Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

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.


  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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