Monday, 30 April 2012

If not a home for life, then what?

If you moved into a new home tomorrow, how long would you expect to live there? If you are a private renter, the answer is probably not that long. One third of people who rent privately have been in their current home for less than a year compared with 2.5% of owner occupiers and 8.4% of households who rent from a council or housing association.

But if the government has its way, people in social rented housing will soon be on the move much more. In an attempt to encourage greater mobility, it is encouraging social landlords to offer fixed term tenancies (possibly for as little as two years) to new tenants.

FTTs were originally proposed for 'affordable' renting, where tenants pay up to 80% of market rents rather than social rents, which are generally lower. Since the start of April, they have been available as an option for landlords letting any type of social housing, providing the family or individual was not a tenant on April 1, in which case they are still entitled to a lifetime tenancy.

The early signs are that social landlords are being cautious before rushing into using FTTs. But as pressure on their stock of housing becomes greater, and waiting lists grow longer, more landlords will almost certainly use FTTs, and decide later whether to renew the tenancy on expiry.

At the same time, housing benefit caps brought in as part of the government's welfare changes may mean that families are forced to move because they cannot to afford to make up the difference between their rent and the dwindling sum they receive in benefit or local housing allowance. A classic example is the family whose children move away and are caught by the 'bedroom tax', which penalises them for having a bedroom that nobody sleeps in.

It would be foolish to suggest that social housing should not be allocated on the basis of need, as it has always been. In the same way, it is also fair that people's needs are reassessed from time to time. But turning it into some form of transitory 'stopping off point' while people ponder what they are going to do with the rest of their lives, is hardly likely to help social housing lose the stigma that is frequently associated with living in it.

The argument behind Right to Buy and its discounts is that, by paying rent over a period of time, households have effectively bought a stake in the home and this must be respected. In the same way, while council and housing association properties ultimately belong to the landlord (and to some extent the taxpayer), tenants cannot simply be turfed out onto the street because their circumstances change or their profile is not precisely the same as it was a few years earlier.








Friday, 10 February 2012

Shout about how to help the victims of benefit cuts

As the Welfare Reform Bill weaves its way between the Commons and the Lords, there is little doubt that cuts in housing benefit and other welfare changes that have not already come into effect will do so soon. In other words, a lot of poor people are about to become even poorer.

Ever since welfare changes were first mooted about 18 months ago, the government has pointed to discretionary housing payments (DHPs) as a safety net to help those worst affected. Indeed, it is trebling the sum available for councils to hand out to needy families in the form of DHPs from £20m in 2010/11 to £60m in 2012/13.

But research I recently carried out for The Guardian shows that, not only did many councils not use all the money that had available them to spend on these emergency payments in 2010/11, but awareness of the payments among social landlords in particular leaves a lot to be desired. The article can be read here:

http://www.guardian.co.uk/housing-network/2012/feb/01/councils-fail-spend-thousands-housing

Across England, Scotland and Wales, local authorities failed to spend nearly £1m of the £20m available to them for DHPs in 2010/11. Challenged as to why they had not spent the full allocation on offer from the Department Work and Pensions, many said there was insufficient demand from tenants in the private rented sector as, at the time, local housing allowance rates were reasonably generous.

In fairness, they also said demand for DHPs has risen since last April and that they expect it to rise further from April 2012. This is because many more families will face financial hardship due to benefit caps and other government measures, including the new under-occupancy rules in social housing. But it is worrying that many saw DHPs as being aimed primarily at households renting from private landlords, while some housing associations admit they do not publicise the payments as much as they could.

Not only do local authorities need to ensure that the process for claiming a DHP is publicised and understood but, where sufficient claims are received, they should at least spend all they money available to them. It would also appear that housing associations and councils need to raise their awareness of DHPs and work together more closely. If not, the pain felt by those most affected by welfare changes will be even greater than is necessary.

Monday, 30 January 2012

Why there is not necessarily any right to buy

Considering its impact in previous decades, the likely return of the Right to Buy as a major feature of housing policy has attracted surprisingly little attention.

True the government is doing its best to keep what it calls the 'reinvigoration' of RTB as low key as possible after publishing a consultation paper just days before Christmas. But the fact is, once consultations close later this week, ministers are almost certain to go ahead with raising discounts in an attempt to entice more council tenants to join the property ladder.

At present, councils are only selling about 2,600 homes per year through RTB. By offering tenants discounts of up to £50,000, David Cameron hopes to sell about 100,000 homes over the next few years although there is no precise date for meeting this target.

But is this good news for council tenants now or in the future and what does it mean for the housing sector as a whole? The main criticism of RTB in the 1980s and 1990s, when annual sales sometimes exceeded 100,000, was that councils were not allowed to keep receipts to build new social housing.

This time around, the government is promising that homes sold off will be replaced on a one-for-one basis. But they will not be replaced with new social housing but rather with homes that will be let at up to 80% of local market rents - so-called affordable renting. Thus councils will be expected to join housing associations in borrowing money that can be paid for using future rent receipts. Meanwhile, the overall number of homes available for poorer familes will be further depleted.

The government estimates that about 300,000 households renting from councils or housing associations are eligible for the RTB and can afford to buy their home because the head of the household is in work. Some, it says, will be better off paying a mortgage than rent. But as the past few years have proved, paying off a mortgage can sometimes cause major difficulties, especially for families on limited incomes.

Increased RTB sales will, argues the government, boost economic growth by stimulating house building. It is highly likely that many of the extra sales will come in areas such as London where the discount cap is being raised threefold. But these are also the areas where it generally costs more to build new homes and where the shortage of social rented housing is often most acute.

It is not clear at this stage whether individual councils will keep all or the majority of receipts from RTB sales to invest in new housing, or whether there will be some form of national system for distributing the money raised. Therefore, at the very least, we should be in for a major row over the true meaning of localism, if not over the wisdom of selling off much-needed social housing with no clear policy for replacing it.