Inside Housing | Pay to Stay meetings cancelled as policies face delays

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11 November 2016

Pay to Stay meetings cancelled as policies face delays

 

Meetings of the Government’s Pay to Stay working group have been cancelled as several key measures in the Housing and Planning Act look set to be delayed.

Inside Housing can exclusively reveal that the Government has cancelled scheduled meetings despite the policy- under which higher earning tenants pay up to market rent- originally being planned for implementation in April next year.

It is not clear why the meetings have been cancelled, but sector figures this week said it suggested a delay. Councils have been urging ministers to put the start date back to give them time to prepare.

The news emerged days after a senior civil servant admitted the Right to Buy (RTB) extension to housing association tenants is set to be delayed as a result of the Brexit vote.

Housing minister Gavin Barwell also said this week that councils “need plenty of time” before implementing the higher value asset levy intended to fund the RTB extension, in response to a question about whether councils would still have to pay the levy in 2017/18 as expected. The government said regulations to implement Pay to Stay and the levy, along with RTB guidance, will be published in ‘due course’.

The Pay to Stay policy requires council tenants to pay up to market rent if they earn over £31,000, or £40,000 in London.

The Government has already taken several steps that water down the effects of the policy. Inside Housing reported last month DCLG was considering exempting council tenants in areas where social rents and market rents are similar and councils will be able to decide how to define market rent locally.

The Higher Value Asset Levy councils would be forced to pay also faces delay. Housing bodies had expected the Levy to be introduced from April next year. However, housing minister Gavin Barwell told the Communities and Local Government committee this week that no implementation date had been decided. He added he is “very aware” the legislation was “quite controversial” and the government will need to give councils “plenty of time” to implement the policy.

The Levy regulations were due to be published before the parliamentary summer recess in July but still have not materialised four months later. Experts said it would now be difficult for the policy to be introduced from next April. Clive Betts, chair of the CLG committee, said most councils are setting their budgets for next year and “haven’t got any idea what figure is going to be placed on them to estimate the high value assets”.

John Bibby, chief executive of the Association of Retained Council Housing, said if the voluntary RTB is delayed- as a civil servant this week said it would be – the higher value asset levy for councils should also be put back. He said ARCH would lobby “very strongly” for the levy to be delayed. He added: “If [the voluntary RTB] is not going to go ahead then there’s no reason to levy the councils.”

John Healey, shadow housing secretary said: “Ministers should recognise that on the Housing and Planning Act they may have won the legislation but they lost the argument. No-one thinks that forcing councils to sell off the best of their homes is an answer to the country’s affordable housing deficit. It can only make the problem worse.”

A DCLG spokesperson said nothing had changed with the higher value asset levy policy. He added: “We are currently considering how best to implement the policy to ensure it is robust and fair to councils. We will make an announcement in due course.”

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Inside Housing | Housing minister casts doubt over Higher Value Asset Levy date

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08 November 2016

Housing minister casts doubt over higher value levy date

The levy is meant to fund the building of homes to replace those sold through the extension of Right to Buy to housing association tenants. The Government was widely expected to implement the policy from April next year but detailed regulations required to implement the measure have not been published. A Department for Communities and Local Government civil servant also admitted last week that the Right to Buy extension has been delayed by the Brexit referendum vote.

Speaking at a Communities and Local Government committee session this afternoon, Mr Barwell said the government has not made any decisions about when councils will be expected to make the payment but details of the “controversial policy” would require “quite a notice period” before being introduced.

He said: “We haven’t taken a decision on timing yet but we have a statutory duty to consult councils before making any determination setting out the payment that would be required and the regulations require affirmative procedure in the House so there’s clearly quite a big process that we have to go through before we could start making charges.”

Mr Betts pressed the housing minister whether councils will be expected to find any of the high value asset levy in their budgets for 2017/18.

Mr Barwell said: “In terms of the process we have to go through, consulting and taking affirmative regulations through the House, you can see there would be quite a notice period before we could start making those charges.”

Clive Betts, chair of the CLG committee, said most councils are setting their budgets for next year and “haven’t got any idea what figure is going to be placed on them to estimate the high value assets”.

Sajid Javid, communities secretary, said the government is “clearly very much aware that councils will need to know what the burdens are on them and that is something we don’t want to surprise any councils with”.

He added: “We want to give them fair notice what that will be. And as we progress and have more details we will share them.”

Mr Betts asked if the payment would be required at the beginning of a financial year. Mr Barwell said the Government wanted to make sure it is a “smooth process”.

He added he is “very aware” the legislation that went through the House was “quite controversial” and it will require time to allow people to comment on the detail of the regulations when they are published and give councils “plenty of time” to implement the policy.

The Housing and Planning Act, which received Royal Assent in May, gives the secretary of state the power to levy a charge on councils, based on estimates of higher value vacant stock.

Private Eye | The Homelessness Reduction Bill

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No.1430 | 28 Oct – 10 Nov 2016

Campaigners are cautiously optimistic that a Private Member’s Bill to improve the safety net for homeless people will pass its first Parliamentary hurdle on Friday [28 October 2016].

The Homelessness Reduction Bill, put forward by Conservative MP Bob Blackman with the support of the all-party Communities and Local Government Committee and the homelessness charity Crisis, is modelled on legislation already introduced in Wales.

It would  introduce new duties to prevent and relieve homelessness, in particular by helping single homeless people currently being turned away by councils because they are not in ‘priority need”.

Two immediate tests confront the Bill when it comes to a Second Reading.

First,more than 100 MPs must turn up and vote on a Friday to prevent individual members from talking it out. That effort got a boost when Jeremy Corbyn wrote to his Labour MPs encouraging them to attend.

Second, only backing from the Government can secure enough Parliamentary time to eventually bring the Bill into law. So far, Ministers have made positive noises, but no commitments.

The larger question, though, is whether homelessness will keep rising faster than any legislation can prevent it. Demand for housing is increasing rents even as cuts to Housing Benefit reduce the ability to pay them. More cuts are still in the pipeline, starting with a reduction in the Overall Benefit Cap from 06 November. This will leave tenants in expensive areas and in larger homes across the country with worsening rent shortfalls to be paid from benefits that are frozen until 2020.

Although the homelessness prevention legislation in Wales seems to be working well, that is in the context of a very different attitude to genuinely affordable housing. Whereas Wales is still building social housing and is about to abolish Right to Buy, England stopped funding it in 2010, increased Right to Buy discounts and is about to force councils to sell their higher-value homes as they fall vacant.

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Priority Pass | Scene & Heard by David Ziggy Greene [Private Eye No.1430]

 

APSE Direct News | Homes for all!

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May/June 20216

Homes for all!

Catch up on the latest housing research by APSE and the TCPA, which follows up on our previous research, Housing The Nation: Ensuring Councils can deliver more and better homes

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The latest APSE housing research, Housing The Nation: Ensuring Councils can deliver more and better homesis a collaborative effort between the APSE[TCPA] and APSE. Our aim was to establish the latest position on housing across the UK and, crucially, find out how local councils could produce the homes needed to support everybody in their local community.

The latest household projections for England, published in November 2015, suggest we need over 220,000 additional homes each year until 20131 if we are to accommodate the projected growth in households. Currently, however, we are reaching just over half that figure. To catch up by 2020, we will now need to create over 310,000 homes a year over the next 5 years. This in itself is a stark finding; as the goal to provide enough homes slips further away each time we fail to meet these targets, the pressure on housing delivery is inevitably intensified.

Whilst Government policy has been concentrated on the delivery of so-called affordable homes, the research calls into question what we can reasonably describe as “affordable”. Housing shortages, and the resultant high prices and rents, mean that young people are living with parents or in house shares for longer, rather than forming a household of their own. Rising student debt levels and potential future welfare reform are likely to make their position even more difficult. Even if the homes required are actually built, the latest Government  household projections suggest that couples aged between 25 and 34 will be less able to live in their own home n 2031 than their counterparts in 2011.

Housing need has huge implications beyond those unable to afford to buy or rent their own property. Improved planning and better housing have long been identified as essential for improving the health of communities, reducing health inequalities and cutting costs for the taxpayer.

Conversely, poor quality housing and inadequate supply of new homes impacts on the social well-being of communities, with costs to the NHS reportedly at £1.4bn. A lack of decent affordable housing also reduces labour mobility and undermines the ability of our towns and cities to attract new businesses.

A recent CBI survey [London Business Survey, September 2015]highlighted that housing costs and availability in London were having a negative impact on companies’ ability to retain and recruit staff, particularly employees on lower incomes; 57% of businesses surveyed report that housing cost and availability was negatively impacting on attempts to recruit entry level staff.

So what are we, APSE and the TCPA, calling for? We want the Government to develop a housing strategy for the nation that provides decent homes for everyone in society, including those dependent on social and genuinely affordable housing for rent. Whilst efforts have been concentrated on affordable homes to buy, we want the Government to ensure that local authorities are at the heart of this new housing strategy, not least because the definition of “affordability” should be determined locally. Councils are best placed to respond to local need, but they require the freedom and flexibility to deliver new homes.

We are also calling upon Government to reverse its decision to reduce social rents by 1% per year for the next 4 years – this move alone has taken millions away from local authorities’ ability to invest in the social rented sector. The Housing and Planning Act 2016 arguably further removes councils from the equation, introducing new changes changes to Right To Buy and the selling off of the most valuable housing assets.

APSE and the TCPA believe that councils, despite the added burdens placed on them by the Housing and Planning Act, can play a stronger role in driving the delivery of new homes, either on their own or through joint vneture. Our research explores the role of local housing companies working alongside councils to deliver new homes. Council land and assets can help drive investment in the most sustainable locations, and the private rental sector can help meet local housing needs, generating long-term income streams in the process.  Councils investing in  the private rented sector can also encourage others to invest in their local areas, and bring about positive investments. This can include providing greater choice and better quality accommodation for those reliant on the private rented sector. Whilst the private rented sector will not replace the need for social rented homes, it is part of the toolkit available to local councils, allowing them to respond to urgent local housing need.

Case studies within the report have found councils being innovative, using local housing companies.

Thurrock Council established a local housing company, named Gloriana. Wholly-owned by the the council, Gloriana is delivering 1,000 new affordable homes over the next 5 years, as well as a 10% increase – using current projections – in the number of new private sector homes delivered over the next 5 years. All of these new council homes will be built to London Space Standards and Lifetime Homes, reflecting high quality design and materials.

Within the London Borough of Harrow, their Great Estates Model has established a local regeneration company with ambitions to deliver a £1.75bn investment programme into Harrow and Wealdstone town centres. Included within the regeneration plan is the delivery of 5,500 new homes, 2 new schools, around 3,000 new jobs and a district heating network to service major sites alongside a £31.3m funding pot through the Mayor of London’s Housing Zones scheme.

In Manchester, the Housing Investment Fund – a joint venture between Manchester City Council and the Greater Manchester Pension Fund, administered by Tameside Council – was established to deliver private rented sector housing, delivering on local housing need whilst also creating a return for the Local Government Pension Fund.

In Edinburgh, a council-led joint venture using the National Housing Trust initiative is helping to deliver new affordable homes using £182m of private and public funding. However, Edinburgh is not just delivering standard housing units – of 1,055 new affordable homes completing in 2014/15, around 115 homes were specifically designed with older people in mind.

In another best practice example, Aberdeen has created a new council-led joint venture with People For Places, which is set to to deliver homes for key workers on modest incomes. They plan to develop an initial 1,000 affordable homes and 1,000 private development homes, with the potential for a further 1,000 properties and an investment pot for affordable housing and private development of £300m.

We know that the solutions to the housing crisis facing the UK are complex. Yet, our findings show that without local councils in the driving seat, we cannot deliver the homes we need. A failure to local councils at the heart of housing delivery, and to address the need for new social homes to rent, will spell catastrophe for a whole generation struggling to either afford to buy so-called affordable homes, or rent from a largely unregulated private rented sector.

Now is the time for Government to place councils at the heart of delivering homes for all.

WMN | Councillors call for right-to-buy scheme to be scrapped

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11 August 2016

Councillors call for right-to-buy scheme to be scrapped

By Kate LangstonPosted: August 11, 2016

(top right) Cllr Owen

Over the last three years, Devon and Cornwall councils have funded an average of just one new home for every four sold – despite a policy of one-for-one replacements.

Councillors claim this is because the scheme is unsustainable, and warn the problem will get worse if ministers plough ahead with plans to extend it.

Exeter City Council member and portfolio holder for housing, Keith Owen, accused the Government of failing to grasp “the seriousness of the situation”.

Cllr Keith Owen

“As a local housing authority, we are not in a position to replace anywhere near the number of council properties which are acquired by tenants under the right-to-buy scheme,” he said.

“And the situation in Exeter is generally no different than it is through the rest of the country.

“Its getting harder and harder to [replace homes], and its not going to be helped by recent Government legislation.

“The whole idea is badly thought through… I think it has to be scrapped.”

According to new figures from the Local Government Association, the rate at which councils in England replaced homes sold under right-to-buy (RTB) fell by more than a quarter last year.

Their data shows that while 12,246 council homes were sold to tenants in 2015/16, just 2,055 replacements were started by councils.

Government figures show that in Devon and Cornwall a total of 361 properties were sold under RTB between 2012/13 and 2015/16.

In that same three year period, councils only began the process of replacing 87 homes.

In the district of East Devon, the ratio of replacements to sales since 2012/13 has been 4.5 to one.

A spokesman for the council said it had been struggling to fund replacements “for a number of years”.

Right to buy figures for Devon and Cornwall (source: DCLG live sales tables)

“The receipt we receive from Right to Buy sales, after the statutory and significant discount is applied, is insufficient to purchase or build replacement units on a one for one basis,” he said.

“We have purchased and built some new homes over the past few years, but our ability… has been compromised by a recent Government requirement to reduce rents by 1% each year for the next four years.”

“This reduces our ability to finance new council homes as it eliminates any surpluses we have set aside for new affordable homes.”

Cllr Owen shares concerns about rent reductions, as and about plans to fund the extension of RTB to housing associations through the sale of council assets.

He said the forced sell-off of high-value social housing will see local authorities deprived of both the asset itself and income from rent.

“It’s a vicious circle,” he said. “Any money we’ve had in the past to build replacement council houses is not going to be there.

“There’s no sign the government understands the seriousness of the situation.”

A Government spokesman said there is a rolling three-year deadline for local authorities to deliver an additional home “and so far they have delivered well within their sales profile”.

“However, we have always been clear that if local authorities don’t start building replacement homes within the three-year deadline, then we will step in and build them for them,” he added.


What is right-to-buy?

Right-to-buy was introduced in 1980 under Margaret Thatcher’s government, as a means of boosting home ownership

It gives most council tenants the right to purchase their home from their landlord at a discount of up to 35% for a house, and 50% for a flat

Tenants can apply to buy if the property is their only or main home and self-contained, and they have had a public sector landlord for three years

If the property used to belong to the council, but has since been sold off, a tenant might still qualify for “preserved” right to buy

The Government is looking to extend right-to-buy to housing association properties, starting with a voluntary pilot scheme, through the Housing and Planning Bill

Guardian Editorial | The Guardian view on housing policy: a rethink is needed

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11 August 2016

EDITORIAL | The Guardian view on housing policy: a rethink is needed

The government has boosted demand but not supply. There are too few new homes, and too many penalties on social housing. It’s not a policy, it’s a disaster
Terraced houses.
‘In the past six years, the party of home ownership has failed to revive home ownership.’ Composite: Alamy

It is very hard to detect what this government thinks a successful housing policy looks like. In the past six years, the party of home ownership has failed to revive home ownership. Far from the Tory dream of a Britain transformed into a property-owning democracy, the median price for a house is now nearly nine times the median income and generation rent struggles to put so much as a toe on the property ladder at all.

Meanwhile, the long war of attrition against social housing goes on: right to buy, almost moribund by 2010, was fanned back into life with new and bigger discounts in the early coalition years. Council receipts from the discounted sales were cut to a third of the sale price, which has to be reclaimed in a slow and bureaucratic process from central government to meet the obligation imposed by Whitehall to replace all right to buy sales. In fact, councils are now building just one new home for every nine sold.

The Local Government Association, representing councils in England and Wales, says a rethink is essential if the right to buy is going to benefit more than this generation. Soon, higher-value council properties will have to be sold too, to fund a new assault on social housing, the introduction of the right to buy for housing association tenants. The latest English Housing Survey found that tenants were paying up to half their income on rent – even more in London. Meanwhile the rent councils receive is being cut year on year. The LGA foresees a £2bn hole in council finances by 2020.

An era of very low interest rates, and the new ability of people with pension pots to invest in property rather than buy an annuity with it, is propelling a huge market in buy-to-let. It has slowed with new higher stamp duty, but the grants designed to support first-time buyers have had only a limited effect as the supply of new homes continues to lag far behind demand, putting the next move out of reach. There are already 1.4 million people on council waiting lists. The cost of housing benefit for tenants in private accommodation is soaring along with rents – and homelessness. Earlier this month, the Resolution Foundation published research showing unaffordable home ownership is not just a London problem but affects people across the whole of the United Kingdom. It is at its lowest level since the early 2000s. The number of new homes started was less than 150,000 last year, the average house price has risen 60% in 13 years, while pay for many people has risen at only a fraction of that rate. On some estimates, in less than a decade there will be a shortfall of at least 4m affordable homes. Whatever its intentions, the government appears to have created a housing catastrophe.

The Local Government Association is controlled by Conservative councillors. It is not a radical organisation trying to challenge government. It merely wants voters able to live in homes they can afford to buy or rent. They know how to do it. Theresa May promised a country that did not entrench privilege. Housing is a good place to start.

 

Guardian | Right-to-buy reform urged as council leaders fear for social housing

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11 August 2016

Right-to-buy reform urged as council leaders fear for social housing

Figures show that replacements for homes sold under the right-to-buy scheme fell by 27% last year, worsening the housing crisis

Hilary Osborne
Matilda House in Wapping, London, which is made up of private tenancy and housing association homes
The promise to make discounts available to 1.3 million housing association tenants was part of the Conservative manifesto at last year’s general election. Photograph: Dan Kitwood/Getty Images

Analysis by the Local Government Association (LGA) showed that 12,246 council homes were sold to tenants under right to buy in England in 2015-16, but just 2,055 replacements were started by councils – a drop of 27% on the previous year.

The right-to-buy scheme allows low-income tenants to buy their council-owned home at a sizeable discount to market value. Since it was launched by Margaret Thatcher in the early 1980s, almost 2m properties have been sold by councils across England and the proportion of homes that are social housing has fallen from 31% to 17%. Use of the scheme was slowing until the Conservative government relaunched the scheme in 2012 and quadrupled the discounts available to London tenants.

Right to buy has been scrapped in Scotland and the Welsh assembly last week confirmed that it planned to do the same. The LGA said the scheme could become a thing of the past in England, too, if councils were not helped to fund replacement homes.

The organisation, which represents 370 local authorities across England and Wales, said it expected 66,000 council homes to be sold to tenants by 2020 and that councils would struggle to replace the majority of them.

A further 22,000 homes will be sold if councils are forced to offload higher-value properties to fund the extension of right to buy to housing associations. The promise to make discounts available to 1.3 million housing association tenants was a key part of the Conservative manifesto at last year’s general election.

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The LGA warned that the fall in the number of much-needed council homes would exacerbate the housing crisis and increase homelessness and spending on housing benefit at a time when there were 1.4 million people on waiting lists.

The government has committed to one-for-one replacements for all additional homes sold since the scheme was relaunched. However, the LGA said urgent reform was needed to ensure councils could replace housing quickly and effectively.

It said authorities needed to keep 100% of receipts from sales, rather than the one-third they can currently retain, and that discounts should be set locally to reflect regional variations in house prices. Under the existing system, London tenants can get a discount of up to £103,900, while outside the capital homes are sold for up to £77,900 below market value.

The LGA’s senior vice chair, Nick Forbes, said current arrangements were restricting councils’ ability to replace homes and suggested this would mean that eventually there were no more properties to sell. “Right to buy will quickly become a thing of the past in England if councils continue to be prevented from building new homes,” he said.

“Housing reforms that reduce rents and force councils to sell homes will make building new properties and replacing those sold even more difficult. Such a loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending.”

The Department for Communities and Local Government (DCLG) said the government was prepared to take action to ensure replacement homes were built.

It said: “We’re committed to building the homes this country needs and investing £8bn to build 400,000 more affordable homes. There is a rolling three-year deadline for local authorities to deliver an additional affordable home and so far they have delivered well within their sales profile.

“However, we have always been clear that if local authorities don’t start building replacement homes within the three-year deadline, then we will step in and build them for them.”

Around 40% of council flats sold through right to buy are thought to be owned by property investors now and are likely to be rented out at market rates. Some local authorities have attempted to stave off sales of social housing with new schemes for tenants. Recently, Barking and Dagenham council said it would allow tenants to buy a stake in their homes but would retain a share in each property.