Tag: Private rented sector

Categories
Blog Post

More Snakes than Ladders

Occasionally an article comes along that encapsulates what you’re thinking. In the January 11 Economist there was an article entitled ‘The Housing Ladder, 1950-2005’ (https://econ.st/48Svcls note paywall) which came close to summing up my gloom about housing policy over recent decades. Its key theme is that ‘a redundant metaphor (the housing ladder) is blinding policymakers’.

The ‘housing ladder’ has been with us as an idea for a long time, and I remember being subject to endless images of ladders when I was on the board of a major housing association, being used to justify turning away from the production of social rent homes. It was linked closely to the other deadly notion of aspiration, which was of course defined in a way that suited the new policy. 

I used to argue a) that the first step on the real housing ladder is a decent affordable home in any tenure, noting that the ladder might only have one rung, and that b) being brought up in an aspirational working-class family meant that my parents wanted their children to stay at school and have better chances in life, their own wishes to own a home were real but secondary. I always hoped that the housing ladder as a concept would wither away and stop being so damaging to the emergence of a comprehensive cross-tenure housing policy, but it looks once again that it will be the main housing topic when the general election comes.

Of course, calling out the housing ladder as a myth is likely to get you classified as a wild-eyed loon – it is so firmly in the centre of housing’s Overton window (ie the range of acceptable opinion) and is used by media and politicians of all shades all the time – so it’s great to see a serious mag taking the idea to task.  

‘The housing ladder’ is the notion that aspiring people will naturally progress (through thrift and hard work – and by avoiding smashed avocado on toast) from buying a modest flat (or even a share of one) at a young-ish age then trading up over the years as incomes grow and housing equity increases. 

Graphic: The Economist, based on ONS data.

The problem is the facts no longer fit the fable, as the article shows. Home ownership peaked 20 years ago at 70% and has since fallen despite vast policy interventions. The ratio of house prices to earnings was around four from 1950s-1990s and is now eight. Home ownership before 30 is now around a third when it used to be more than a half and is increasingly dependent on inherited wealth or family support. Those who make it onto the ladder are much less likely to trade up. The flood of easy mortgage finance across the world following financial deregulation is now a thing of the past, after the USA mortgage market triggered the global financial collapse, and homeowners’ vulnerability to higher interest rates is now plain to see. The Tories, at huge cost, have tried to reinvigorate home ownership through demand subsidies, but the 1990s paradigm isn’t returning any time soon.

The Economist, data from the Resolution Foundation.

The article places the right to buy of council homes in this context, noting that this ‘one time trick’ transferred a tenth of the housing stock from the state to private ownership in a little over a decade, costing billions but giving a major boost to the appearance of success of home ownership. It also comments that even the successful implementation of the target to build 300,000 homes a year for a decade would only reduce the house-price to earnings ratio to 7. It argues that the ageing population means that homes recycle back onto the market much more slowly than they did.

Normally if I make this kind of argument I get challenged with the sneer: ‘I bet you are a homeowner’. Indeed, I am, and I’m a classic housing ladder person although without much trading up – starting in a council house, fortunate to buy a share of a £15,000 London house in a poor area in the 1970s because it was cheaper than private renting, just when Westminster Council allowed joint mortgages between unrelated people for the first time. All I had to do was sit and watch the value rise. But the responsibility of the lucky generation – mine – is to think about what policies are suitable for the less lucky generations that have followed.

So, as the article states, the private rented sector is no longer ‘a waiting room’ prior to home ownership. It is a destination. Social housing has been shrunk massively and deliberately and can no longer meet more than a small share of need. Those who get into home ownership are taking on mortgages well into normal retirement age. The housing costs of older people – home owners and private renters alike – are escalating rapidly, pensioner poverty will rise, and the state will catch much of the burden.

“The housing ladder may have died two decades ago but its allure as a metaphor remains. That continues to blind Britain’s politicians and voters to the reality of the property market. Rather than harking back to a bygone age, Britain’s politicians need to accept that there is more to housing than home ownership.”

The Economist.

The case I’ve always made is for a comprehensive national housing strategy that covers all tenures, building on their strengths and tackling their weaknesses. It will take a generation to turn things around and to stop housing costs crippling most of our households. In case you doubt it, I support home ownership as the preference and the best solution for many households. It will rise again in a sustainable way when peoples’ incomes rise in relation to property prices, so we should build more, subsidising supply where it is sensible but not wasting cash on demand subsidies that push prices up. We must tackle land costs and developers’ profit-first models. We must build much more social housing for those that need decent homes at lower rents, a hugely successful model that requires investment but not ongoing subsidy. And we must professionalise the private rented sector, the last great unmodernised industry, defining its role more clearly as home ownership and social rented gradually climb back, as surely they will.

See ‘The Housing Ladder, 1950-2005’, The Economist Jan 11 2024. Online https://www.economist.com/britain/2024/01/11/the-housing-ladder-1950-2005 (note paywall). No byline.

Steve Hilditch was a founder member of LHG when it formed 42 years ago, and edited Red Brick blog for 10 years, publishing a compendium book of 100 posts in 2020. He has worked as a housing professional and consultant, advising the last Labour Government, various Select Committees and many Labour Councils on housing matters. He recently carried out a detailed housing review for the new Labour Westminster Council.

Categories
Blog Post

Empowering Tenants to Drive Real Change in the Private Rental Sector

The State Of It

The number of households renting from private landlords has doubled since the year 2000 to 4.6m but quality of housing and protection for private tenants has not kept pace.

According to Environmental Consultant Dr Stephen Battersby, there are 4 times more damp homes in the private rented sector (PRS) than in the social rented sector.

Four years after the Tories promised to reform the private rented sector tenants are as vulnerable as ever to bad landlords. ‘No fault’ evictions, known as Section 21 evictions, are in fact soaring – up 76% on last year according to the BBC. While figures are skewed by the ban on evictions during the pandemic, in the first quarter of 2022, claims and orders in private landlords’ possession cases had returned to a similar level to 2019.

This is a miserable situation for private renters in this country – paying steep sums for terrible conditions and insecurity, while the government drags its feet over promised reforms.

When the Renters Reform Bill was finally announced last year in the Queen’s Speech, long-awaited by organisations like Marks Out Of Tenancy and our colleagues at the Renters Reform Coalition, one thing that was notably lacking was details of any extra money or enforcement powers or bodies which will be put in place to back up the new rules.

Herald A Substantial Shift

In the absence of any new enforcement from government, Marks Out Of Tenancy allows renters to take matters into their own hands by providing written feedback and a score for the landlord, property and area. This gives tenants a much needed mechanism to call out sub-standard properties and problem landlords, providing desperately needed transparency and accountability in the PRS. 

“A longstanding characteristic of the sector is poor information and communication,” writes Professor Alex Marsh of the UK Collaborative Centre for Housing Evidence.  

He continues: “Small-scale landlordism coupled with transient tenants compounded, in many areas, by high demand means that there is a market for poor quality and the market does not discipline poor quality providers. The arrival of websites like Marks Out Of Tenancy may eventually herald a substantial shift in this dynamic: they allow the market to develop a form of memory.”

Meanwhile current enforcement falls short. Convictions of rogue landlords under the Prevention of Eviction Act 1977 remain startlingly low; a May 2022 report by Safer Housing shows that of a total of 6,930 reported offences under the act in 2020 only 23 had proceedings brought against them and only 12 resulted in a conviction. 

The PRS has been left to self-regulate for too long and it simply has not worked. Landlord associations and voluntary landlord registration schemes on their own can’t regulate landlords, and overstretched local authorities can’t do any more to challenge bad landlords than they already are doing – but there is space for a regulatory force outside the market and the state.

Introducing ‘Decentred Regulation’

The UK Collaborative Centre for Housing Evidence makes the case for ‘decentred’ regulation in response to the current crisis in the PRS in a 2020 report entitled Improving Compliance with Private Rented Sector Legislation (page 34). 

The report explains: “Much regulatory thinking starts from the state – in the case of the PRS: local authorities, licensing agencies, trading standards and the police – as the core of the regulatory regime. Decentring regulation is an invitation to look more widely at the organisational landscape of a policy sector to understand what else is going on and which other organisations and social actors are acting in a regulatory capacity. Approaching regulation as “decentred” frequently signals a concern with processes of self-regulation.”

This is precisely what Marks Out Of Tenancy exists to do. As the report states, Marks Out Of Tenancy is a platform that seeks to regulate quality in the PRS via tenant feedback and rating completely independently of the state.

In the context of decentred regulation, Ben Yarrow, CEO of Marks Out Of Tenancy says:

“Imagine a scenario where a local authority had imposed restrictions on properties that can be used as Airbnb rentals – and the Airbnb platform reported back to a local authority when a property was being let without a licence. Or imagine a scenario where Checkatrade or Trustatrader reported non-compliant plumbers who were operating without Gas Safe certification. These scenarios are unlikely to occur – these companies would be hurting their own business by reporting their own customers, however Marks Out Of Tenancy differs significantly in that we have no vested financial interest in the rental transaction.”

Marks Out Of Tenancy needs help threading review data with enforcement; while a well-publicised bad landlord may struggle to find a new tenant, all the bad reviews in the world will not force them to make the necessary repairs if they are not minded to. This is where it becomes essential to work closely with existing regulatory and enforcement bodies at the Local Authority level. 

For our local authority partners, we provide legally compliant, timely and accurate data from tenant reviews.

On a basic level it enables licensing and enforcement teams to find out:

  • Which properties are being rented
  • Who was acting as the landlord
  • How many people were living in the property
  • If the property needed a licence
  • If it was licensed at the time it was being rented
  • If the property complied with Minimum Level of Energy Efficiency (MEES) standards

Through the Marks Out Of Tenancy portal, housing officers are also able to open communications with the tenant who left the review.

Using pre-written templates, officers are also able to send letters through the Marks Out Of Tenancy portal, addressed to landlords of flagged properties inviting them to comply with licensing requirements, MEES legislation or even a friendly chat.

The platform continues to grow in scope and ambition, having recently secured a significant grant to fund our work for the next three years. This funding will enable tenants in the London boroughs of Southwark and Lambeth to make better-informed decisions about where they choose to rent. The platform reach will also be expanding nationally at the same time.

The Ask

A single review of a landlord and rental property can make a huge difference to the decision making process of an individual renter – but we’ve built the technology and infrastructure to impact and drive change across the whole industry. If every tenant used the platform they could force a substantial shift in the way landlords treated them.

We want Marks Out Of Tenancy to help bring about a shift in the fundamental relationship between tenants and landlords. But it requires stakeholders like Local Authorities and existing regulatory bodies to allow us in – this platform can be a valuable resource when combined with agencies with enforcement powers against bad landlords.

Marks Out Of Tenancy invites housing professionals at Local Authority level to begin looking outside of the purely enforcement and regulatory systems currently at play, recognise that trade associations or professional landlord bodies do not aid with actively rooting out the poorest quality providers, but rather, that tenants on the frontline can provide an invaluable insight into the service provided by landlords and the products they’re obligated to maintain.

Ben Yarrow is CEO of Marks Out Of Tenancy, a PropTech firm focused on improving housing conditions.

 

Categories
Blog Post

What does the Queen’s Speech mean for housing?

Despite presenting a large volume of legislation, overall the policy proposals in the Queen’s Speech will do very little to address the underlying causes of our country’s housing crisis.  Labour Housing Group has long argued for systemic change in the supply of genuinely affordable housing (the planning system and housing finance), reform of the benefits system, and regulation of the private rented sector and is campaigning for housing to be set in legislation as a human right. 

The legislation proposed in the Queen’s Speech will not address the challenge of a desperate shortage of genuinely affordable homes, the poor quality and energy inefficiency of all housing stock or the growing problems of homelessness and temporary accommodation.  The legislative programme does not bring forward ideas for the failing social security system which is leaving families having to choose between heating and eating.  I have set out the outline of what is expected in each of the Bills and then highlighted what’s missing.

The Renters Reform Bill is expected to abolish ‘no-fault’ evictions by removing Section 21 of the Housing Act 1988.  We have heard this before and we must hold this Government to their promise to now deliver this.  The Bill also proposes to reform possession grounds for landlords – it is not clear what these will be or how the Bill will tackle the issues with administration of evictions.

The proposal for a legally binding Decent Homes Standard in the Private Rented Sector is certainly welcome but currently lacks detail for how this will be enforced, how the enforcement will be funded and how the works to ensure the Decent Homes Standard will be administered or paid for. Similarly, the introduction of a new Ombudsman for private landlords to resolve disputes could be a positive step forward but experience from the Housing Ombudsman, under-resourced and under-powered and struggling to keep up with the flow of escalated complaints from social landlords, suggests that unless this is properly funded this will create more uncertainty for renters.

The Social Housing Regulation Bill attempts to give more focus on consumer standards. With plans to enable the Regulator to intervene with landlords who are performing poorly on consumer issues there is hope for the many residents who struggle to secure a decent level of repair service from their landlord.  This is a u-turn from the Coalition Government’s abolition  of the Tenants Services Authority in 2010.  The impact of this Bill will only really be felt by tenants once the new powers and functions come through the Social Housing Regulator. Labour Housing Group will work with Labour MPs to make the case that the Social Housing Regulator is properly funded to deliver this expanded role. 

Enabling the Regulator to inspect landlords is encouraging – the tenants that I represent who receive a poor repairs service would welcome the chance to call for an inspection and to see the outcome of that inspection. This Bill still has gaps.  There is no stated role for Local Authorities or Local Councillors who are often the first to hear about the impact of poor consumer standards.

It is also silent on the role of local authorities with housing association disposals – local authorities have a responsibility to assess housing needs for their local areas and planning powers to secure affordable homes but there is no requirement for housing associations or the Social Housing Regulator to consult local authorities on the impact of disposals. Finally, this Bill is a missed opportunity to invest in tenant engagement including a requirement for tenants to be on Housing Association Boards or to have a say on local management decisions.

The Levelling Up and Regeneration Bill promises mostly administrative changes to monitoring levelling up, alongside tinkering at the edges of the planning system. Anyone committed to seeing more affordable homes built will despair at the lack of ambition from this Bill. The idea of organising votes on a street by street basis to determine planning applications will just bring in unnecessary bureaucracy to an under-resourced planning system.

The focus should have been on supporting clear policies which prioritise affordable homes and high-quality design standards.  We await the detail on how the Bill will support local authorities to bring empty premises back into use and support the high street – currently local authorities have broad powers to support regeneration and so it’s difficult to see what more will be added which would have a meaningful impact.

It is positive that the Energy Security Bill proposes to appoint Ofgem as the new regulator for heat networks. I represent residents in new build homes who have no control over their energy prices and no powers to demand transparency over costs or choice of provider.  The appointment should go further and provide clear local involvement for consumers so that they have a say in their energy provider. There is a huge gap in making plans to insulate and retrofit existing homes so that they are more energy efficient.  Only a street by street, block by block programme, with sustained investment from national Government will secure the reduction in energy use that is needed to get to Net Zero.

It’s clear what’s missing from this legislative programme.  The Government has failed to address the issue of short term lets, which is eroding the availability of affordable homes across the country, particularly in London and areas with a growing tourist economy.  The Government’s failure to really grasp this issue and tackle the impact on housing supply and on communities lets down both homeless families and those hoping to join the housing ladder. 

It is unsustainable for short term lets platforms to continue operating in central London without further regulation.  There is a gap where there should be a long term commitment to investment in genuinely affordable council and social housing.  This should be delivered through Government co-ordination of major new housing schemes alongside a sustained funding stream.

Going forward, Labour Housing Group will work with the Labour front bench and Labour MPs to make the case for the strongest possible action within these Bills to address the housing crisis.

<strong>Rachel Blake</strong>
Rachel Blake

Rachel is a Labour and Co-operative Party Councillor in Bow East and is Vice-Chair of the Labour Housing Group.

TWITTER
Categories
Blog Post

Rent controls: a retrospective

For more than 70 years, between the First World War and the late 1980s, the United Kingdom had a system of rent controls for private sector tenants.  The policy was, on almost every metric, a success – argues Nick Bano.

This middle portion of the 20th century stands in stark contrast to the housing conditions of the 21st: unlike today, there was no great housing or homelessness crisis; and the ‘homes fit for heroes’ and mass squatting campaigns of the 1940s and 1950s alleviated the worst of the of the scarcity caused by bomb damage.

In fact, as the brilliant 1939 film Tenants In Revolt shows us, mid-century working class housing campaigners were actively calling for “luxury flats” – a demand that has now become anti-gentrification groups’ ultimate bogeyman.  While today’s campaigners are forced to make insipid calls for the barest essentials of homelessness reduction, tenants under a rent control regime had moved on to demanding luxury.

Potted history: a consensus for rent controls

In 1915, reeling from a powerful rent strike movement in Glasgow that held the wartime government in check, Asquith’s administration passed the Rents and Mortgage Interest Restriction Act.  While it was designed a measure against wartime profiteering, the spirit of the 1915 Act remained in force almost uninterrupted until rent controls were finally dismantled in 1988.  Importantly, the government realised that rent controls have to go hand-in-hand with relatively secure tenancies, to stop landlords from escaping the law by evicting tenants and re-letting at a higher rent.  The 1915 Act therefore introduced security of tenure, too.

The rent control mechanism was immediately recognised as being important, popular and successful.  Just three years later the 1918 Hunter Committee found majority support for rent control among tenants and – strikingly – among landlords, too.  As a consequence, Parliament amended the 1915 Act slightly in 1919, before proper new legislation re-establishing rent controls (the Increase of Rent and Mortgages (Restriction) Act) was passed under Lloyd George’s Liberal-Conservative coalition government in 1920.

Again, Parliamentary inquiries (the Onslow Committee of 1923, the Marley Committee of 1931 and the Ridley Committee of 1937) acknowledged on the broad success of the measures, and recommended the continuation of the rent control scheme (with some adjustments to the mechanics, and an increase in the number and type of de-controlled tenancies).  This slight watering-down was then reversed in 1939, as war loomed again.

After the Second World War rent controls remained in place. They continued to function reasonably well for more than 10 years, even after the Blitz had caused a genuine and serious scarcity of homes.  Neither the 1945 Labour government, nor the Conservative government that followed, abolished them.

The following Tory government, however, seriously weakened the system under the Rent Act 1957: rent controls were abolished for all new tenancies, and some more expensive existing tenancies.  This led to the system of ‘Rachmanism’ – where tenants were bullied out of their homes (or bullied into accepting new rents) – which effectively forms the model of the current oppressive system of ‘shorthold’ tenancies.  A new Labour government in 1964, however, re-introduced rent controls in short order.

The high point came in 1974.  Following yet another glowing report on the functioning of rent controls (by Hugh Francis QC in 1971), a Tory government extended rent controls to furnished as well as non-furnished accommodation.

The destruction of rent controls in 1988

By the mid-1980s the Thatcher government had decided that it wanted to create a housing market that wasn’t restrained by rent stabilisation measures, the disastrous effects of which we are experiencing today.

The genius of the Thatcher regime was that it never actually destroyed rent controls.  They still exist, although the controls are (unsatisfactorily) tied to the market rate: a tenant who disagrees with a proposed new rent is still entitled to complain to a tribunal, and the tribunal will not let the new rent exceed the market value.  But the 1988 Housing Act destroyed security of tenure, which is crucial to the functioning of a rent control system.  Landlords know that they can avoid the rent control measures by simply demand a new rent – any rent they like – and that they can evict the tenant quickly on a ‘no fault’ basis if they can’t or won’t pay the higher rate.  As a result, the formal system of controlled rent increases is almost never used.  Rent control was abolished by the back door.

For the last 30 years we have not just had a lack of effective rent controls.  Instead, because Thatcher’s aim was to generate a profitable housing market, the current system has rising rents by design.

A second, odd effect of the 1988 Act settlement is that rent controls became controversial.  That never used to be the case.  For most of the 20th century, opposition to rent controls was the exclusive domain of landlords, war profiteers and hard-line Tories. But since the 1990s there has been a looming sense that we are all Thatcherites now: that anyone who advocates a return to a long-standing legislative programme (propped up by decades’ worth of inquiries and reports) was somehow radical.

A shrinking private rented sector is a victory

The major effect of the rent control regime was the decimation of the private rented sector.  By the 1980s it had fallen to just 8% of homes in the UK.  This is, for anyone who is not a landlord, a triumph.  Privately rented housing is the least secure and most expensive form of tenure, and anyone who is housed elsewhere is almost certainly better off for it. 

How does this reduction happen?  Rent controls restrain the profitability of landlordism, and some landlords flee the market.  But a reduction in the number of rented homes does not, of course, reduce housing supply: ‘disappearing landlords’ do not cause homes to be knocked down or to be left unoccupied.  As the Bank of England’s John Lewis and Fergus Cumming explain here:

“Some landlords will sell up as letting becomes less lucrative. But at the end of each sales chain is either another landlord or someone who was previously renting. If it’s another landlord, aggregate rental supply and demand are both unchanged, and so are rents. If it’s a new owner occupier, the supply of rented property has shrunk by one, but so has the number of renters. The tightness of the rental market and thus rents are unchanged”.

Even if this happens on a large scale, the glut of supply caused by retreating landlords will necessarily reduce house prices.  It is this policy, rather than the proven failures of help-to-buy, shared ownership and high-end speculative development, that will achieve various governments’ stated aim of increasing home ownership.  The contemporary history of the UK shows this to be correct, and no amount of abstract economic modelling can erase that.

There will always be people who prefer to rent privately, of course, and the market has always catered for them.  But those generous souls who would prefer to pay off a landlord’s mortgage rather than their own presumably make up a figure much closer to the 7% of the population that rented privately in the mid-1980s than the 20% (4.5 million households) forced to rent privately today.

The Renters’ Reform Bill

In 2019 it became both parties’ policy, and then a formal Queen’s Speech commitment, to abolish ‘no fault’ evictions.  In other words, we can expect some form of security of tenure to be restored to private tenants.  As set out above, security of tenure is the missing piece of the still-existing rent control framework (without ‘no fault’ evictions, unless the tenancy agreement has a provision for rent increases, landlords will have little choice but to increase rents by the formal, controlled system of statutory notices).

So the good news is that the Tories – whether they realise it or not – have now reverted to their 20th century position: they are now within the consensus that supports rent controls.  I, for one, welcome them back into the fold.

<strong><span class="has-inline-color has-accent-color">Nick Bano</span></strong>
Nick Bano

Nick Bano is a lawyer and housing activist.

TWITTER
Categories
Blog Post

Beyond Short-Termism: How to Fix the Covid-19 Renters Crisis

Resolution Foundation report demonstrates the inadequacy of the Government’s response to the renters crisis – it must go beyond its own short-termism, writes Jack Shaw.

In March the Government said that this pandemic was an opportunity to end rough sleeping for good. New research by the Resolution Foundation has made it clear that that won’t be the case unless the Government is willing to put protecting renters and tackling homelessness at the top of its domestic agenda – and it can only do so by legislating. 

At the end of October the Resolution Foundation published its report Coping with Housing Costs, Six Months On, based on a survey in September of 6,000 working-age adults across the country. This follows the same survey carried out in May, and provides a unique opportunity to view the pandemic through the lens of housing.  The findings are stark, if not all too familiar.

The basic tenet is that the safety net put in place at the beginning of the pandemic for private and social renters, as well as homeowners with mortgages, falls short of the support required to keep people from losing their homes. 

Comparisons between tenures show that, across multiple indices, renters are hit harder. Compared to homeowners with mortgages, renters – social and private – are more likely to have lost their job or been furloughed; be in arrears; cut back on other items, dip into savings or borrow to cover housing costs; be in receipt of Housing Benefit and Universal Credit; and be less certain about where they’re going to live in 12 months’ time.

Over time the need for homeowners with mortgages to draw on mortgage holidays has fallen, while their job certainty appears to have increased – only three per cent of people with mortgages reported job losses, compared with eight per cent in the private rented sector and seven per cent in the social rented sector respectively. 

It does not appear that the need for housing support for renters has receded as much as we had hoped over the same period. Fewer renters reported being on furlough in September compared to May – perhaps because some have returned to work – but more reported losing their job.

Likewise, the number of renters seeking – and being refused – rent reductions has remained relatively stable at around one in 20. The picture is nuanced, but there are several conclusions that can be drawn.  

First, the blow to households with mortgages has been softer during this pandemic. Second, not only have renters been hit harder, but they have also recovered more slowly. Third, the interventions put in place by the Government aren’t sufficient. At best, they delay homelessness, not prevent it. True, renters have benefitted from a ban on evictions, and an uplift in Local Housing Allowance (LHA) rates and Universal Credit (UC), but none of these are long-lasting.

The LHA rate rise itself follows a capricious rate freeze by the Government in 2016, which decoupled it from inflation. What that means is as inflation rises, LHA rates do not rise with it. This gives renters access to fewer and fewer properties, which has undoubtedly undermined the resilience of private renters who benefit from LHA during this pandemic. 

The uplift essentially returns LHA rates to pre-2016 levels, although in another blow the Spending Review has since revealed that LHA rates will be frozen in cash terms from next year – so rates will once again fall back below 30th percentile over time, pushing renters back to square one just as they’re running out of cash. The ban on evictions has already ended, and the UC uplift is due to end in April.

As the Government battles on every front – COVID, saving the economy, protecting public health, Brexit, a credible Opposition – I suspect the Secretary of State for Work and Pensions’ latest words in Parliament are more than a Freudian slip: they were by design.

On 30 November, when asked whether she would make the Universal Credit uplift permanent, Dr Thérèse Coffey pointed out to Parliament that “we can also make the effort to encourage people to go for vacancies.” With the number of vacancies down 35% this time last year notwithstanding, such nonsense in the face of evidence-based interventions that will support renters to hold onto their tenancy is the epitome of absurdity.

But do not take my word for it. Modelling by the Joseph Rowntree highlighted that up to 16 million people across several million households are at risk of losing the equivalent to £1,040 overnight if the UC uplift ends in April, a kick in the teeth for the lowest income families just as they’re recovering from the pandemic. Research from Shelter earlier this year also revealed that 322,000 renters were in arrears despite keeping up with their rent before the pandemic began. With landlords handing out notices of repossession, we are only months away from understanding the full impact inadequate support has had on renters.

So, where does that leave us? Above all, it leaves us angry – or at least it should do. As to where it leads us: to the Government’s front door. The safety net is holding – just – in the face of the pandemic. While it cannot be the solution for renters forever, for now it’s making a global pandemic more bearable.

Though the Government cannot even get short-termism right, it already needs to look long-term too, and that starts with taking control over the domestic agenda and legislating as it has promised. Ministers need to get on with the job and abolish Section 21 of the 1988 Housing Act – so called ‘no fault’ evictions which allow landlords to evict tenants without good reason – over 18 months since the promise was made.

The Government also needs to bring forward the Renters Reform Bill, which no doubt should have precedence over some of the smaller items on the legislative agenda, such as the licensing of jet skis last month. If, as the Bill says, its aim is to improve the “security for tenants in the rental sector, delivering greater protection for tenants and empowering them to hold their landlord to account”, then surely the best time is now, before that security all but evaporates?

The cost of renting has long outstripped people’s ability to pay rent. The Government should strengthen and lengthen interventions to support those most in need, but it should also abandon its short-termism and support existing interventions with legislation that looks toward the long-term. A failure to do so will force more renters out of secure, permanent accommodation, and into temporary bed and breakfasts.

<strong><span class="has-inline-color has-accent-color">Jack Shaw</span></strong>
Jack Shaw

Jack is a Senior Policy Researcher for a Labour MP, has previously worked for the Local Government Association, and is a member of the London Labour Housing Group Executive Committee.

TWITTER
Categories
Blog Post

Government must ensure no renter loses their home due to Covid-19

Today, the country is back in lockdown. Yet this time there is no Government action to help private renters stay in their homes. 2 million private renters are now claiming state support, but the money is not sufficient to cover average rents. Thousands more are ineligible. Eviction notices have been dropping through the letterboxes of renters who have struggled to keep up with payments, through no fault of their own.

For the first national lockdown, the Government did the right thing. They paused all court proceedings, meaning no evictions could take place. They have since extended notice periods, and requested that bailiffs do not enforce in areas of local lockdown, as well as over Christmas.

For this second lockdown, mortgage holidays and credit holidays have been extended, but courts continue to evict tenants.

Rather than facing lengthy and expensive court proceedings, thousands of renters will be packing up and searching for a new home, putting themselves and others at risk at a time when we are being asked by the government to stay at home. A month-long pause on bailiff action will be of little comfort.

As the number of Covid-19 cases, and deaths from the disease, are rising fast, it is essential that renters – especially those who are vulnerable or shielding – can remain safely in their homes. To do this, the Government must pause all eviction proceedings, and ban landlords from serving section 21 no-fault eviction notices or serving notices under section 8 for rent arrears relating to coronavirus.

The Government has done the right thing before. We call on Ministers to act swiftly, to ensure that no renter loses their home due to covid-19.

Yours Sincerely,

Alicia Kennedy, Generation Rent

Michelle Simpson, The Big Issue

Bridget Young, Nationwide Foundation

Anela Anwar, Z2K

Jacky Peacock, Advice 4 Renters

Portia Msimang, Renters Rights London

Roz Spencer, Safer Renting, Cambridge House

Alicia Kennedy
Alicia Kennedy

A leader in strategic planning and campaign organisation, Alicia has had a 25-year career operating at the highest level of national politics.

She worked with Prime Ministers, Cabinet members, hundreds of MPs, and thousands of Councillors and volunteers to deliver successful local and national election campaigns for the Labour Party. She was made a life peer in 2012 and is non-aligned.

TWITTER
Categories
Blog Post

Working from home or living at work?

On March 23rd, 2020 UK was formally placed into lockdown. Those who were not key workers were asked to not work or to work from home. This meant the decades-old tradition of working professionals putting on suits and commuting into work to go into an office and sit at a desk for several hours a day ended. Abruptly.

At first, some rejoiced at this news. We all learned about the intricacies between Zoom and Microsoft Teams and most of us became pop-quiz experts. The concept of moving from your home to go miles away to do the same thing you could do from your couch seemed insane. Most of us also found that we work better in pyjamas and are never late when our bed is also our office. Long live the “Boffice” we cried!

However, as time went on, difficulties emerged for the working poor. Those who could leave their cramped city flat and run away to a big house in the country did. Oxford University found that during lockdown over 250,000 people left London to go to live elsewhere, many whom were under 30. Those who could upgrade their Wi-Fi did. Those who could create an “office” like environment with comfy chairs, a working desk, and several monitors, did. Those who could not – struggled.

Many young people realised that no garden, no living room, and several people using the same kitchen and bathroom were acceptable before Covid-19, but not during lockdown. Landlords profiteering from turning that pesky living room into a third, fourth or even fifth bedroom in a House of Multiple Occupancy were making homes unliveable in lockdown. After a few weeks – the “Boffice” was not as great as we thought it was. People were not working from home. They were living at work.

The property developer Pocket Living found that 37% of those in London who were living in shared accommodation, were living and working in their bedrooms during the lockdown. Many reported that this was affecting their mental and physical health.

Participants reported issues like “noise, lack of work surfaces, and privacy” that severely affected their ability to work. Of those asked, 46% of participants reported not having a suitable place to work. Now, after the first lockdown and as a result of these changes, the Independent reported that 70% of young people are feeling more anxious about the future as a result of the Covid-19 pandemic.

This year might be the first time that young people move out of London and other city centres on masse – or do not actually move there in the first place. At the beginning of the year, it was predicted that the number of young people living in their own private rented sector (PRS) was going to rise by over 1.3 million. Now, I would not be so sure.

But fear not landlords – help is at hand. A landlord’s best bet lies in effectively extending regulation of the minimum shared space required for houses in multiple occupation (HMO). Regulation should enhance the need for shared living spaces. Young renters need to have space in order to live and work in separate and private areas. Ensuring shared living spaces are available would provide the stability and space young people need to be efficient and productive at work.

By creating living spaces that are living and working friendly – landlords will ensure that they can keep their tenants in good mental and emotional health, and ensure their properties are occupied. It is not a huge amount of effort – but it will be well received by tenants thrice over. As young people find themselves in a new working environments and central offices become a thing of the past – landlords should act now to ensure a good relationship with their tenants for the future and the “New Normal”.

Additionally, for those unlucky enough to be on the ever-growing list of industries impacted by Covid-19 and find themselves now on furlough or in a tough job market, landlords should allow late or partial rent payments. The stress of renting as a young person is high enough, and a little flexibility from landlords would go a long way.

The “New Normal” does not have to be all bad for young renters. Instead – tenants and landlords must act together to ensure better working and living conditions. There should always be a difference between working from home and living at work and with a little communication and adjustment, better housing is possible.

<strong><span class="has-inline-color has-accent-color">Cathleen Clarke</span></strong>
Cathleen Clarke

Cathleen Clarke is a youth campaigner and Labour Party activist. She is currently running for Chair of Young Labour and works for a migrants’ rights charity.

TWITTER
Categories
Blog Post

Time is running out for renters

At the eleventh hour, late on a Friday afternoon, the Government finally decided to stop ploughing ahead with reopening eviction cases in the courts on 24 August.

This news came as a relief to the many thousands of renters struggling to pay their rent due to the economic shock of Covid-19. However, a stay on evictions keep renters safe for now but it is just a sticking plaster. It is time the Government dealt with root cause and took action to end the rent debt crisis.

Even before the pandemic hit, two million households in the private rented sector were struggling to pay their rent – paying a staggering 40% of their income to private landlords on average. 

Already stretched thin and with no savings to fall back on, private renters now find themselves without work or at risk of losing their job. 

Having to rely on the welfare system, many for the first time, renters wait anxiously for money to arrive and are devasted when the housing allowance, even with the recent Government increase, nowhere near covers the rent they owe.

New research by Generation Rent found that just 12% of those who applied for benefits after lockdown have been able to cover their rent – meaning hundreds and thousands of renters have been forced to rely solely on their landlord’s goodwill.

With unemployment rising, the furlough scheme coming to an end, and an endless wait for an inadequate benefit payment, thousands of renters are at serious risk of losing their homes.

Renters like Elizabeth, Tim, Roy, Laura and Chrissie:

Elizabeth: ‘Our three-year contract is up. We informed our landlady we weren’t able to pay full due to cuts in our salaries due to Covid19. The landlady agreed – then the landlady gave us Section 21 eviction notice.’

Tim: ‘Covid 19 has meant that income has dried up. My landlord wouldn’t or hasn’t taken the three month mortgage payment holiday. I am 3+ months behind with my rent and frightened about receiving a Section 8 eviction notice from my landlord.’

Roy: ‘My landlord has been texting me once a month since this (pandemic) started telling me I’m going to be “out on my ear” if I don’t pay, trying to increase the rent while my income has halved and my savings are dwindling, I’m terrified for my children’s future.’

Laura: ‘I’ve been furloughed and the money hasn’t been coming in until the middle of the month so I’ve been unable to pay the rent on time. I haven’t slept I’ve been ill anxiety and depression levels have gone up.’

Chrissie: ‘We explained that we hadn’t been able to work for 3 months and we’ve rented for just under 30 years. The landlords agent said ‘well you know what to do, give the keys back if you can’t pay’. We’re not eligible for benefits as we own a retirement property abroad. We are both over 60.’

These stories break my heart. Sadly, Elizabeth, Tim, Roy, Laura and Chrissie are not alone. Their stories are just a snapshot of the renter experience Generation Rent hears every day.

Many have lived in their properties for years. They have children at local schools but now find themselves priced out of the area they call home. Some are behind with rent and others haven’t even been given a reason; their landlord has simply issued a ‘no fault’ eviction notice and asked them to leave.

Our research, carried out just a few weeks ago, has shown 1 in 5 private renters who has struggled to pay rent during the pandemic has already been told to move out, been given a rent increase or been threatened with eviction. Nearly half of struggling tenants were found to be already searching for a new home, with 59 per cent unable to find one they can afford or a landlord who will accept them – meaning homelessness will be the only option for renters as they find themselves with nowhere else to go.

Time is running out for renters.

In March, Robert Jenrick promised to keep renters hit by Covid-29 in their homes. He has to deliver on this promise. He has to put in place a permanent solution to alleviate the coronavirus rent debt crisis being faced by hundreds of thousands of renters. 

With Parliament back from the summer recess, Generation Rent are more determined than ever to help renters saddled with rent debt. 

That’s why we’re campaigning for an end to the rent debt crisis through lifting the benefit cap and increasing benefits to cover average rents, no rent increases until March 2021, and make grants available to cover the rent of the most financially vulnerable through our Coronavirus Home Retention Scheme.

We want to see an end to coronavirus evictions through emergency legislation to prevent ‘no fault’ evictions and evictions for rent arrears. This will ensure renters who have been hit by the pandemic do not lose their homes through no fault of their own.

And we want to see a permanent end to Section 21. Evictions for no reason were a leading cause of homelessness before the pandemic. Section 21 eviction notices are in frequent use and the pandemic has highlighted that the law is not fit for purpose. The Government has pledged to end ‘no fault’ evictions, and now is the time for it to honour this pledge. 

Without a permanent solution to the rent debt crisis and evictions due to Covid-19 thousands of renters are at serious risk of losing their homes when the ban ends.

Generation Rent will be doing all it can to stop private renters tipping over the edge into homelessness.  Homelessness destroys lives. Help us end the rent debt crisis – sign up at GenerationRent.org

<span class="has-inline-color has-accent-color"><strong>Alicia Kennedy</strong></span>
Alicia Kennedy

A leader in strategic planning and campaign organisation, Alicia has had a 25-year career operating at the highest level of national politics.

She worked with Prime Ministers, Cabinet members, hundreds of MPs, and thousands of Councillors and volunteers to deliver successful local and national election campaigns for the Labour Party. She was made a life peer in 2012 and is non-aligned.

TWITTER
Categories
Blog Post

Rescuing the Affordable Housing Commission Report from the chaos of Covid-19

It is the misfortune of the Affordable Housing Commission to release their report in March 2020, just as Covid -19 took hold. Not only did the report get buried by more pressing news, but the Commission also had to rush out a Covid-19 supplemental report in July 2020.

We need to rescue the report because it offers a great analysis of the housing crisis and realistic policy proposals. This is exactly what you would expect from a Commission headed by Lord Best, one of the sharpest minds in UK housing and supported by the left leaning Smith Institute.

The main argument is the last 20 years has seen the continuing decline of social rent housing, and the doubling in size of the Private Rented Sector (PRS) up to 22% of current housing. There are now 1.5m private landlords. Whilst, the social rent sector has continued to decline. The problem is that people who need the security of social rent sector face the insecurity of the PRS. Those on a low and insecure income, elderly, the ill and those with children should not be living in a sector where you can be required to leave with just a couple of months’ notice. For instance, a quarter all households with children now live in the PRS compared to 8% in 2004.  People are staying longer in the PRS, often into old age. The Commission describes this as a ticking time bomb, as an increasing number of older private renters will find that they can no longer pay the rent when they retire.

The commission found that 23% of private renters are paying more than 40% of their income on rent, which is creating poverty. A Nationwide Foundation survey in 2019 found that a third of private renters had less than £39 per week to live on after they had paid essential bills.

In London the difference between social rent and private rents is the greatest, driving many below medium income into poverty. In the area of Bermondsey, south London where I work 50% of ex –council homes are now rented out, with private renters paying nearly four times more than their council neighbours and having to find a deposit of around £2,000.

The other effect of high rents is that it stops renters from building up the funds to escape into owner occupation. Bob Colenutt estimates a third of people born in the 1980’s and 1990’s will never be able to afford to buy their own home (Colenutt 2020). The average deposit needed by a first time buyer is London was a staggering £146,757 in 2019. Also the Commission highlights that the explosion of Buy to Rent mortgages has helped to force up house prices. Even George Osborne, the most political of Chancellors, recognised the need to slightly dampen down the increase in Buy to Let.

Within social housing, there has been a trend towards higher rent ‘affordable’ homes, rather than genuinely affordable social rents. Higher rents are seen as the way of spreading government money more thinly and building more ‘sub-market’ homes. Government subsidy has dropped by a third since 2010 and housing associations have moved 100,000 properties from social rents to higher affordable rents. The problem, as noted by the Commission, is that for low earners higher rents mean more poverty.

The Commission argues for a re-balancing of the housing market by increasing social rent housing, to provide an alternative for those for whom PRS is unsuitable. The Commission accepts that it will take 25 years to rebalance, and proposes that we start now so that a child born today should be able to live in an affordable home when they are 25 and want to live independently.

To achieve this, 90,000 new social rent and 55,000 shared ownership/ intermediate rent homes are needed each year to address the overall shortage of 3.1m social rent homes identified by Shelter

This will require an increase in government expenditure from 1.9% to 3%, which is £12.8 billion per year. To put this into context the housing benefit bill was £25 billion in 2016 and £1 billion was spent on poor quality temporary accommodation for homeless people in 2019, but neither expenditure resulted in any new homes. The cost of Help to Buy, aimed at helping first time buyers, was £10 billion in 2013 and there is a debate about whether the scheme added to supply or merely forced house prices up.

The Commission does argue for PRS rent caps, the end of Section 21 evictions and a landlord registration scheme to give some protection to those remaining in the private rented sector.

The Commission also calls for local authorities to be given discretion over the selling of their council homes, in the context of the intensity of housing need in their area.  

In a Zoom meeting with LHG members, Thangam Debbonaire, Shadow Secretary of State for Housing, was clear that this is too early in this Parliament to make spending commitments, especially as the full effects of the Covid-19 recession are not known. However, this report seems to set out a good general direction of travel.

<strong><span class="has-inline-color has-accent-color">Andy Bates</span></strong>
Andy Bates

Andy is on the Executive Committee of the Labour Housing Group and is a member of Old Southwark and Bermondsey CLP.

His is an advocate of residents collectively managing their own homes. Andy is a JMB Manager at the Leathermarket JMB. Southwark’s largest resident-managed housing organisation covering over 1,500 homes.

TWITTER
Categories
Blog Post

Out of area placement incentives need to stop

England’s housing system is broken, and the out of area placement process could not make it more obvious. Out of area placements are used by local authorities across the country in order to address the ever growing demands for housing. Council’s often failing to find a local solution, will offer individuals the opportunity of accommodation outside of their hometowns.

Generally, authorities will use this option to source temporary accommodation opportunities, which are meant to provide short –term housing, but in some cases can last for over three years. Residents can also be offered permanent relocations out of an authority’s jurisdiction, if suitable housing is not available locally, through the private rented sector.

On the face of it that sounds like it should make sense, but in practice where real lives are involved, it is often a tragedy bordering on farce. Struggling London boroughs, not able to meet housing demands in already heated markets, eye up housing in the comparatively cheaper Home Counties to relocate their residents. Likewise, the now saturated out-of-London housing markets in turn force those local authorities to seek housing solutions elsewhere, some sending residents as far as 250 miles away to northern cities, in order to secure affordable accommodation, having made deals with private sector landlords.

These are capacity and cost based decisions that reflect the state of our housing market. In fact, some councils are paying hefty incentives to private sector landlords outside of their borough, in order to secure accommodation. Such incentives can be for thousands of pounds and can undermine an authority’s ability to procure housing in the local market, creating a vicious cycle of need.

In theory people can only be placed out of area for housing with their consent. In reality there are increasing questions about the legitimacy of this claim. A recent documentary, Forced out Families*, featured families from Medway who were moved as far as Bradford. One resident interviewed, claimed that he had been threatened with having his children placed in care, if he did not take the accommodation offer, while another was told he would not be able to keep his dog if he decided to stay local. The pressures placed on the housing system makes it incapable of addressing the needs of residents, forcing them to make decisions with little ‘real’ choice.

It is often the most vulnerable in our communities who find themselves in such challenging circumstances with the potential to have significant long-term impacts. Residents in need could potentially be moved hundreds of miles away from their families and local networks to completely different towns and cities without the support they need. Most at risk are children who in their formative years could be faced with unstable circumstances, with the potential to have a detrimental impact on educational achievement and mental health.

The impact on local resources is also significant. The law governing out of area placements requires that the receiving authority is made aware when residents are placed in temporary accommodation within their borough, but this does not always apply when the transfer is on a permanent basis. This means that local authorities will often have no real grasp of the numbers moving into their jurisdiction. In places like Medway, the increasing number of families relocating under this system is placing additional pressures, on already creaking local services, including schools and health care.

Most local authorities will express their frustrations at the current system, and stress that out of area placements are often a last resort. So what can really be done to fix this growing trend? Understanding the origins of the problem is the first step in finding solutions. A housing crisis, which sees house building failing to keep up with demand and chronic lack of social housing is central to the challenge.

It has been exacerbated in recent years by an increasingly unaffordable private rented sector and changes to the welfare system, driven by a Conservative government, which has placed an increasing number of households at risk of homelessness and left local councils struggling to meet housing demands. Regional economic inequalities are also highlighted, confirming that house prices in London and the South East are no longer sustainable.

The causes are complex, which means that the solutions are also not simple. Local authorities do not necessarily have the answer and in the long term it requires a complete overhaul of our housing system, addressing the inherent problems which have led to the current crisis. In the short term, local councils need to come together to look at how we can work better together to manage housing demands, share information and alleviate the burden on local resources.

* ITV Documentary: Ross Kemp: Living With ‘Forced Out’ Families

<strong><span class="has-inline-color has-accent-color">Naushabah Khan</span></strong>
Naushabah Khan

Naushabah Khan has been a Medway Councillor since 2015, and is currently Medway Labour’s Spokesperson for Housing. Naushabah is passionate about securing sustainable development in Medway which includes sufficient affordable housing and proper infrastructure.

Naushabah was a Parliamentary Candidate for the Rochester and Strood in both the by election in 2014, and the general election in 2015. She is the Local Government Representative for the South East and works as a Director in Public Affairs.

TWITTER