A government-designed system that is creating homelessness and forcing people to use food banks

Research published by Sheffield Hallam University on behalf of the Residential Landlord Association shows that landlords are, increasingly, refusing to let their properties to those under 35. There are a number of reasons for this, not least that the landlord might not get paid on time or at all.

32% of landlords (of the 1,996 questioned) have said that that they have actively reduced lettings to those under 35.

The situation is more acute for those under 35 in receipt of housing benefit or universal credit. Two-thirds of landlords say they are unwilling to let to this group because of a higher risk of rent arrears as payments are delayed through administrative delays and payments are made to the tenant rather than direct to the landlord.

We used to have a system that almost used to work but then some idiot decided that a higher priority would be to prepare claimants for the reality of work by mirroring the conditions of those in work. He (it was a ‘he’) then introduced a system that has been so poor in its design and execution that people are becoming homeless and others reliant on food banks to survive. It takes some sort of genius to drive people into destitution because of his own arrogant, self-belief.

I’m not going to name this person. Choose any name. It could be Iain, perhaps Duncan, or even Mr Smith. Whatever works for you.

Alan Ward, chair of the Residents Landlord Association, said: “We have already held constructive talks with the Government about this and we will keep the situation under review, but there is a need for policymakers to engage further with landlords to consider what more action can be taken to address this decline. Without this many under-35s are likely to struggle to access any accommodation” (my emphasis)

So where will those under 35 live? I challenge any of my Conservative friends, and I have quite a few, to tell me.

And while they are about it, will they say, hand on heart, that they are proud of what the welfare reform agenda is delivering, that it is a strong and stable system…..

And please don’t come up with the twaddle about rescuing the economy crashed by the former government or that there is no magic money tree. There is money there. There wasn’t a problem when the government needed £1 billion for its friends in the DUP.

One simple measure the government could do, and it will cost next to nothing, is to continue making payments direct to landlords. That might, just might, improve confidence.

Sex-for-accommodation and denying housing benefit to 18-21 year olds

BBC South East has done a great public service by uncovering the sex-for-rent scandal where young people are asked to provide sexual ‘favours’ in return for accommodation. The report on tonight’s programme (13th April) shows the need for a change in the law as this arrangement is not illegal.

Demanding sex for accommodation has not been an uncommon reality for homeless people for many years.

Earlier this month the government withdrew the automatic right of young people aged 18 to 21 to claim housing benefit. While there are some exemptions, up to 11,000 are expected to be affected over the next few years.

That seems like a sensible policy in light of tonight’s exposure ….! What do politicians think young people will do if they can’t get help towards their housing costs?

11,000 18 to 21 year olds lose the right to claim housing benefit

Since Monday, those under 21 have lost the automatic right to claim housing benefit when making new claims.  It is estimated that 1,000 will be affected this year and up to 11,000 by 2020/21.

The government expects to save £105m with the cut through the life of this parliament, with set-up costs of £5m and running costs estimated at between £0.5m and £1m per year.

I have previously referred to research by Heriott Watt University that calculated that once exceptions and costs incurred on other public services were taken into account, the policy could save just £3.3 million a year.  If just 140 young people end up on the streets, the additional cost to other services (ambulance service, NHS, housing departments, police, etc.) then this measure will actually be a drain on public finances!

In Wednesday’s Argus (5th April 2017), I was quoted as saying: “Desperate times for young people will see them return to unsafe family situations, turn to crime and prostitution, and end up sleeping rough.

“For most 18 to 21-year-olds life is a big adventure but for those on the streets it can turn into the worst of all nightmares. They have hopes and aspirations but if you are on the streets it is a day to day struggle for survival.”

This policy makes no sense in economic on humanitarian grounds.

7,585 families have their weekly housing benefit cut to just 50p per week

Housing Benefit was introduced many years ago to help people who were struggling to pay their rents.  More now than ever before is it needed, as house prices spiral out of control.  More than 90% of new claims for housing benefit in recent years have been made by people in low paid employment.

But rather than tackle the crisis of supply and affordability, a cap has been imposed on how much benefit can be claimed, and the first thing to go is the financial support towards rents.

A Panorama survey has found that thousands of families hit by the benefit cap have been left with just 50p a week towards their rent, and that 7,585 families had had their weekly housing benefit cut to this level.

The cap has been reduced to £23,000 per annum for a household in London and £20,000 in the rest of the country. For a single person it is much less, £15,410 a year in London, £13,400 elsewhere.  The average annual rent for a one bed flat in Brighton is £11,652.

The amount of money above the limit is taken from housing benefit or Universal Credit.

I always try to make a comment at the end of a post like this, but I think that this situation speaks for itself, and the consequences are obvious if someone simply gets just 50p per week towards their rent.

Housing in Hastings: Difficulty in accessing the private rented sector

(This is the second in five posts regarding housing in Hastings based on a briefing paper prepared by my colleague Sue Hennell. Yesterday I wrote about Universal credit and how the six week wait for the first payment was causing problems for people trying to get accommodation in the private rented sector)

There are a number of reasons why there is more difficulty in accessing private rented accommodation in Hastings at this time.

The Local Housing Allowance Levels have not kept pace with rent increases:  The average monthly rent for a single room in a shared house in Hastings is £360 per calendar month and the Local Housing Allowance is £279, the shortfall per month is £81. For a tenant who is in receipt of Job Seekers Allowance at the rate of £57.90 (under 25s) or £73.10 (over 25s) per week this would mean using £18.69 per week to just cover their rent.  For a one bed room flat, the average rent is £426 per calendar month and the Local Housing Allowance is £368.20, the shortfall being £57.80 per month.  It is the same for families:

Number of bedrooms

Local Housing Allowance Average rent price in Hastings* Median rent price in Hastings*

2 bed

£521.26 £738.00 £693.00
3 bed £693.12 £890.00

£850.00

4 bed £847.69 £1,009.00

£936.00

*taken from Hastings Market Rent Summary (home.co.uk)

Reluctance to house people on benefits: Private sector landlords have always been reluctant to take tenants in receipt of Local Housing Allowance but it would appear they are even more reluctant with housing costs payments under Universal Credit. BHT’s Housing Access Project undertook a ‘secret shopping’ exercise with 25 local letting agents in Hastings in August 2016 and 75% said that they would not take on tenants in receipt of the Local Housing Allowance (this was before the full roll out of Universal Credit)  and the rest responded that they might possibly do so.

Rent in advance: Those private sector landlords that will take tenants in receipt of the above benefits require rent in advance, 6 weeks rent in advance, deposits, guarantors and fees. Whilst it is possible to get the rent in advance and deposit for one month via different routes (e.g. Hastings Borough Council) the 6 weeks rent in advance and access to guarantors is more difficult for people who are poor and/or claiming benefits.

Rental increases following welcomed improvements: Hastings introduced selective licensing for certain areas in order to address poor standards of housing. Whilst this is really good news some private sector landlord cannot afford to upgrade their properties so have pulled out of the market and where properties have been renovated rents have increased.

The question I asked yesterday was where will people live if social housing is not keeping up with need and private landlords are less willing to rent to claimants? I add a further point today: where will people live if they simply cannot afford the high cost of rents?

We are a nation in the midst of the worst housing crisis in living memory, if not ever. And it will only get worse.

If you are facing eviction due to rent arrears, get advice early from one of BHT’s Advice Centres in Hastings, Eastbourne and Brighton, the CAB or another advice centre.

Here are details of the BHT Advice Centres:

Brighton

Eastbourne

Hastings

The economic case for investing in social homes for rent

building-new-social-rent-homesA report just published by the think tank, Capital Economics, commissioned by a range of organisations including of the Local Government Association and the fantastic campaign group Social Housing Under Threat (SHOUT), has reported that if the government was to invest in 100,000 new social rented homes a year, it would generate savings to the public purse of between £102 billion and £319 billion over a 50 year period.  Click here for the full report.

The report allows for differing economic performance post Brexit, hence the difference in the projected savings.

The reason for these savings is because people claiming housing benefit would be paying lower rents in social housing than the more expensive and ever increasing rents in the private rented sector.

What the report does not comment on is the impact of these savings should these new homes be subject to the Right to Buy. Around 40% of former council houses are now ending up in the private rented sector, with rents three to four times those of the rents charged by councils.

The evidence provided by Capital Economics is basic common sense and offers compelling economic logic. It makes it all the more bewildering that in the government’s latest funding announcements for 2016 to 2021 nothing is allowed for social rented housing. It is all going on initiatives such as Starter Homes and much attention, time and effort has been focused on extending the Right to Buy to housing associations.

What Capital Economics did not assess are the additional savings to health, education, etc. that other research has shown is derived from the provision of good quality and affordable social housing.

Perhaps someone could explain to me just why housing policy is so wedded to policies that benefit the few and make no economic sense. I just don’t get it.

The Government has announced its plans for supported housing – some positives, many worries

For the better part of a year I have been blogging on a regular basis about the threat to specialist supported housing services posed by the government’s announcement to cap rents to the maximum paid through the Local Housing Allowance (LHA). See here, here and here, for some examples.

BHT featured in a special report on Channel 4 News highlighting our concerns. Almost every other provider of specialist supported housing has also expressed their concern. The National Housing Federation launched a campaign in the summer to save supported housing.

The scale of the problem was recognised recently by Theresa May in response to a question from Jeremy Corbyn relating to the risk that the cap poses to women’s refuge services.

Last week the government announced its plans for the future funding of supported housing services. While there is some temporary relief, the risk remains of serious concern.

Rather than imposing the cap from April 2018, it is now scheduled to be imposed from April 2019.

damian-green

Rt Hon Damian Green MP

This, according to the Cabinet Minister, Damian Green MP, is to allow time for the details of the new future funding regime to be worked out and arrangements to be put in place.

Yet the government still intends to proceed with a 1% rent reduction for three years from April 2017.

There seems to be a certain lack of logic here. On the one hand the government is not implementing the LHA cap because it has heard concerns about the risk to the financial viability of specialist supported housing yet at the same time it is cutting income.

(It is worth remembering that the 1% reduction was a U-turn on a previous commitment by government made as recently as 2014 to allow increases in rents by CPI +1%).

It appears that the government intends that rent and service charges in specialist supported housing will be funded through housing benefit or universal credit up to the LHA rate.

To make up the shortfall, top up funding will be made available to local authorities and this will be ring fenced for support housing. Ring fencing is to be welcomed although there used to be ring fenced funding for supported housing as part of the old Supporting People regime but the government removed it a few years ago (2013 I think). As a consequence, warnings over the loss of funding for supported housing came true.

The government provides an assurance that there will be no loss of overall funding compared to current expenditure, But my serious concern is that the value of funding being made available to local authorities will be eroded in future years. Will it, for example, be indexed linked? And if LHA is frozen in the future, will the local pots be increased correspondingly or will there be an overall contraction in the amounts being committed by government?

Then there is the administrative costs associated with creating two systems from one. Currently it is all administered through housing benefit.  From 2019 local authorities will have to have additional staff in place to administer the local pots.  Where is the efficiency in that?  And who will pay for this additional, unnecessary cost?

Currently the funding is made available on a national basis. However, in the future, with the funding going to local authorities, will more mobile groups such as rough sleepers, ex-offenders and victims of domestic violence lose out if local connection rules become tighter, as I am sure they will?

One positive feature is the announcement that the Shared Accommodation Rate will not apply to people living in the supported housing sector which (if I understand it correctly) means that some of our specialist supported accommodation that would have been unaffordable for those under 35 will no longer be out of their reach. Unfortunately, the same exemption will not apply to our non-supported housing, resulting in many of our homes being beyond the reach of those under 35 who will remain eligible for rooms in shared houses only.

The devil will be in the detail. I’m not completely disheartened at this stage, but there are inherent risks in the limited detail that has been made available so far.

While there are some things to welcome in the announcement, there are many things that still cause me concern.  At least, I think, the government has heard the concerns BHT and others have expressed.