Communities and Local Government CommitteeWritten evidence submitted by the Kirklees Private Landlords Association

A REPRESENTATION 5 NOVEMBER 20 INTO THE “PRIVATELY RENTED SECTOR” RE: HOUSING BENEFIT ANOMALIES FOR THE CONSIDERATION OF THE INVESTIGATIONS COMMITTEE

Rationale

The cornerstone of this coalition Government’s Social Housing Policy is built on the words of the Deputy Prime-Minister Nick Clegg MP, when addressing his party at their annual conference during September 2011, together with other Cabinet Ministers “reiterating” their policies were designed “to protect the vulnerable and the poor”, with “FAIRNESS being at the heart of such Welfare Benefit changes when dealing with the General Public! Unfortunately, this now seems like more Governmental “rhetoric” when referring to the housing plight of the Kirklees Private Landlords & Tenants that of late has become highly problematic; totally unjust; and most certainly unfair due to an “ill-devised” regulatory Housing Benefits (LHA) system introduced 1 April 2011.

Meaning this policy implementation will inevitably create further disharmony amongst our “tinder-box” Local communities and put the Private Landlord in direct conflict with the Tenant through no fault of their own! Indeed, according to “Shelter” (enc) this is already happening and thousands of these unfortunate people on Welfare Benefits are having to find money they do not have “in order to keep a roof over their heads”––by reducing the amount of food they eat, etc, etc,––a scenario in this day and age that can only be determined as totally unacceptable!

Introduction

For many years past, Landlords and Tenants have experienced mutually cohesive relations due to the intervention of “the rent service”––now the “Valuations Office Agency” (VOA). This has meant a service like their pamphlet intimates “Working together with other Professionals” thus giving an independent and impartial service to the UK.

However, since 1 April 2011 “new” Government regulations have meant this service has changed their valuations criterion for “Local Housing Allowance” (LHA) purposes and their rental valuations can only be described as “no longer fit for purpose” This has occurred due to the adoption of the 30th “percentile” calculation apparently forced upon them by central Government! And thus the system of ascertaining “a fair rent” becomes totally into disrepute, the (VOA) no longer reflecting it’s “Charter of Independence” given by previous Government’s! Hence “condemnation” of the present system is widespread throughout the Landlord’s community, and relations between the (VOA) and the Kirklees Private Landlords Association (KPLA) are markedly deteriorating as a result.

Indeed, the current scheme discriminates against those seeking (LHA -formerly Housing Benefit) as quite clearly Private Landlords have no wish to see their rents effectively reduced under the present scheme, or have “the red tape” that surrounds such lettings. This at a time when associated costs of renting properties, such as Insurances; property maintenance and other considerations have over recent years gone through the roof!”.

A CASE-STUDYPrivate & Confidential

For reasons of anonymity, this paper will hide the name of the person involved in this TRUE LIFE “Case-Study”, and will no doubt be one of thousands within the County of Yorkshire, so let us call her “Mrs H” Nevertheless, the facts and figures are a true account of her past/present circumstances and accurately record matters (enc) Moreover, the facts are simple to evaluate and hence the effective “reduction” in Housing Benefits (LHA) is totally unacceptable and cannot be defended OR justified as “FAIR” Re-iterating, “Mrs H” is one of thousands classed as the “vulnerable and poor” who has brought up her child as a single parent WORKING 11 hours/week in order to preserve her personal dignity & economic survival, but unfortunately this individual’s “social progress” is now at serious Governmental risk!

Background

“Mrs H” [***]1 is a Tenant of A & J Property Services Co, who like her predecessor took up residence in 2006 after a period of “homelessness” through no fault of her own. This person was a divorcee with one child then aged 8–9 years, had relatively nothing but the clothes on her back, and only formed a home with the help of her nearby parents and of course the generosity of her Local Landlord!

Because Mrs H could not afford the £250 Bond required, “Kirklees Social Services” provided such monies and after character references, it was decided to grant her a six-month tenancy but only on a probationary basis! Moreover, because of the mental trauma experienced by Mrs H (the Tenant) she was pleased to live 200 meters away from her parents home and needed the help & support both mentally and otherwise to overcome this most distressing period in her life! Hence it was decided by the Landlord the x2 bedroom rent of £103.85p/wk would be applicable noting this client is NOT under the (LHA) rules but the old “Housing Benefit” scheme that apparently will end 2012 with nine months “notice” given by Kirklees Council/the coalition Government of her reduction in Housing Benefit allowance.

Indeed, Mrs H contributes to the community by working at “Colne Valley High School” (11hrs/wk) receives a payment from her ex-husband for her child; and still receives moral/physical support from her family nearby! Hence it would be totally unacceptable both morally or otherwise “TO EVICT” this person again into a homeless society, given that she has been an excellent Tenant; re-integrated herself into the community; AND fully appreciates her son growing up in the excellent surroundings of the Colne Valley! Notwithstanding the current housing situation and that portrayed by the homeless group “Shelter” (enc) where another £8.85p/wk would then become payable by herself!

Past Housing Rental Rates

The property in July 2002 attracted a rent under a former Housing Benefit tenant (Mrs C) of £80/wk––again with very similar family circumstances of one child––a divorcee.

The “New” Broad Rental Market Area (BRMA)“Colne Valley” (HD) Rates

Under these ill-devised and social divisive policies, “Mrs H” will have to find AN EXTRA £8.85p/wk––after her nine months grace! Hence the current valuation set by “the rent officer” (VOA) would fall from the current £103.85p/wk (October 2011) to £95 hereafter! Needless to say the Kirklees Private Landlords Association (KPLA) are “appalled” by the coalition Government’s actions in regulating downwards “fair and economical” rents within the Colne Valley district of Kirklees without ANY meaningful consultation!

The Landlords Dilemma

Therefore after five to six years of social re-integration “Mrs H” now faces a significant “reduction” in other household necessities ie food; electricity/gas etc. With A & J Property Services Co (IF THE RENT IS NOT MET) having no alternative but to EITHER Terminate Mrs H’s tenancy––after her nine months (LHA) “grace” OR re-rent to a “suitable” private housing Tenant OR indeed sell the property! Meanwhile, where is the social accountability & compassion shown by a Government who seem “totally out of touch” with the real world and are increasingly seeing Public disquiet over their controversial policies? How on earth can Mrs H obtain a further £8.85p/wk in order to stay in her present home OR indeed any other (LHA) client? Therefore the situation is a no-win/no-win situation and the present (LHA) Government devised scheme is badly failing the British Public!

Indeed, this individual is already working the maximum she can under her present circumstances; bringing up a child on her own; and is now paying her own way in society––and what are the Government trying to do? It seems to ensure Mrs H goes firmly back to square one! Needless to say this Case-Study alone is totally un-acceptable to either the Landlord OR the Tenant and the “safeguards” preventing such have been ignored!

In reference to the (LHA) Housing Benefit “rent appeals” in such cases as Mrs H, it appears from intimation that Kirklees Council currently administer such themselves and stick to the Government’s rules/guidelines; therefore an “Independent Housing Assessment” MUST be the only fair and decent way of quantifying this individuals case! Perhaps further matters for Governmental consideration and consultation into the “Universal Credit” scenario OR face possible legal intervention by thousands of claimants who may instigate yet another “Judicial Review” by those who feel their human rights have been violated!

WHY the rent officers (VOA) valuations are fundamentally flawed within the present Local Housing Allowance (LHA) scheme.

Preamble

Since the formation of “the rent service” now the Valuation Office Agency (VOA) and working in association with Local Authorities and the Kirklees Private Landlords, the emphasis has always been on fairness; co-operation; and conciliation being the cornerstone of this Government department’s culture! The “Working Together” leaflet clearly states “the trust” factor and the working relationships that have occurred over many years when ensuring “value for money” and the correct levels of remuneration being applicable to both the individual Tenant and the property Landlord! However, this former “harmonious” relationship is now IN DANGER OF TOTAL COLLAPSE; with all Private Landlord “trust” having evaporated when obtaining “a fair rent” for their properties due to the adoption of the (LHA) 30th “percentile” from 1 April 2011, and of course the (BRMA) rental anomalies themselves! Therefore due to these errors, the Kirklees Private Landlords’ Association (KPLA) require an immediate re-appraisal of the (VOA’s) activities, as the adopted methodology is fundamentally flawed (outlined below) Hence “the formulae” does not represent a “true and accurate” picture of current rental market values within Kirklees! Needless to say a copy of this paper has been forwarded to the (VOA) Liverpool Office and let us hope their Managers “reiterate” to the appropriate Government Dept the comments made on behalf of the KPLA! At this juncture “we” wish to make clear that our information was obtained from a Senior Kirklees Policy Manager, in that Central Government was to blame for this upheaval and not the (VOA) itself!

Example of reduction in x two bedroom property with “the Tenant” justifying the bedroom––dependant on the number of children (normally 11+ years of age)

Kirklees Housing Benefit Rates (1 July 2008)
2 Bedroom Property Rate £103.85p/wk
3 Bedroom property Rate £114.20p/wk

Kirklees (LHA) under BRMA (1 July 2011)
Shared Accommodation Rate £55/wk
1 Bedroom Rate £76.15p/wk
2 Bedroom Rate £95/wk
3 Bedroom Rate £114.23p/wk
4 Bedroom rate £144.23p/wk nb a reduction of £8.85p/wk––two bedroom property.

From the figures above (enc) it can be immediately seen “the rent officers” valuations have remained “static” over a period of four to five years, which in it-self must be considered strange when considering Kirklees property prices have substantially increased! Notwithstanding the additional financial requirements of letting a property out, hence Kirklees Private Landlords now face the dilemma of a substantive “decrease” in revenues and perhaps many will go out of business when the rewards of housing investment are no longer viable to continue!

Matters of ConcernIncorrect Local Property Valuations

1. How on earth can the Valuations Office Agency (VOA) “justify” the rents under the Broad Rental Market Assessment (BRMA) are the same throughout the postcode of HD?? (Huddersfield) This means that a two to three bedroom property in say the “unattractive” districts of Deighton/Sheepbridge/Lowerhouses or Walepole of Crosland Moor attract EXACTLY the same rental valuations as within the Colne Valley and the “desirable” Villages of Honley/Holmfirth/Slaithwaite/Meltham/Outlane etc where many (LHA) clients have lived throughout their working life! In the past “the rent officer” has worked out the Local Housing Allowance (LHA) OR valuations on an actual site visit OR the “Post-codes” for that area! Local Private Landlords consider this alone as “misleading” and totally unfair when assessing what can only be determined as “a fair” economical rent!

2. How can these “flawed” valuations be determined as both fair to the Landlord/Tenant? Thus, are we saying the valuations office (VOA) have got this seriously wrong due to the Governments/the (BRMA) criterion they are currently using? Indeed, how can a semi-detached property valuation in say the picturesque Village of “Honley” be the EXACT same rent/valuation as one in Deighton? (Huddersfield East) Indeed, these would be “fantasy” valuations as we are fully aware properties within the “Colne Valley” Post-codes attract a far higher rental AND are up to 30% more to purchase on the open property market!

3. Kirklees Private Landlords over a four to five year period have already taken “a massive hit” with the introduction of the (LHA) alone; with properties formerly valued at a 50th “percentile” (or mid-point) but we now see the (VOA) adopt the 30th “percentile” which can no longer be sustained as economically viable! Indeed, over the past four years (2008).

“the rent-service” has kept the rates of a x2 bedroom property at roughly £103/week and x3 bedroom at £114, whilst maintenance costs; insurance costs; boiler/heating costs and the price of the houses have substantially increased!

4. A Senior Kirklees Council representative (Policy Officer) invited to a recent (KPLA) July 2011 meeting gave a further “road-show” of the new Governmental housing policy and indicated it was hoped “the Private Sector” would take up the need for further additional housing––to which one of the Landlords attending replied; “And what exactly is the incentive to provide such for the community with the Government reducing the (LHA) Housing Benefits so savagely––at a time when you can’t get blood out of a stone?”

5. To the Kirklees Private Landlords Association (KPLA) knowledge, there has been NO consultations with “us” over these matters neither on a Local/Regional/National basis OR these Government policies would never have seen the light of day! A two hour road-show given to the Kirklees “Accredited” Landlords Feb/March 2011 cannot be seen as true Landlord participation/consultation but ONLY “a fait de comply”.

6. Are the Government aware these policies will further alienate an already “disillusioned” 2.7 million un-employed workforce; increase dissatisfaction within Local communities; create a two-tier rental market; AND most certainly with further changes to benefits may lead to MAJOR Social unrest? But is this why “Sheffield University” have been given the task of investigating “the affect” on Local communities of the proposed Welfare Benefit changes? Indeed, how on earth can a single “un-employed” person Aged 25 find a multiple occupation with a (LHA) rent of £55/wk (enc) And what have the Government now done? Increased the age limit to Age 35––that will further alienate this group of already disadvantaged—many un-employed people!

HENCE AN “URGENT” GOVERNMENT REVIEW OF HOUSING POLICY AND U-TURN IS NOW REQUIRED––ESPECIALLY IN CONSIDERATION OF THE RECENT UK CITIES “DISTASTEFUL” EVENTS OF JULY/AUGUST 2011.

ConclusionA Fair and Amicable OutcomeChanges to be Made!

The coalition Government have indicated their Public “austerity” measures and policies are deemed “fair to ALL” and DO NOT discriminate or disadvantage against the vulnerable and the poor! But quite clearly from the Case-Study (no doubt reflected by thousands of others) this statement “does not hold water” and is simply not the case!

The nemesis of the system is the reduction from the 50th to 30th “percentile” valuations applied after 1 April 2011 by the (VOA) coupled to rental valuations that do not reflect a “true and accurate” LOCAL picture! Hence to restore Landlord confidence, these anomalies must be immediately changed to their “Post-coded” locations. Moreover, Post-codes are extensively used throughout the UK to determine such factors as House Insurance and other basic services; thus giving a TRUE and ACCURATE statistical analysis within the areas in which “we” currently reside!

Indeed, these “draconian” and ill-devised housing policies have still not been extensively debated within the Private Landlord Associations, hence the social consequences will eventually become enormous! Indeed, the housing group “Shelter” has already raised serious concerns that the Private Rental Market is “Out of Control” but fails to define the exact reasons WHY (enc) Whilst the antidotal evidence clearly shows the Kirklees Private Landlords (KPLA) have already endured a four to five year “rents freeze” in relation to (LHA) Tenants, whilst associated costs have dramatically increased! Therefore is it any wonder many Kirklees Private Landlords will no longer accept (LHA) clients (and hence “Shelters” growing concerns) whilst many UK Landlord’s have now called it a day!

With regards the nine month “buffer” between the old and new (VOA) assessments becoming applicable to the (LHA) Tenants; this can only be determined as totally unfair and disadvantages (LHA) clients when seeking Private Landlord accommodation.

Hence this can only be classed as “discrimination” in a “fair & just society” in the year 2011, when on average a Housing Benefits claimant (working or not) will have to find between 10–12% more in order to pay their current rent! Of course this will vary from area to area and the “Case-Study” detailed is in respect of a x2 bedroom property in the area of Huddersfield but must relate to many other Tenants throughout the UK.

And now to re-iterate a point, when a Kirklees Council Policy spokesperson was invited to a (KPLA) meeting July 2011 who intimated; “The Council are hoping that the extra Kirklees Private Housing need will be accommodated and met through your Landlords Association” unquote. On this remark many of the Private Landlords attending “voiced their anger” to the policies intimated (enc) and then walked out of the meeting!

This led to a situation where the Officer concerned (clearly embarrassed by the protest) attempted to rescue the situation stating “Sheffield University” was to investigate “HOW” the Welfare changes would affect the Public, and a report-back to Kirklees Council would be made available.

Meanwhile the (VOA) has now been given further evidence of the (BRMA) in relation to the district of Kirklees and “we” as Private Landlords ask those Government un-informed individuals who have instigated this “human carnage” onto the Housing Benefits (LHA) system to re-visit their policies before it is too late and matters throughout the UK get considerably worse! Thereby the Government altering the 30th “percentile” back immediately to the 50th would be a step in the right direction!

Indeed the (VOA) themselves have now been given “up-to-date” Market evidence of ALL the available housing within Kirklees and “we” (the KPLA) hope the figures are now revised! Meanwhile, their Officers intimate the valuations are influenced by the 30th “percentile” due entirely to the Government’s intervention! The (KPLA) therefore have determined that the Rental valuations are fundamentally flawed for the reasons given, AND DO NOT REFLECT IN ANY WAY “Colne Valley’s” Local housing reality. Hence let us hope the Government at this late hour see Yorkshire common sense and restore “a level playing field” to this very important industry!

Therefore unless “change” is forthcoming, there may be thousands of Private (LHA) Tenants “under the threat” of eviction & homelessness, with many of the 2.7 million UK un-employed further disenchanted by the system! Meanwhile, perhaps those affected by the changes may resort to Legal intervention within the “Judicial Review” process?

But quite clearly there seems a “North/South” housing divide where in London and the home counties, hundreds of pounds/week are being paid to accommodate (LHA) clients, that has most certainly caused this Government intervention to the detriment of other areas where the Housing Benefits (LHA) system has always been relatively fair!

Finally, we enclose a copy of the “Communities & Local Government (CLG) Research” document where an item of interest identifies a matter of regulation stating “Provide a favourable regulatory environment –for Landlords and Tenants”. Therefore how do the coalition Government call a 20% “percentile decrease in the (VOA) Housing Benefit (LHA) formulae a step forward in the Landlord/Tenant Private Housing relationship by these nefarious changes to a system that directly affects the vulnerable and the poor?

Matters of Contention Revisited

(a)Government “intervention” April 2011 in the setting of (LHA) rates from a 50th “percentile” to a 30th via the (VOA)––that no longer seems an independent body!

(b)Rental valuations based on “Post-codes” instead of the (BRMA) give a more “true and accurate” rental-rate in the areas the property is situate.

(c)An “independent” scheme of (LHA) APPEAL, Local Authorities can no longer be classed as “impartial” due to their austerity commitments enforced by central Government.

Thank you for your inquiry into ALL aspects of the Private Rental Market, which MUST include the current Housing Benefit anomalies.

January 2013

1 Address redacted.

Prepared 16th July 2013