, the Department for Communities and Local Government, and the Ministry of Justice, issued a new guidance leaflet : “Advice on dealing with squatters in your home” available as a pdf download from http://www.communities.gov.uk/publications/housing/advicesquatters, where there is a helpful summary as well :-

There are an estimated 20,000 squatters in the UK. This guidance is aimed at homeowners and to make them aware of their rights where their property has been unlawfully occupied. It has been jointly produced with the Ministry of Justice which makes clear that it is an offence for a squatter to fail to leave a residential property when required to do so by or on behalf of either a displaced residential occupier or certain other occupiers whose interest in the premises is protected under the legislation.

That stirred some queasy questions about the “new” advice; mainly “Why?” and “Why now? “ .

However, when I clicked and the pdf started its weary download, I heard the rattling of chains in the cellar. Surely Jacob Marley has been dead these seven years (or 17 since the Criminal Justice and Public Order Act 1994).

The Advice starts with these words:

“What can I do if my home has been taken over by squatters?

1 If you return from holiday or walking the dog to find squatters in your home and they refuse to leave, you can call the police and report a criminal offence. “

I was fascinated by the imagery. Mainly because part of it was mine, come back to haunt me. I was among the local government representatives consulted by the Home Office about the legislation. Actually the law, as laws of that era went, ended up quite fair. I never met any supporter of squatting who thought squatters should be able to move into an occupied dwelling and effectively evict the occupants. Nor did I ever find a case where this had happened. Canvassing round the councils in London (where statistically almost all the squatting in the UK was concentrated) we couldn’t find a single case where that was alleged to have happened.

We found a few cases where home-owners were trying to repair a newly acquired empty property before moving in, and it being squatted while undeniably unoccupied. We found very many parallel examples on council estates (and I managed a tenth of that national 20,000 squats figure) But the pubIic debate had far more of the tang of the illegal immigrants debate It was about scroungers and spongers but with a more direct threat: they wouldn’t just take your money indirectly through the tax system, they would take your home and all that was in it!

One newspaper (I think of it as being the Daily Mail but I may just be prejudiced) ran a tale of a family returning from holiday to find their home squatted. “Vox populi” in the neighbourhood were said to be frightened to leave their homes unattended in case squatters moved in. We tried to find this example. The local council, where it reportedly occurred, only came up with a couple who lived abroad and owned several rented properties in the UK, one of which they found squatted on a visit back to the UK. They were certainly neither “displaced residential occupiers” nor “protected intending occupiers” of the property.

So in discussions with the civil servants I pointed out that if I went out to walk the dog and found someone in my home when I returned, I would not find the Police reluctant to act on straightforward “breaking and entering” or even malicious damage grounds. My sarcasm was effective. That “walking the dog” phrase alongside the “returning from holiday” one became shorthand for the fact the legislation was an over-reaction or a pandering to right wing prejudices. I still do not believe any owner-occupier was ever “displaced” by squatters while the kettle was still warm, or as Confucius say “swinging chain, warm seat”.

The issue, as local government and voluntary sector consultees all argued, was the time it took to get to court to repossess a squatted property. Ironically,court waiting-times meant that if you bought an empty house that was immediately squatted, you were kept out of it for the full term of that other brilliant invention of the era: the shorthold tenancy. So the law was eventually drafted to include the situations of both “a displaced residential occupier” and a “protected intending occupier” of the property. And rather than put resources into reducing court waiting lists we got the “interim possession order”.

Now I never rule out the possibility there really was a case where people left their home to go on holiday and found it squatted on returning. I never completely rule out the possibility that somewhere there is a Big-issue seller who gets into his Rolls Royce at the end of the day. But I never met one remotely near that bracket, and so I remain sceptical. But as for home-owners being squatted while out for a walk with the dog, I never heard anyone ever suggest it has happened – except me as a sarcastic example of the hysteria over squatters.

Suddenly at the end of 2010, I find the example heading a new advice leaflet, not just from one but two government departments. So I wrote to them both under the Freedom of Information Act (we didn’t have that when the 1994 Act was proposed, it was up to us to produce our own statistics). I asked:“Please supply me with any statistical information held or viewed by the Department or its predecessors, as to the number of owner-occupiers who have found squatters in their homes: a) on returning from holiday; b) after walking their dog.”

DCLG were first to respond, with the classic line from Fawlty Towers “ I know nuzzing”. The Ministry of Justice were more helpful. The person with “responsibility for answering requests in the Ministry of Justice (MOJ) which relate to civil (non family) law and housing possession related statistics which are to be handled under the Freedom of Information Act 2000 (FOIA)” told me :

“I can confirm that the Department does not hold the information you have requested. MOJ does not record property owners or property occupiers who have found that whilst away from the property, for whatever reason, that it has been occupied by squatters.”

After advising me of the rights of the un-numbered disposed occupiers, he helpfully provided the following table which he was not obliged to do under FOI, as it did not directly answer my question. He hoped it would be of use to me, so I am using it below. He warned me :

Table 1 below shows the number of Interim Possession Orders and Possession Orders against trespassers made in the county courts of England and Wales for the past full five years. Please read the footnotes underneath the table which describe how the data were compiled. Please note in particular that the figures include cases where properties were occupied by types of trespassers other than squatters (figures for squatters alone could only be determined by inspecting individual case files at a disproportionate cost), involving non-residential properties; and also that not all such orders given result in actual repossession of a property from a trespasser.

Table 1 Number of possession orders and interim possession orders given for trespass in the county courts of England and Wales, 2005-2009

Possession orders Interim possession orders

2005 929 117

2006 1036 114

2007 752 154

2008 626 164

2009 653 136

Source HMCS manual returns

Notes:

1. Data from 2005 to March 2009 were gathered from the Dept’s Management Information System. Data from April 2009 were collected from the courts online data monitoring system One Performance Truth

2. Quality assurance checks have been carried out to remove outliers. However these decisions have not been verified by contact with the courts. These figures should therefore be treated with caution.

3. Orders against trespassers and IPOs can be given for the possession of both commercial and residential properties from trespassers.

4. Not all orders and interim orders given for possession against trespassers relate to properties that are occupied by squatters.

5. Not all possession and interim possession orders result in actual repossession of a property from a trespasser.

Now let’s ignore that the table includes squatted shop-units etc. and that not all trespassers are squatters. The table shows possession orders against trespassers (I recall the definition used to be “against persons who entered as trespassers” but that mayhave changed).

I conclude from this table the following.

The number of full orders has declined significantly in the last five years.

The number of interim orders has started to decline, after a rise.

That at the current rate of full orders it would take 30 years to remove the current number of squatters….if there were no new cases.

That at the current rate of interim (i.e. urgent?) orders it would take nearly 150 years.

No one seems in a hurry.

Is it me or is there something odd about the emergence of this new governmental advice from financially strapped departments just in time for the Xmas season? Conspiracy theories are accepted, but any genuine leaks as to why this ghost has been disturbed would be especially welcome.

Bernard Crofton

Tags Department for Communities and Local Government, Squatting

Blog Post

The ghost of Christmas yet to come

Post author By Steve Hilditch
Post date December 22, 2010

Steve Hilditch

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We don’t often link to the Telegraph on Red Brick. But the sting operation against leading Liberal Democrats has had a focus on one of our favourite topics – housing benefit.

So here is what Business Minister Ed Davey actually said to the undercover reporters on this topic. Hear the tape here.

“Well, their housing benefit cuts, for example, which are going to mean in my view if they go through that some people on the breadline will be put below the breadline. And that’s just deeply unacceptable. There is (sic) five changes to housing benefit, and there are two which I find are unsupportable. One which will come in in 2010-13 where if you were unemployed for 12 months and you still were passing the working test which is actively seeking work – to get jobseekers allowance, which is about £80 a week, something like that, so you can eat you will have to show that you are looking for work…… I don’t understand why you are on the breadline, you’ve been trying to look for work, you’ve been passing all the government tests, and you’re suddenly going to have your rent, which is your highest cost, your help with that, taken down by 10 per cent. No logic behind that whatsoever…. We spend too much on it. It’s pushed up rents and landlords, rich landlords, are getting their pockets filled. So the system doesn’t work, but I don’t think you kick people when they’re down.”

Contrast that with the pugnacious and ever so slightly pompous Mr Davey’s attack on Chris Bryant and Boris Johnson on BBC’s Question Time in October for using the word ‘cleansing’ to describe the housing benefit changes. He said:

“Chris and Boris Johnson should apologise. The language they are using is appalling and I think it is scaremongering and I think their analysis is completely wrong. And I’ll tell you why it’s appalling. I have Kosovan asylum seekers in my constituency who really were ethnically cleansed ….. what is being proposed is nothing of the sort, you should use temperate language and have a moderate and grown up and adult debate…. People will find that 790,000 social homes in London will be completely unaffected. They will find that the vast majority of housing benefit recipients across the country will be unaffected. And yes there will be some but we have increased massively the fund that will assist if there are problems to £140m. And even those people who will be affected, they will be able to find that up to a third of private rented sector homes in London still affordable under housing benefit. Now I’m afraid you are being factually wrong and pandering to people’s sentiment when we’re actually putting in a sensible policy….. The real issue here is that we are proposing after all these changes the state will still subsidise up to £20,000 a year rent in the private sector – £400 a week”.

A few facts

– Many social tenants will be affected by the 10% cut in jobseekers allowance, uprating benefits at less then RPI, and the increase in rents for some tenancies to 80% market rents

– The £21,000 a year cap is irrelevant to most private tenants. Many more will be affected by the 30^th percentile rule and the overall benefits cap of £26,000

– The ‘vast majority’ of private tenants will be affected, as the government’s own figures now show.

As an aside, Ed Davey’s rage about the use of hyperbole about cleansing looked synthetic at the time – after all, Lord Turnbull said Gordon Brown was Stalinist – but it looks even odder now that Vince Cable has called the government ‘Maoist’. It seems that comparisons to genocidal maniacs are more common that we think.

We’ve observed before that the more the government accuse the opposition of scaremongering, the more likely it is to be true. Below the breadline…… kicking people when they’re down. Mr Davey’s real views deserve to be heard, and should be acted upon.

Even Ebenezer Scrooge finally repents. If the LibDems stand up for their principles, they might just get to play the part of the ghost of Christmas yet to come.

Tags Housing Benefit, Liberal Democrat

Blog Post

What will housing look like at Christmas 2014?

Post author By Steve Hilditch
Post date December 21, 2010

Steve Hilditch

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Just published on the Labour Housing Group website is a fascinating article by LHG Executive member Graham Martin, who tries to predict what will happen to the 3 main tenures between now and Xmas four years hence, when we will be 5 months away from the most likely date of the next General Election. What will the Labour Party, when returned to government, be facing in housing? Here is a summary of Graham’s conclusions (figures are for England only).

Social Housing

Housing Associations currently own around 2.3m affordable homes. Given the size of the stock, the overall numbers will change slowly despite the planned changes.

The current (inherited and new) social rented programme will produce about 100,000-120,000 extra ‘target rented’ properties. But between 100,000-170,000 existing target rent homes will be relet at intermediate (upto 80% market) rents. In 2014 it is likely to be 50,000 fewer in total than now.
There will be around 285,000 more homes let at intermediate rents (say 135,000 relets and 150,000 new build).
The debt funded/rental cross-subsidised new Intermediate rented homes will be produced mainly in London and the South East (with some in the South West and Midlands) as it is here that the maths work best. In other parts of the country, intermediate rents will result in either a small increase or even a rent reduction, making development on the new model unviable.
The biggest impact is likely to be caused by the interaction of the various benefit changes, and in particular the overall benefit cap of £26,000, restricting tenants’ ability to pay.

Council house numbers will change slowly. There is little appetite and resources for significant stock transfers. Some other conclusions:

The reform of Housing Revenue Accounts is likely to improve councils’ financial strength and their ability to invest in their own stock. There is a risk that there will be a smash and grab raid on HRA money (rising rents, financially more secure) to cross subsidise the General Fund.
The provision by councils of Intermediate rented housing is likely to be slow.
Management issues around benefits are likely to be the same as with Housing Associations.
Changes to statutory homelessness rules, and changing letting priorities will have a significant impact.

Home Ownership

Graham projects that house prices might fall another 20%, maybe 25%-30%, as measured against inflation. This will be mainly due to the long term ‘deleveraging’ of the residential mortgage market – i.e. there will not be the money to lend to home owners to buy new homes (such money as there is will go mainly to those buying the nicest properties with the biggest deposits).

Home construction for home ownership will be remain low until 2014, after which is may start to increase again (from a very low base).

The lack of affordable homes for (all but the best off) first time buyers will result in increased pressure on the rental market, and more adult children living in the parental home.

Private Rented Sector

The hardest to predict. The only certainly is that there will be big change.

The changes to Housing Benefit (and total benefit) rules will profoundly impact on the sector. Landlords may split their properties into smaller flats to respond to the benefit caps and ceilings. Savills are projecting that the impact will be, first, large falls in demand for and rents of 1 bedroom flats (due to under 35’s now being subject to the ‘single room rate’ rule), and, secondly, increased demand for larger ‘shareable’ properties.

The new 30% centile cap on maximum HB and the plan to greatly widen the ‘Broad Market Rental Areas’ will have a big impact. There are areas where over 30% of private tenants are dependant on HB, but will be constrained to living in the 30% of cheapest properties. 40% into 30% just does not go….

It is likely that the gap in housing (especially ‘green’) quality between other tenures and the private rented sector will grow significantly upto 2015.

Regulation and quality control are likely to be drastically reduced due to spending cuts, and there is a danger that undesirable landlord practices will increase. This is unfair to tenants but also to responsible landlords and managing agents.

There is an opportunity to promote high quality institutional landlordism, with investment available if the regulatory structure is right. REITS – Real Estate Investment Trusts – could work well in residential letting, kick starting the UK residential construction industry, and providing high quality, long term rented property at market rents.

Tags Council housing, Home ownership, Housing association, Housing Benefit, Private rented sector

Blog Post

One cheer and one HuRrAh

Post author By Steve Hilditch
Post date December 19, 2010

Steve Hilditch

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In trying to look beyond this government’s irksome habit of claiming credit for things agreed before the Election, at least it can be said that the snail’s pace move towards the abolition of the housing revenue account national subsidy system continues in vaguely the right direction.

Having announced already that he planned to stick with most of John Healey’s proposals, announced it again as part of the November consultation on the reform of social housing, and announced it yet again as part of the Localism Bill package, Grant Shapps has now announced a ‘route map’ towards reform – in advance of a more detailed announcement next month! The route map makes it clear that more detail will emerge over the next year before implementation in 2012, no doubt offering Mr Shapps further opportunities to announce his great, but inherited, reform. Who said spin was dead?

Brought up on a council estate in Kenton, Newcastle, I have always had an emotional belief in council housing, and have often been outraged at the stigma attached to the tenure, the appalling media misrepresentations, and the snobbery. Although what Thatcher did to council housing was unforgiveable, I was hugely disappointed that it turned out to be not very New Labour either. But the rationale for council housing is not just emotive. Based on a system of rent pooling, so that surpluses from older homes cross-subsidise the cost of new ones, it was also a robust financial model. It could have provided hundreds of thousands if not millions of extra homes if it had been managed properly over the past 30 years.

The Tories’ failure to invest in managing and maintaining the council stock left Labour with a huge problem in 1997, including a backlog of disrepair estimated at around £19billion and an incoherent rent policy. Labour made some well meaning attempts at reform, such as the introduction of rent restructuring, the Major Repairs Allowance and the Decent Homes Programme, but funding for the latter carried the clear political price tag that direct management of the stock by councils was unacceptable to the government.

As some councils in the national HRA subsidy system had large historic debts and others had none, the system was unbalanced and rent pooling became unmanageable. It also became increasingly unpopular with tenants and councils in those areas where a third or even a half of local rents were taken for distribution elsewhere. Despite producing growing surpluses nationally, all of the participants were unhappy with the outcome, even those that gained from redistribution. As an annual system, there was no certainty about income and it was impossible for councils to plan long term and improve efficiency. Tenants simply could not engage with the key decisions that affected their homes and communities because they were only understood by a tiny number of civil servants and professionals. In its latter years, the Labour government became less hostile to the idea that council housing should have a long term future, and understood that a more local system suited the times. It embarked on the hugely complex exercise of unravelling the system.

The Localism Bill contains powers to implement the local system proposed by Labour. In future, councils will keep their rental income and use it locally to manage and maintain their own homes and service their debt. To get to the point where all councils have sufficient income to meet these costs, there will be a one-off payment between central government and each council, which will reallocate existing housing debt between councils in a final settlement based on 30 year business plans for each landlord. This is possible because the national system is in surplus – ie tenants are paying more in rent than council housing costs to run.

Communities and Local Government department’s task is complicated: they have to incorporate the implications of the new government’s shifting policies, for example on rents, as well as making important assumptions about inflation and the ‘discount rate’ (currently assumed to be 6.5%) used to determine the ‘net present value’ of each council’s housing business.

I have 2 main concerns. First, John Healey planned to allow councils to keep their right to buy capital receipts, whereas the Tories will retain the current system that returns 75% of net receipts to the Treasury. There will also be a cap on councils’ overall housing borrowing. Hope that HRA reform would trigger a resurgence in council housebuilding has been dashed. The overall receipt to the Treasury from all the various calculations is currently projected to be around £6.5b, but tenants may come to view this as being paid for out of a large rent increase next year of over 7%.

Secondly, Labour would have localised the HRA within the clear framework of the regulatory regime. There would have been an external check, through the Tenant Services Authority, and a place for tenants to go if, for example, their council set up backdoor arrangements that took funds out of the HRA to benefit the general fund. It is still not clear how regulation will operate without the TSA, and this will make tenants in some areas nervous about what their landlords will get up to.

At least we can look forward to further announcements.

Tags Council house, HRA

Blog Post

Localism Bill – the Pickle Family Circus

Post author By Steve Hilditch
Post date December 14, 2010

Steve Hilditch

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The famous American Pickle Family Circus was known for its ‘Big Juggle’ that ended every performance in an intricate club passing pattern. As the Localism Bill, published yesterdy, passes ‘powers’ (ie the blame for cuts) down to councils, ‘Pickles Big Juggle’ seems an appropriate metaphor.

For social housing and homelessness, the Bill had few real surprises as everything had been widely trailed or pre-announced. We’ll pick up on specifics in later posts but here’s an initial reaction to the Social Housing Reform chapter of the Bill.

On allocations, councils will be able to decide who goes on waiting lists, which will no doubt lead to great claims in the future about ‘cutting waiting lists’. We will be back to local manipulation of the list for political ends. Transferring tenants will be moved outside the waiting list, but there is no evidence to support the claim that this will make it ‘easier for them to move’.

On homelessness, its a nerve to call this reform rather than virtual repeal. Come on Shelter, time to wake up to what is actually happening here! And come on LibDems, the homelessness legislation was a Liberal private member’s Bill in the first place, something the Party has always been proud of – time for you to speak up. The government complains that 20% of social lettings go to homeless people ‘at the expense of other people in need on the housing waiting list’. A miserable and ‘divide and rule’ justification for an extraordinarily backward step.

The introduction of ‘flexible tenancies’ (insecure fixed term tenancies) which will gradually turn social housing into transit camp accommodation. Some housing association chief executives really like this, so I am even more concerned.

Reform of council housing finance is something I welcome but we still have to be careful about how much will be returned to the Treasury and how the detailed formulae will apply to different councils with stock. Called a ‘key plank of localism’ but a previous Labour measure.

The proposed Homeswap Scheme again is something to welcome as mobility arrangements need a boost. Landlords will be required to participate in home swap schemes.

‘Reform’ of the regulatory system and abolishing the Tenant Services Authority will, in some magical and as yet unexplained way, “put local people in control of driving up standards of social housing management and resolving most failings.” Social tenants will receive ‘stronger tools to hold landlords to account’ but I’ll believe it when I see it. The more likely explanation lies in the statement that ‘State intervention will be reduced’. A positive change will be to end the system of two separate ombudsmen handling complaints, providing a common route for all social housing tenants.

In London, new powers for the Mayor will include full control over housing investment, a good step, and the devolution of more planning decisions to the boroughs.

Watch this space for more discussion of these issues over the coming few weeks.

Tags Homelessness, Localism, Security of tenure

Blog Post

Council cuts hit most deprived hardest

Post author By Steve Hilditch
Post date December 14, 2010

Steve Hilditch

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Did anyone really believe it when the coalition claimed to be ‘progressive’ and that it would stand up for the worst off in society? The local government cuts are an extraordinarily clear example of the vindictiveness of the government and its wholly political approach to funding. Their motto should be ‘we look after our own’.

Where do the biggest cuts fall? From South Tyneside, Sunderland and Hartlepool in the north east to Southwark, Hackney and Tower Hamlets in London, those getting the biggest cuts of over 8% read like a list of the most deprived communities in the country. And who does well? Little surprise here as well. It’s Dorset, Kent, Bucks and the Tory shires. You can get figures for all councils here.

If the division isn’t strictly political, there is a clear inverse correlation between the size of the cuts and the level of deprivation.

Nationally, the LibDems seem to be getting all the flak while hard core Tory policies just steamroller through. Even if they support cuts of this scale, surely they don’t support this distribution between councils?

Blog Post

In praise of Ken (and maybe Boris)

Post author By Steve Hilditch
Post date December 9, 2010

Steve Hilditch

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Feeling (uncharacteristically since May) in a positive frame of mind, I had planned three posts this week all of which intended to say something good about government policy. It was only after some cogitation that I realised all three of the ideas I liked were leftovers from Labour administrations but I am willing to give credit where it is due if the coalition picks up and implements sensible reforms. Unfortunately, of the three – Boris Johnson’s plans for social housing mobility in London, the council housing finance proposals, and strong steps towards encouraging mutualisation in housing – the latter two announcements have been deferred with the Localism Bill from this week until a point in the future. I certainly don’t feel able to commend the coalition until I’ve seen confirmation of the plans in writing.

So, for the moment, that leaves Mayor Johnson and mobility for social tenants, which will hopefully be a precursor to improvements in mobility for tenants nationally as well. His consultation paper, introduced in the Mayor’s usual combative style, can in fact be sourced back to Mayor Livingstone’s housing strategy. Of course, Johnson eschews the opportunity to highlight a bipartisan measure in favour of trying to take all the credit for himself.

Livingstone’s approach to mobility had two drivers in addition to the principle that more mobility for social tenants was a good thing in itself. First, The London Plan had a major focus on redeveloping swathes of east London where very large housing sites were available and there were huge opportunities to create sustainable new communities (including the Olympic sites). But if a large and increasing share of London’s available capital resources went to support new affordable homes in only a few boroughs, a mechanism had to found to ensure that the benefits of new development were more widely shared amongst Londoners as a whole.

Existing sub-regional arrangements, good in themselves, were not enough and a pan-London mobility scheme, starting with a share of new development and growing gradually to take in a share of re-lets across the capital, became an essential element of the Plan. Secondly, Livingstone identified a particular problem with wheelchair standard and other homes adapted for disabled people. Frequently such homes were being let to people not in need of them whilst others in dire need were not eligible because they did not live in the same borough. A wider geographic system and pan-London register of dwellings and households was needed to make best use of these scarce resources.

These are good examples of circumstances where localism is not enough and a wider area or regional approach is essential for good policy. Anyone reading the consultation paper will be struck by how complex it can be to achieve a balance between local, sub-regional, regional and cross-regional needs.

The consultation paper shows some concern that the government’s proposals on tenure (with much more flexibility given to landlords to vary the length and terms of some tenancies) will make mobility schemes harder to operate: users are already often bewildered by the complexity of existing schemes. And it is also sensible in arguing that the scheme should not incorporate much by way of ‘conditionality’ – such as a requirement that tenants moving must be in or accessing work or training.

Overall, it must be said, the consultation paper shows little actual progress since Johnson took over, now 2 ½ years ago. Livingstone had put in place the necessary requirements on landlords as part of the 2008-11 London affordable housing programme. We should be well beyond the stage of a consultation paper. The paper itself is still aspirational in tone and a long way from real fruition. It may be that it will not be implemented until Mayor Livingstone is back on the throne in 2012.

Mobility for London’s social tenants: An HCA London Board Consultation, December 2010.

http://www.london.gov.uk/sites/default/files/Mobility%20for%20London%27s%20social%20tenants%20-%20consultation%20December%202010.pdf

Tags London, Mayor, Mobility

Blog Post

Housing benefit: the truth will out

Post author By Steve Hilditch
Post date December 6, 2010

Steve Hilditch

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In a recent post I made the observation that government impact assessments, and especially equality impact assessments, tended to reveal more about a policy than all the other official documents put together, and that looking at any policy from the point of view of those most likely to be worst affected tends to expose the downside or weak links in the argument.

The point is well supported by the DWP impact assessments on the housing benefit changes, or more correctly the Local Housing Allowance changes, published last week.

At constant prices, and taking account of the recent minor concessions in the proposals, the LHA savings will start in 2012/13 and build up to £1040m in 2014/15, slightly offset by piddling amounts for increased discretionary payments and an (extremely welcome) allowance for an extra room for a carer. In 2014/15:

– removing the £15 bonus for people achieving a rent below the LHA rate (the shopping around incentive) will save £550m

– setting Local Housing Allowance at the 30^th percentile of local rents will save £425m, and

– capping LHA rates will save £65m.

The first point to note is the relatively small saving from the ‘cap’, given that virtually all government comment on the LHA issue has focused on excessive benefit payments to people in high rent areas, especially in central London. 17,400 households are affected – often very severely – by the caps. The much higher saving from the ‘30^th percentile’ change will have far more impact. It will affect more than three-quarters of a million households in all parts of the country.

Nearly everyone will lose: over 900,000 households, a stunning figure. The national average loss is £12 per week, from an average benefit of £126, but the hardest-hit group, households needing a 5 bedroom property, will lose an average of £57 per week as the 5 bed rate is withdrawn entirely. All the regions/nations are hit, with London top with an average loss of £22 per week. The biggest groups numerically are those in the 1 and 2 bedroom categories, who will face average losses of £11 and £15 respectively. The lack of grip on the reality of what it is like to live on a very low income is illustrated by the argument that “only four per cent of cases will have a shortfall of over £20 a week” – well, that’s all right then.

DWP refuse to make an assessment of the number of households that will have to move. They say they can’t predict behaviour, and customers have options – for example, “some may start work or increase working hours”, others “may be able to renegotiate their rent with their landlord and others may have resources such as savings they can fall back on”. To be fair, they do note that the Greater London Authority’s estimate that over 9,000 households may need to move in London as a consequence of the caps, and that 6,800 of those will be families; and Shelter’s estimate that between 68,000 and 134,000 households may have to move nationally.

“David Cameron insisted today

no one will be made homeless

by limiting ‘extravagant’ housing benefits”

Daily Mail

Contrary to the assertions of leading members of the coalition, including David Cameron, the impact assessment notes “a risk of households falling into rent arrears leading to eviction and an increase in the numbers of households that present themselves as homeless”…. and that “any resulting population movement could have wider impacts. People who move may need to rearrange their children’s schooling, healthcare arrangements or, where relevant, social services support; they may also need assistance with finding accommodation.”

Other specific groups affected by the changes include:

Disabled people, especially those who may have to move across a council boundary, because care and support packages do not move with the person and settled arrangements will be disrupted as the new authority carries out a new assessment. This “could lead to gaps and delays in new arrangements being put in place and consequential distress for the individual.”

Large families, who often have poor employment prospects and a much increased risk of poverty: for them, the “cap could affect their risk of overcrowding and the associated health and educational effects.”

Ethnic minority groups, who tend to have a higher proportion of large families, will be likely to be affected disproportionately. Further research may be commissioned in this field as there are “limitations in current data.”

Quotable quote from the impact assessment

“the impact assessment recognises that there are a number or risks as follows:

– increases in the number of households with rent arrears, eviction and households presenting themselves as homeless;

– disruption to children’s education and reduced attainment;

– disruption to support services for people with disabilities and other households with care and support needs;

– increase in the number of households living in overcrowded conditions; and

– a decrease in the number of and quality of private rented sector properties available to Housing Benefit tenants.”

The truth will out.

Quotations from DWP impact assessment: http://www.dwp.gov.uk/docs/lha-impact-nov10.pdf

apart from *David Cameron http://www.dailymail.co.uk/news/article-1324941/David-Cameron-claims-homeless-cuts-social-housing-budget.html#ixzz17LsNDNnz

Tags Department for Work and Pensions, Impact assessment, Local Housing Allowance, Private rented sector

Blog Post

The new serfs

Post author By Steve Hilditch
Post date December 3, 2010

Steve Hilditch

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In my first ever post on Red Brick I traced the development of security of tenure in social housing and the reasons for the introduction of secure tenancies to council housing in 1980. To put it mildly, landlords did not always behave well and tenants needed basic consumer protection against arbitrary or unfair actions. As I said there, without security tenants have fewer rights in relation to losing their homes than drivers have in relation to parking tickets.

Are social landlords better now? Yes they are, indeed much much better, but they are still highly variable and some, frankly, just can’t be trusted. It has taken years of regulation and inspection to change the attitude and practice of some of them, and that pressure is about to be stripped away. At the bottom of it is respect for tenants, who are now informed customers rather than grateful serfs*, tugging the forelock to the landlord.

I am hugely impressed by the humanity and commitment of most people who work in social housing. It can be a hard and challenging sector to work in. But I also have little doubt that some will slip back into old ways given half a chance. I have sat in many a room with senior managers moaning that their basic problem is the tenants. Nothing wrong with the properties, one housing director said, it’s the people that need fixing. Or the housing association chief who said that the problem nowadays was that tenants no longer feared their landlord.

Security of tenure regulates the relationship. Bad tenants can be removed, so it is not a tenancy for life as then propagandists say. The landlord has to go to Court and provide evidence against a set of rules fixed by Parliament. A serious decision – to remove somebody from their home – is taken seriously and with proper process; people have clear rights to object and put their case.

Landlords hate the Courts, partly because the wheels of justice are slow, cumbersome, bureaucratic and not always rational in outcome (here they have a fair point), and partly because the Courts are a check and balance on their administrative power. The Courts don’t always throw tenants out just because the landlord says so.

With temporary tenancies the decision to remove the tenant from their home will be taken administratively by the landlord. No doubt there will be rules, but these will be locally determined and I doubt if there will be much transparency and there will be no effective external regulation. Internally, the power to make decisions will be delegated. Housing officers will be required to make decisions I do not believe they are equipped to take or ever will be: whether a tenant stays or goes, whether they pass or fail a means test, whether a tenant still needs or, worst of all, deserves the tenancy. It will change the whole basis of the relationship between tenants and front-line housing staff. Tenants will feel more fearful, deferential, and uncertain. The scope for bad practice and error, discrimination and bad behaviour by landlords will increase. By mirroring the arrangements in the private rented sector, the social sector will import more of the failings of that sector as well.

This is why I think the housing lobby will make a serious mistake if it gets into an argument with the government about the minimum length of the new tenancies – 3 years is better than 2 – rather than articulate and defend the core principle of security of tenure itself.

*Even under feudalism landlords could not dispossess serfs without cause.

Tags Security of tenure