Memorandum from Councillor Bob McCann,
Sheffield City Council (BDH 59)
1. PURPOSE
In response to a request from the Select Committee
for information about progress on Decent Homes the following information
is being submitted on the condition of private sector homes in
Sheffield and the strategy for addressing non decency. Sheffield
is a key partner in the Yorkshire and Humber regional response
to supporting financially vulnerable owner occupiers and so this
paper includes references to that regional approach.
References are made to "financially vulnerable"
households. These references are based on the definition of "vulnerable"
for the English House Condition Survey (EHCS) 2007 which
was those in receipt of means-tested or disability related benefits
or tax credits. People falling into this category are unlikely
to be able to access commercial loans to meet the costs of house
improvement or maintenance and are in need of some intervention
from Local Authorities.
2. INTRODUCTION
Our 2009 Sheffield House Condition Survey
of private homes is undergoing final quality control checks and
so the data must be regarded as indicative. Accepting this qualification,
the data from that survey is utilised in this paper. The data
shows the position in Sheffield is slightly worse than the national
average when compared to the last national English House Condition
Survey of 2007.
The Housing Health and Safety Rating System
(HHSRS) was introduced by the Housing Act 2004. It identifies
hazards in categories, with Category 1 being the most severe.
Examples include, dampness, dangerous wiring, risks of falls.
Local authorities are under a general duty of care to take appropriate
action in relation to Category 1 hazards. In 2006, the definition
of Decency was updated with HHSRS as the statutory criterion.
As a result, local authorities nationally are refocusing their
strategies and investment from achieving Decency to reducing the
number of Category 1 hazards defined by the HHSRS.
The Sheffield 2009 House Condition Survey
identifies the total coast of remedying all category 1 hazards
in private housing in Sheffield at £175 million or £63.7 million
for vulnerable households.
The indicative investment figure required in the
private sector housing in Sheffield to meet decency is now £358 million.
3. OWNER OCCUPATION
Owners are primarily responsible for looking
after their own homes, and their own investment will normally
result in improved value of the home they own. But the spread
of ownership has resulted in many owner occupiers who are on fixed
or uncertain incomes, not well off, and who, in practice, struggle
to find the money to look after their homes. The current economic
situation has also reduced the amount of disposable income that
homeowners have available to invest in their properties. In addition
there has been growth in the number of owners who do have some
wealth, in the form of equity locked up in their home, but who
cannot access it to pay for work. Often these people are elderly
and may also find it difficult to deal with the practical arrangements
involved in getting work done.
Run-down private housing is often found in concentrations
that characterise struggling neighbourhoods, where low values
mean that owners are not encouraged, or cannot provide the equity
through the property's value, to invest in their own homes.
3.1 The policy response to financially vulnerable
owner occupiers in Yorkshire and the Humber
In response to the Regulatory Reform Order,
across the region there has been a shift away from providing grants
and towards assistance by providing low cost equity release loans
products through the Regional Loans Service. This Service is administered
by Sheffield City Council on behalf of all the Yorkshire and Humber
authorities.
Each council has its own distinctive approach
tailored to the local situation, but the modern approach has certain
principle components:
— Low cost equity release loans offered
more generally to help and encourage financially vulnerable owners
to improve their homes.
— Outright grants for home owners in relatively
limited, defined circumstances. These include small emergency
grants and Disabled Facilities Grants.
— The use of enforcement powers where necessary
to require owners to carry out essential work,
— The use of other forms of public investment,
such as facelift or environmental improvements aimed at boosting
the local housing market by improving the image of the area. Sheffield
has delivered some schemes of this nature, funded by the Housing
Market renewal programme, but the imminent ending of that programme
means no further schemes are currently committed.
— More radical options such as selective
redevelopment where there is a powerful economic and housing market
case. Again, Sheffield has utilised the Housing Market Renewal
programme to carry out some of this targeted activity.
The use of enforcement powers involves "making
owners do things" and the giving of grants involves "doing
things for owners". Both have an important place but are
best used sparingly.
The shift away from policy reliance on grants
(which tended to create expectations of grant amongst owners)
can be quite a difficult change, but is well underway now. We
see low cost loans as "working with owners" more broadly—leaving
owners' responsible, and giving them choices, but offering help
where it is needed. This requires a very different set of skills
to make happen than those around the paying of grants.
Loans are much more complex financial products
than grants, and there are important regulatory issues concerned
with protecting consumers' interests. These are particularly significant
when dealing with the older or more vulnerable customer group
that councils are dealing with. As a result, it makes sense to
have the one regional centre of expertise in Sheffield, providing
ready-packaged products and services to all councils.
This strategic and practical context was recognised
by the Regional Assembly, and set out in the Regional Housing
Strategy. As a result, the Assembly supported the establishment
of the Loans Service and provided funding for the region to be
distributed through the Service. This support continues through
Local Government Yorkshire and the Humber, through the Regeneration
and Housing Board. The Board has established a Regional Private
Sector Renewal Steering Group with senior representatives from
councils and agencies across the region, chaired by the Director
of Housing from Sheffield City Council.
Further development is taking place to widen
accessibility to affordable repayment loans for essential repairs
through the Credit Union network, and link into the Financial
Inclusion agenda.
3.2 The Funding Challenge
The cost of remedying category 1 hazards
amongst financially vulnerable owner occupiers in Sheffield is
£53 million The cost of achieving decency amongst financially
vulnerable owner occupiers is £108 million.
In 2010-11, the total capital allocated from
Government Office likely to be available for loan funding through
the regional Loans Service across Yorkshire and the Humber is
expected to be less than £2 million. This will provide
less than 150 loans across the region. The allocation for
Sheffield is expected to be less than £110,000 and will
be sufficient to fund only around 10-12 loans. This will
make little impact on the 16,000 financially vulnerable owner
occupiers who occupy non decent housing in the city.
It is possible at some point in the future commercial
lenders may become willing to invest in this activity but there
is no evidence of willingness currently. Obstacles for commercial
lenders are that applicants are relatively high risk and any repayment
is deferred until the home is sold, which may be many years in
the future. In the circumstances there appears little hope of
achieving significant reduction in the number of vulnerable owner
occupier households living in non decent homes unless increased
public funding can be made available to provide more low cost
equity loans.
4. THE PRIVATE
RENTED SECTOR
There are 27,517 private rented homes in
the city. Of these:
— 10,005 are occupied by financially
vulnerable tenants.
— 4,044 of the non decent are occupied
by financially vulnerable households.
The cost to remedy all category 1 hazards
is £32.8 million.
The cost to remedy non decency is £63.6 million.
Responsibility for meeting both of the above
costs should legitimately rest with the landlords.
The role of Sheffield City Council is to influence
landlords to carry out this investment through a mixture of encouragement,
education and enforcement. We adopt a mixture of pro-active and
reactive activity.
We are able to be pro-active in our rolling
programme of inspection of the 1,500 licensed "houses
in multiple occupation" Our response to problems in other
private rented homes is generally reactive, in that we respond
on receipt of a complaint from a tenant. We are unable to resource
a rolling programme of routinely inspecting all private rented
homes to identify category 1 hazards and non decency.
We respond to around 400 requests for service
from private tenants per annum. Around 95% of these result in
a property inspection. In 2008-09 we served 301 notices,
including informal letters, to enforce standards.
Over 300 landlords, owning a total of 1,000 properties,
have voluntarily signed up to our Responsible Landlord accreditation
scheme. .In conjunction with Hallam University we run a "Landlords
for Excellence" course twice a year for 12 nights which
amongst other things makes landlords fully aware of their legal
obligations to maintain homes to a fit and proper standard. Increasingly,
we are utilising private sector properties to assist us with meeting
our statutory housing duty. It is essential, therefore, that we
promote the improvement of private rented sector properties.
5. AFFORDABLE
WARMTH
Our Affordable Warmth project, launched in March
2009, aims to offer completely free cavity wall and loft insulation
to all private households (ie without means-testing). This will
significantly reduce both fuel poverty and carbon emissions. According
to research carried out by Warm Zones limited, this approach is
securing around three times the take up of measures than where
there is only a "discounted price scheme. The approach is
to focus on one Council Ward at a time and in that location to
carry out intensive publicity and home visiting to maximise sign
up. The initial programme is two years of activity with financial
support from Scottish Power. At the end of that period it is the
intention to seek additional Carbon Emissions Reduction Target
(CERT) funding to allow a further three years of delivery to complete
installation across the city.
CERT funding for the scheme is being provided
by Scottish Power, with the balance of the scheme's costs covered
by the Council's Housing Capital Programme, grant from the Housing
Market Renewal programme and additional revenue support from Sheffield
City Council's Area Based Grant
Targets for the first two years are:
6. SUMMARY
FOR PRIVATE
SECTOR IN
SHEFFIELD
CONCLUSIONS
Our 2009 House Condition Survey, albeit
indicative at the moment, demonstrates there is still a significant
issue with Decency in the Private Sector. Furthermore, the introduction
of our duty to address Category 1 hazards in the home places
an additional focus for already limited resources.
27 November 2009
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