Housing and Planning Bill

Written evidence submitted by Peabody (HPB 125)

Housing and Planning Bill

1. Introduction

1.1. Peabody was established in 1862 by the American banker and philanthropist, George Peabody. Our mission is ‘to make London a city of opportunity for all by ensuring that as many people as possible have a good home, a real sense of purpose and a strong feeling of belonging.’ We work solely in London, with a presence in the majority of London boroughs. We own and manage around 27,000 homes, providing affordable housing for over 80,000 people.

General comments

1.2 We welcome the government’s focus on housing, especially the commitment to a significant increase in supply over the course of this Parliament. Peabody has ambitious development plans and we remain committed to building a mix of tenures to respond to London’s housing crisis. Last year half of our new homes were for home owners and this is likely to increase in coming years as we deliver a large number of shared ownership homes.

1.3 We are keen to ensure that changes to housing policy support our continued contribution to new housing supply. In London the biggest housing associations represent 40% of the development pipeline and with a supportive policy environment we believe that we can do more to help low income households in London to thrive.

1.4 Our submission to the Committee is focused on Part 4 of the Bill, ‘Social Housing in England’.

Right to Buy

· The Bill should clearly state that housing associations will be fully compensated for any discounts provided following implementation of the Right to Buy.

· The implementation of Right to Buy must follow the spirit of the voluntary agreement, including discretion over the sale of properties built with charitable resources.

· We welcome the proposed amendment to ensure the provision of at least two new affordable homes for the sale of each affordable home in London. This will depend on effective partnership working between central government, the Greater London Authority, London boroughs and housing associations. Homes should be provided in the same area and of the same tenure as those sold, wherever this is possible.

Reducing Regulation

· We welcome attempts to reduce social housing regulation. Such deregulation should be done in consultation with the sector.

High Income Social Tenants: Mandatory Rents

· We believe that the decision to implement market rents for high income tenants should remain voluntary. If this is to be mandatory we believe the definition of "high income" needs revisiting in recognition of high living costs in London and to bring it in line with other eligibility criteria such as for shared ownership or housing benefit.

· Registered providers should have discretion over whether to charge a market rent for tenants who fail to comply with a requirement to disclose their income.

· We believe that this policy will be inoperable without the effective sharing of data on tenants’ incomes from HMRC.

2. Implementing the Right to Buy on a Voluntary Basis/Vacant High Value Local Authority Housing

2.1. We welcome the voluntary agreement on Right to Buy from the National Housing Federation. This includes some broad circumstances where a housing association can exercise discretion to decline a sale, including homes provided ‘through charitable or public-benefit resources’. Peabody is in possession of a significant number of such homes and discretion over their sale was essential to our support for the agreement. As a voluntary deal this remains outside the scope of the legislation, however our participation will depend upon this being implemented in accordance with principles outlined in the agreement.

2.2. The voluntary agreement was made on the basis that the Government compensates housing associations for the full value of any discounts provided under Right to Buy. Other submissions to the Committee have noted the absence of this from the Bill. We recommend that section 57 of the Bill clearly states that grants made by the Greater London Authority in respect of the Right to Buy will be at ‘full market value’.

2.3. We are concerned about the potential impact of both Right to Buy and the sale of vacant high value local authority housing on the overall supply of social housing in London, where issues of affordability are particularly acute.

2.4. Peabody welcomes the amendment proposed by Zac Goldsmith MP to achieve the provision of at least two new units of affordable housing for the disposal of each unit of high value housing within the Greater London area. This amendment will be essential to ensure that the measures contained in the Bill do not work to London’s disadvantage. To be truly effective in meeting London’s housing needs, however, this amendment should further stipulate that such new affordable homes are provided in the same area and are of the same tenure as those sold, wherever this is possible.

2.5. We recognise that there are funding difficulties with replacing properties sold and this will need solutions. The government, GLA and local authorities could work together in collaboration with housing associations and other developers to help deliver additional affordable housing, for example through providing access to discounted or low cost land.

3. Reducing Regulation

3.1. We welcome the inclusion of section 73 of the Bill which proposes to reduce regulatory control over private registered providers of social housing. Such deregulation will be essential to reversing the recent reclassification of housing associations as ‘Public Non-Financial Corporations’ and will provide certainty to the sector in future.

3.2. Several options for reducing regulation were included in the voluntary agreement, including greater freedom over asset disposals, which should be considered for inclusion in the Bill. We would also welcome greater freedoms over rent setting over the long term. We recommend that efforts to reduce regulation be done in consultation with the sector to ensure this supports housing associations to contribute to increasing housing supply.

4. High Income Social Tenants: Mandatory Rents

4.1. We welcome in principle the opportunity to increase the income available for new development through this policy. We believe that the decision to implement higher rents should be voluntary, however, and housing associations should be given greater freedom and flexibility to determine rents according to our vision, mission and values.

4.2. The Bill states that regulations will be used to define "high income". We consider the initial £40,000 income threshold proposed for London to be too low and likely to create work disincentives for many typical dual earner households. We recommend that the definition of "high income" should be revisited in order to be implemented effectively in London.

4.3. We would welcome greater clarity around some of the legal and practical implications of this policy. Peabody has a significant number of secure tenants with "fair" rents which are registered by the Rent Officer, in accordance with their tenancy agreements. It is currently unclear whether the proposed introduction of this policy will apply to such tenants.

4.4. We are concerned about proposals to charge a full market rent to tenants who have failed to provide information about their household income. We have highlighted below the need for access to HMRC data to make this policy work. Charging full market rent to tenants who have failed to provide income information could affect many of our most vulnerable residents and is likely to create arrears which we will be unable to recover. We would recommend removing lines 40-41 of Section 76 of the Bill or amending these to state that such a sanction will be a matter on which individual providers have discretion.

4.5. The process underpinning this policy needs to be as simple as possible in order to be effective. In our view the introduction of higher rents will be inoperable without the effective sharing of data on tenants’ incomes from HMRC. There will of course be necessary restrictions around how HMRC data is stored and accessed by housing associations; however, we believe that this represents the only viable means by which to obtain accurate, consistent and timely data on the household incomes of our residents.

December 2015

Prepared 10th December 2015