Housing and Planning Bill

Written evidence submitted by Araba Taylor (HPB 44)

1. I write as a barrister in private practice with professional experience of housing and homelessness cases and as a deputy district judge who hears possession and other housing claims.

2. I also write as a former trustee for a charity for the young, single homeless, which provided housing services such as supported housing, supported lodgings and housing/homelessness advice to young people under 25; and which also worked closely with a local youth development charity, focused on helping NEETs.

3. I have also devised and delivered CPD courses for legal and other housing professionals on behalf of Shelter Training.

4. I also have an interest in the Bill through having had personal experience of social housing, private sector renting and home ownership.

Suggested amendments

5. Clauses 56 and 57

5.1 That the powers referred to should be stated in primary legislation, not left to secondary legislation or industry agreements. Right to Buy (‘RTB’) is an established feature of public and social housing. It is also controversial. If it is being extended, the terms on which this is being done should be subject to full Parliamentary scrutiny.

5.2 That once the new provisions are in force, they should be easy to locate, for social housing tenants, employees and advisers, bearing in mind that these are often not qualified lawyers. Location of the relevant provisions would be better on the face of the statute than hidden away in secondary legislation, private agreements and the decisions of a Regulator.

5.3 The precise way in which the extension of the RTB is to be implemented is key to how it will work in the real world and, in particular, its ability to balance the competing rights and interests of the various stakeholders.

5.4 In particular, Parliament ought to have an opportunity to debate the following matters and data needs to be provided by Ministers on:-

5.4.1 The extent to which RTB achieves the stated policy end of increasing home ownership. Data as to ownership 5, 10 and 15 years after the RTB has been exercised should be debated; and specifically,

5.4.2 The extent to which RTB properties remain owner-occupied should be stated, as it is generally known that a high percentage end up being re-let and have therefore simply moved from the social/public housing sector to the private sector: see e.g.,

http://www.independent.co.uk/news/uk/home-news/right-to-buy-40-of-homes-sold-under-government-scheme-are-being-let-out-privately-10454796.html; and http://www.cambridge-news.co.uk/Cambridge-right-buy-scandal-half-sold-council/story-26831176-detail/story.html;

5.4.3 How much public money is available to fund the RTB, supported by full costings and details of affordability and the source of the funds, especially if it is to be fully-funded by social landlords;

5.4.4 Why the interests of all stakeholders are better served by extending the RTB than by using the available funds to extend the current system of the tenants’ Cash Incentive Scheme. This enables grants to be made to enable tenants to buy a property on the open market, leaving their social housing property in that sector and available to other vulnerable, unemployed or low-paid people: see

http://england.shelter.org.uk/get_advice/social_housing/buying_your_home/cash_incentive_schemes;

5.4.5 The percentage of social housing tenants who are likely to be able to exercise the RTB (15-35% according to the NHF Research in the Impact Assessment). This should be broken down by region;

5.4.6 The extent to which the replacement affordable homes are likely to be within the means of social housing tenants;

5.4.7 How far affordable homes will meet the original aims of the philanthropists, like William Sutton and Charles Booth, of dispersing the poor amongst the more affluent, to minimise the negative social effects of the poor all being housed in one area: see

http://www.bigissue.com/features/4973/what-the-victorians-can-teach-us-about-social-housing;

5.4.8 The effect of RTB on the financial position of social landlords, having regard to the 1% rent reduction which is already adversely affecting their income and leading to cuts and redundancies: see

http://www.insidehousing.co.uk/landlords-consider-cuts-of-up-to-25/7012478.article.

Data on this issue is of particular importance as, by contrast with private landlords, social landlords build houses, of which this country is in desperate need.

5.4.9 The effect on jobs in the social housing sector, particularly having regard to the Government’s policy of supporting ‘hardworking families’; and the extent to which job losses can be said to be a price worth paying, if the RTB cannot be widely exercised;

5.4.10 The effect on the sector’s ability to provide other services, such as youth training, volunteering and so on;

5.4.11 How social tenants are to be assisted to make the transition to being home owners including

(i) money management in relation to mortgages;

(ii) assuming responsibility for maintenance and repair;

(iii) advice in relation to service charges

http://hoa.org.uk/2015/06/bbc-you-and-yours-interview-discussing-right-to-buy/;

and

(iv) advice as to the risks associated with compulsory purchase/regeneration of housing estates; see e.g.:

http://www.fridaysmove.com/property-law-blog/tonyl/could-home-owners-regeneration-estates-could-face-compulsory-purchase-threat;

5.4.12 The extent to which a wealthy nation like the UK, with a growing economy, will remain able to provide low-cost housing for the poor;

5.4.13 The likely impact on homelessness, especially youth homelessness and child poverty;

5.5 That provisions similar to sections 7 and 8 of the original RTB law, the Housing Act 1980, should be inserted in this Chapter of the Bill. These define the discount, the scale of which is an issue that Parliament ought to debate when considering where it should be set. The cost to the landlords concerned and the effect on their finances should not be left to be debated in some other arena. Parliament should decide whether the benefit is worth the cost.

5.6 Generally, that the approach taken under previous statutes should be replicated now.

Alternative detailed provisions

5.7 That if detailed provisions are to be inserted into the primary legislation, some or all of the following should be considered. The aim would be to put in place a scheme which would mitigate some of the known worst consequences of RTB and achieve more of the Government’s professed aims, including a ‘one-nation’ Britain, encouragement for hardworking families and the promotion of longterm home ownership:

Take eligibility back to 5 years’ occupation, not 3 as at present;

Extend the post-purchase occupancy period, which could promote long-term home ownership and delay acquisition by developers and SRB scheme providers – again 5 years might be better than 3;

Keep the RTB discount in line with the maximum grant available under the tenants’ Cash Incentive Scheme (promotes equality), instead of the rumoured sums/percentages, which are greatly in excess of it;

Extend the RTB only to those geographical areas where the Cash Incentive Scheme is also available;

Extend RTB to the private sector, but not to ‘consumer-landlords’. If buy-to-let landlords are in the business of letting in a substantial way, it does not seem inappropriate that in a ‘one-nation’ Britain, they too should be asked to assist in realising the aspiration of hardworking tenants’ to home ownership. Such landlords receive considerable amounts of public money by way of Housing Benefit and other tax advantages.

See e.g.: http://www.24dash.com/news/housing/2014-02-25-billions-paid-to-MPs-peers-and-royalty-in-housing-benefit (research from 2014)

and this current news story –

https://www.lettingagenttoday.co.uk/breaking-news/2015/11/spotlight-on-letting-agency-receiving-5-5m-in-housing-benefit.

Fund a proper advice service, to assist tenants to make the transition to home ownership, with full knowledge of the pitfalls as well as the advantages.

6. Clauses 74-76 -

6.1 That, although the flexibility offered by secondary legislation is necessary and welcome, some of the detail of these provisions should be spelt out in primary legislation and fully debated in Parliament. This would set out what the policy is intended to achieve and afford appropriate guidance to the Secretary of State;

6.2 That in particular, ‘high income social tenant’ should be defined and not left to the rent regulations as contemplated by Clause 75(1) and (2). Not only is it open to the Secretary of State to make regulations, but it is clearly contemplated that these will not be constant;

6.3 That the proposed thresholds for household income of £40,000 in London and £30,000 elsewhere have been set too low and that the obligation to pay a market rent should either be staggered as income increases or that a minimum figure should be prescribed which will reduce the chances of this obligation being imposed on basic rate taxpayers. This should be debated;

6.4 That levels of £30,000/£40,000 are anti-aspiration and will operate as a disincentive to hardworking social tenants to increase their income;

6.5 Generally, that these provisions do not take into account the character of many social housing tenants, who may be socially or educationally disadvantaged or who may have become eligible for social housing by reason of ill-health, relationship breakdown or some other social or economic crisis:-

6.4.1 the obligation to provide personal financial information is very broadly drawn and lacks sufficient safeguards; whilst

6.4.2 the imposition of sanctions is inappropriate for tenants who, even if they have no employment problems, may be coping with other difficulties that make it hard for them to comply;

Alternative detailed provisions

6.5 Clause 83 -

That ‘high income’ be defined for the purposes of this Chapter as it is for the ‘High Income Child Benefit Charge’ as follows:

‘High Income’ means adjusted net household income in excess of £50,000;

6.6 Clause 77

HMRC should not be given power to disclose information to social landlords without the express prior consent of the tenant in writing.

Conclusions

7. Private philanthropy in social housing is the Big Society exemplified. A Government which believes in the Big Society should commit to finding the wherewithal to support and sustain social housing. However, the proposals in this Bill, especially when coupled with the reduction in social housing rents contemplated by Clause 21 of Welfare Reform and Work Bill, are likely to be extremely, possibly irreversibly, damaging to social landlords.

8. The cost to social landlords of the Housing and Planning Bill should also be set in the context of proposed increases in the court fees payable for recovering possession.

9. Further, even if the Government does not share the aims of registered social landlords or housing associations and/or believes these to be incompatible with its current economic objectives and/or has a different definition of social housing, it should nevertheless be looking for a way to support those landlords who use their profits to build houses. Everything possible should be done to enable them to continue with this vital work.

10. If the policy is State withdrawal from the housing sector, this should be done in a orderly manner which would, at the very least, enable RSLs and HAs to resume their pre-1988 role in housing. It should not be done in a way which deprives them of the stock they have built up over the last century, even if a small proportion of this is State-funded. The scale of State funding of the private letting sector (mentioned above) makes the focus on the social housing sector appear perverse: swallowing the camel of runaway private rents, whilst straining at the gnat of low-cost, non-subsidised social rents.

11. Further, the focus on social housing, which does so much social good in addition to providing homes for rent, shared ownership and outright purchase, seems perverse if the underlying causes of the housing crisis are not also being addressed.

12. A working scheme enabling social housing tenants to become home owners already exists. It is not broken and does not require mending or replacement. The tenants’ Cash Incentive Scheme would be more affordable than RTB (if extended at the levels proposed) and would better serve the needs, rights, interests and aspirations of all those with a present or future stake in social housing.

13. A country like ours should be ashamed to say that it cannot afford to support those who provide low-cost housing for the poor. Just as individual households continue to pay for food and clothing whilst servicing a mortgage, so the State should be prepared to keep paying for essentials whilst managing the deficit, especially in a period of economic growth. Housing is an essential and those who provide secure homes to some of the most vulnerable people in our society should be funded to expand, not required to sell off their stock.

14. If they are to be required to sell off their stock, the terms on which this must be done should be stated clearly on the face of the Bill and fully debated in Parliament.

15. As for the tenants, it is precisely those whom the Government claims to support who will suffer most: the ‘hardworking families’ who will have to ‘pay to stay’ even though, where 2 or more joint tenants are concerned, they may be earning substantially less than the living wage; and ‘the most vulnerable in society’, who are being deprived of services, provided by a reduced staff.

I hope my views will make a worthwhile contribution to the Public Committee’s consideration of this Bill.

November 2015

Prepared 17th November 2015