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.

Rent the empty homes of the rich and super rich in Kensington and Chelsea to people in housing need

Across the country, the number of homes left empty for six months or more is falling, down by a third between 20116 and 2016 across England and down by half in London over the same period.

The one area bucking this trend is Kensington and Chelsea, the Borough that includes Grenfell Tower.

Powers have existed since 2013 to allow councils to charge a premium of 50% on council tax for properties that have been left vacant for two years or more. According to the Guardian, a Band H property in Kensington and Chelsea, the surcharge would be £1,000 in 2017/18.

But for the rich and super rich of the Royal Borough of Kensington and Chelsea, to give it its proper name, £1,000 is small change when it comes to the increasing value of their asset (note: not home). In the ten years to October 2016, according to Land Registry data, the value of homes in the Borough has increased on average by £5,000 per month! What difference is £1,000 per year?

This is just another sign of how rotten the housing market has become in the country, and how rotten the ‘Royal Borough’ is.

I have two suggestions:

Why not give local councils the powers to acquisition properties left empty for more than 12 months for a minimum ten years so that they can be let to households in housing need, including those displaced by the tragic fire at Grenfell Tower.

Of course compensate the owners. I would suggest that the rents and compensation be capped at Local Housing Allowance levels (see footnote). The government is using that as the measure to cap specialist supported housing. Why use LHA. According to the DWP it is a suitable measure because “The one advantage of (LHA rates) is that they are already there, so it doesn’t cost government anything to set it up” (see my post Is this the most depressing, mind-boggling, ridiculous justification ever from government?).

The other suggestion I have is to strip the Rotten Borough of Kensington and Chelsea of its ‘Royal Borough’ status. Will that achieve anything? Absolutely not, but would make a lot of us feel a little bit better.

(Footnote: LHA was originally introduced to cap the amount of housing benefit that would be paid to welfare benefit claimants who rented in the private rented sector. The figure was supposed to equate to the 30th centile of rents for properties in a locality but it has been frozen for a number of years and now equates to the bottom 5 to 10 centile).

Is it going to be business as usual in housing after the Grenfell Tower fire?

What is the secret of great (timing) comedy? goes the old joke. It works better live than in writing, and it was never actually that funny.

The comments of Paul Hackett, the chief executive of Optivo, who recently became the chair of the G15 – the 15 largest housing associations – said on the appointment of of Alok Sharma as the new housing minister, that he hoped Mr Sharma would continue the “politics of pragmatism” shown by his predecessor in the role, Gavin Barwell.

Alok Sharma MP

He said: “What we would say to Alok Sharma is that Mr Barwell did a really good job as housing minister by forming a really effective and pragmatic relationship with the Greater London Authority and with housing associations and house builders generally.

“I would very much welcome a continuation of that politics of pragmatism. I really believe that Mr Barwell was focused on what works, rather than on ideology and he also recognised the importance of players other than just the volume house builders.”

This is where timing comes in. A couple of days later there was the fire at Grenfell Tower. If anyone thinks that it will be ‘business as usual’ in politics or housing, then they have misjudged the public mood as much as Theresa May has.

Housing associations, and particularly the larger ones, are in danger of attracting the anger of the public who are looking for someone to blame for the housing crisis we are facing. Yes, the housing policies of successive governments, the banks and those who speculate in the housing market will rightly be blamed.

But housing associations themselves need to take a long hard look at themselves in a mirror. Who are they building for? What are the standards in their homes? How isolated have they become from their tenants?

The disaster at Grenfell Tower is the most extreme manifestation of what is wrong with the housing market. The level of rough sleeping, the number of children in bed and breakfast accommodation, the general failure of the housing market as a whole has now reached tipping point.

If the government survives, it cannot be business as usual in housing, although there is nothing about Alok Sharma that inspires any confidence. Barwellian Pragmatism won’t do it. There needs to be a fundamental change in the approach of government.

Housing must once again become where people live, not an investment opportunity, and the housing needs to be safe.

We need council housing, not housing associations whose priorities are stock market flotations. We need social housing, not housing products. We need social rents, not so-called affordable rents.

The government of Theresa May is anything but strong and stable, and looks somewhat weak and feeble. In her speech later today, I hope that she will see the light about housing which was largely absent from the election campaign. It should now dominate the political agenda.

Rents fall in areas of good housing supply

The housing crisis can be addressed if two key principles are addressed: supply and affordability. It is obvious, I know.

In the past I have, wrongly, called for an approach that based on ‘build, build, build’. No longer.  With the shortage of land in places like Brighton and Hove, it is what is built, and it must be affordable.

The phrase ‘affordable’ has been corrupted by government, which uses the phrase in the context of rented accommodation as 80% of the market. That means in this city rents of £784.80 a month for a one bed flat are regarded as ‘affordable’.  A flat costing £784.80 is more affordable than one where the rent is at the average charged (£971 per month).

Most developers are, understandable, attracted by securing the maximum return on their investment. They are risking huge sums of money, and they want a return on their investment consummate with that risk.

But that does nothing to help the housing crisis. Homes for sale in the city have long been beyond the means of many local people.  I was on BBC Radio 5 Live recently discussing the housing situation in Brighton.  On the programme was a self-employed plumber who has been struggling for years to buy his own place.  I think he said he is in his early 40s, works hard and determined.

In parts of Battersea in south London (SE11, SW11, and SW8) the number of properties available to rent has increased by 28.1% since the beginning of the year. This has led to a 6% decrease in rents being charged over the same period.

Now most of these properties are buy-to-let investments, and will beyond the means of ordinary people. But the lesson is important. If we can develop homes for rent with a mix of social and ‘affordable’ rents, then the market will begin to readjust, and the hopelessness experienced by many renters will be eased.

Will we have the fifteenth housing minister since 1997 by the end of June?

In July last year I wrote that we now have our fourteenth housing minister since 1997 and concluded that none had got the job done.  I was hoping that Gavin Barwell would be different and I have to say he did make some progress, albeit small.

With the calling of a general election for June, the chances of a fifteenth housing minister is increased.  Mr Barwell is defending a majority of 165 votes and the seat is 47th on Labour’s target list.

Far be for me to make a prediction regarding the overall election results, or the result in his Croydon Central constituency, but whatever the result, Mr. Barwell is unlikely to be the housing minister in seven weeks time. He will either lose his seat, be moved to another job if his party forms the next government, or he will be in opposition.

Discuss.

Actually please don’t!

All I will say is that housing is the issue that impacts more profoundly on the lives of so many people and I hope it takes centre stage in the election. Unless the housing crisis is tackled soon, it will remain with us for generations, long after the changes in our trading arrangements with Europe have been forgotten!

You might wish to discuss that!

What I want to see in the parties’ manifestos

The political parties are yet to publish their manifestos for the June general election. I have three simple requests to all parties for policies to be included in those manifestos:

  1. Make a commitment to building council houses, in massive numbers, as an investment for current and future generations. Abolish the Right to Buy so that these homes remain in public ownership in order that they continue, in perpetuity, to meet housing need, and not investment opportunities.
  2. Make an unequivocal commitment to end rough sleeping by the end of the 2017-2022 parliament. In a country as wealthy as the United Kingdom, it is an outrage that people are living on the streets, and their presence should shame those in a position to end rough sleeping.
  3. Put an end to benefit cuts. More than half of all voters think that benefit cuts have gone too far, according to an Ipsos Mori poll published on Thursday. Denying 18 to 21 year olds the right to claim benefit support to help towards their rents will drive young people into homelessness, into crime, and into sex work. What politician wants that as part of their legacy?

Private rented housing is “out of reach” for under 35s, says the Chartered Institute of Housing

The Chartered Institute of Housing (CIH) recently carried out research into the gap between rents in the private rented sector and what Local Housing Allowance (LHA) will pay.

LHA is based on the 30th centile of the range rents charged in the private rented sector. Except it isn’t. That was how it was supposed to be (having previously been reduced from there 50th centile). In fact, the level of payment has been frozen for three years and will be frozen until 2019/20. LHA no longer reflects in any way the reality of rents in a locality.

In Brighton and Hove the rates are £82.66 for a room in a shared house, £153.02 for a one bed flat, £192.48 for a two bed property. The average one bed flat in Brighton and Hove is now £971 per month compared to LHA of £612.08 for the same period.

In Eastbourne the rates are £67.00, £116.53 and £151.50, and in Hastings £69.77, £92.06 and £120.29. (There are higher rates for 3 and 4 properties).

It is worse for you if you are under 35 where you are restricted to claiming LHA for just a room in a shared house.

And if you think it is bad for under 35s, it is EVEN worse for those under 21 for whom the rate is zero (unless you are ‘lucky’ enough to qualify for one of several exemptions – merely being a rough sleeper is not enough).

So what has the CIH found? It has found that the gap between LHA and rents has widened to the point where private rented housing is “out of reach” for under 35s.

A couple of weeks ago I wrote how the senior civil servant responsible for housing policy at the Department for Work and Pensions, Darrell Smith, said that the government is now going to use LHA rates to set new, lower rents for specialist supported housing. Why? Because it is such a good barometer for the market? No. He said: “The one advantage of (LHA rates) is that they are already there, so it doesn’t cost the government anything to set it up. I know”, he continued, “that isn’t a great answer but that’s all I have got”.