Memorandum by Mr Trevor Hankins, Chair
of London Federation Guinness Trust Tenants & Residents Associations
(AH 71)
First of all I would like to thank you for this
opportunity of being able to put forward the views of the London
Federation.
Firstly I must give you a brief history of the
lack of opportunity Guinness Trust tenants have faced on the issue
of affordable home ownership over the last 25 years.
As you will be aware the Right to Buy was introduced
in October 1980. The Guinness Trust being deemed to be "charitable"
were given the discretion by the then Conservative Government
to not sell their properties under Right to Buy legislation. This
being so has meant that Guinness Trust tenants have been at a
real disadvantage on the issue of affordable home ownership. Times
have changed dramatically since the Trust was formed in the late
19th century when indeed its aims were correct and indeed charitable
but the Trust had not moved forward with the times up until Simon
Dow took the position of chief executive of the Trust and saw
mixed tenure as the way forward, but the case still remains hard
working Trust tenants have been neglected on the issue of affordable
home ownership for 25 years. We believe an open discussion is
needed urgently on this issue. In many areas, Trust tenants pay
higher rents than Local Authority tenants, they also pay higher
service charges. In real terms, many Trust tenants believe the
Trust is not charitable in practice.
We know the Trust is a non-profit organisation
and the revenue they receive from rents are put back into building
new properties and the repair and maintenance of existing properties
but this in real terms does not mean they are charitable to their
tenants.
When Government talk of the public private partnership
in housing they must realise that a percentage of Trust tenants'
rents is put into new build properties but in practice these tenants
have no chance of being housed in said properties because the
local authority where these properties are being built demand
100% first nomination rights. So you have disadvantaged tenants
paying for new build properties they have no chance of moving
into. The Trust tenant loses out again. New tenants of the Trust
could read this letter and think what is the problem as they could
be living in new build properties or in ex-local authority properties
being rebuilt or refurbished by the Trust under stock transfer.
Also, if these properties were built after April 1997 with the
help of tax payers' money, these new tenants would have the right
to purchase their property under Right to Acquire legislation
or the preserved Right to Buy. These new tenants have been given
more rights than tenants living in Trust properties for many many
years. So the Trust also has different rules for different tenants.
We believe this inequality must change.
The report of the Law Commission "Renting
Homes" to Parliament identified the inequality of rights
between social housing tenants and has recommended that they be
addressed through forthcoming legislation.
THE POTENTIAL
BENEFITS OF
AND SCOPE
TO PROMOTE
GREATER HOME
OWNERSHIP/THE
EXTENT OF
WHICH HOME
OWNERSHIP TACKLES
SOCIAL AND
ECONOMIC INEQUALITIES
AND REDUCES
POVERTY
We believe the potential benefits of affordable
home ownership are enormous.
It will benefit the community and the surrounding
area, it will help combat anti-social behaviour and crime. People
who own their own home want their area to be better, they will
not just turn a blind eye and shut their door to anti-social behaviour
and crimes. We are not saying all people that rent do not care
about their areas and we are not saying all people that rent turn
a blind eye to anti-social behaviour and crime but we must be
realistic about this. People who have a financial investment in
their property, their area and their community will take more
care of it. When we talk about poverty to rent all your life and
have nothing at the end of it does not make financial sense. This
is a cycle of poverty because you have nothing to leave your children
and your grandchildren. We believe giving real affordable home
ownership can break the culture of renting that in itself creates
poverty. Surely Governments vision should be to help people break
out of this cycle. If this cycle was broken then less people would
need social housing.
We believe mixed tenure is the way forward.
To make mixed tenure work is not just to build private housing
in areas where there is deprivation but to give the people that
live in these areas the real opportunity of affordable home ownership.
The present discount of £16,000 is totally unrealistic Government
must give people who have the aspirations of affordable home ownership
this opportunity. With the average house price in London at £300,000
these discounts are derogatory and out of date. If Government
really wants to give people affordable home ownership the discounts
it gives must be realistic and in comparison to today's house
prices. What must be remembered is the discounts given today will
be the benefits saved tomorrow. Many social tenants that work
all their life will still claim some form of benefit towards their
rents and council tax in their retirement. When calculating discounts
Government should look at the tenant's length of tenancy with
their landlord and make discounts accordingly.
The London Federation carried out a survey of
seven estates in London asking "If discounts were made affordable
would you like the choice to buy your property?". 53% of
tenants answered and 90% said they would like to take the opportunity
to buy.
We are aware of the concerns some people have
regarding the selling of social housing, we also share these concerns,
but if a percentage of the receipts gained by such sales is put
back into building more social housing this should minimise the
loss.
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