07/02/2009

Councils bribing tenants shock!

In apparent confirmation both that the Times is now a tabloid newspaper and that today was a quiet news day, this was the lead story in Saturday’s Times.

I’ll just quote the opening sentence:

Council tenants are being offered £30,000 bribes or cottages by the sea to vacate their homes for credit crunch victims as Britain faces a critical social housing shortage.

The only accurate part of that is the social housing shortage. Funny how that only becomes news when Times readers are getting worried they might need social housing themselves. Nonetheless, there is a critical social housing shortage and it is a serious issue. Sadly not one the Times felt able to actually deal with.

The whole tenor of the piece is that LAs are frantically bribing tenants with tens of thousands of pounds in order to clear space for credit crunch casualties. Of course the casualties will usually be so far down the priority scale on a Part VI application, they may as well wait for the end of the recession and buy their repossessed property back. Perhaps LAs are anticipating that their homeless prevention services will be breached, resulting in a flood of homeless applications…

Apparently, payments for transferring to a smaller property for ‘underoccupiers’ are to be considered as bribes. This is quite unlike proposals to support those in trouble with their mortgages by buying part or all of their property and letting them remain as, in part or whole, social tenants. That is merely support, or prevention, or doing the right thing.

I haven’t come across the payments to leave a secure tenancy and go to the private sector, apparently operated by Westminster, Kensington & Chelsea and a number of other Councils. Westminster apparently adds a condition that the (ex) tenant will not be rehoused again should they become homeless. In ignorance of any details, my first impression is that I’m not sure that that would stand up to challenge – can one sign away the LA’s Part VII duties in a private contract? I could also see the criteria and procedure by which the LA assess the tenant’s suitability for such an offer as being open to challenge, or even falling under consumer contract terms regulations.

The article’s quote from the Taxpayers’ Alliance is merely dimwitted, but for real if inadvertent humour, one has to head to the readers’ comments. These are people scandalised, nay horrified, at the ridiculous waste of taxpayer’s money on such scroungers, when the money could be better spent on, well, subsidising their own mortgage payments.

But the main article set the tone to follow. Truly dreadful, cynical and lazy work by Jill Sherman and Fiona Hamilton – those being the names on the byline – and obviously by the editors.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

9 Comments

  1. Michael

    The scheme is real:-

    http://www.westminster.gov.uk/housing/housingoptions/ctwmove/cash-incentive-scheme.cfm

    The scandal is that it is not news.

    I personally know a few underoccupiers, lucky them. One is a single person in a six-bed. She rents the other rooms out and declares it all so no problem there.

    But, if the Housing Act is amended in line with Lord Whassisface’s comments Newport City Council v Charles, underoccupiers may be forced to move to smaller premises, and the need for cash incentives may disappear.

    Reply
    • NL

      Ah, I see that the phrasing is ‘we will not rehouse you if you become homeless as a result of giving up your council property’. That makes sense – just intentional homelessness – and quite different to what the Times suggested.

      The amendment to the Housing Act suggested by Laws LJ in Newport CC v Charles would make little difference. It would only apply to underoccupying successors and only be to vary the timescale in which the LA can seek possession in certain circumstances. It has nothing to do with underoccupation in general.

  2. Michael

    Well, the lawmakers could consider your comments & amend the law to include underoccupation in general.

    You’re read by Nic Madge, NL, so imagine who else is watching.

    I did read that article as a matter of fact – in a great little Spanish cafe in Pimlico who have all the papers in for the punters, as it happens – and it was just so badly written, and so spitefully posited, as to cause even the most dyed in the wool disgusted from Tunbridge Wells to cringe in their crunchy nuts.

    But there is not much wrong with the scheme as far as I can see. Waiting lists are long and young families deserve a decent sized place to live.

    And in any case, any contributor to this blog would surely make mincemeant of that little intentionally homeless caveat:-

    “As a RESULT of my client giving up her council property m’lud????”

    Reply
    • NL

      I have no problem with payments for transfer to a tenancy of a smaller property. I’m not sure about payments to go private, but in principle – with suitable selection procedures, safeguards, etc., why not? Someone in the article suggested £1 million in payments may only result in 40 homes. That is a factor of 10 cheaper than the LA buying them at market price, and probably 5 times cheaper than building them, even if the LA could, so the logic is clear.

      The intentional homeless caveat would of course fail on intervening settled accomodation. Where it might get interesting would be on issues of affordability of the subsequent accommodation, which is why the scheme needs good selection procedures…

      And, as you well know, I’m not suggesting any changes in the underoccupation rules at all – not my place ;-)

  3. Jim

    So much for those who say we don’t live in a class-ridden society.

    Reply
  4. Robert

    Long before the mess we are in when Councils were selling off Council Housing, I advocated that the bribe of £15,000 that councils were giving to these Tenants should of been used for them to buy a property in the private sector, so leaving the Council Property to be relet for other deserving families.
    Having read the piece in the Times, Iwonder if the authors had made any comment when councils were offering the bribes to buy during Maggies right to buy was made.

    Reply
  5. M

    Probably not. And the bribes continued long after Maggie and the Tories left office…

    Reply
  6. chris

    I have heard that a certain social landlord has sent letters out to get council house buyers to sell their property to an estate agent they designate and they will house them in their so called affordable housing on a 50/50 rent to buy plan! is this legal?
    i think it’s lose all the way for the punter!

    Reply
    • NL

      Chris – Why wouldn’t this be legal? or at least if the HA is making an offer to purchase.

      Without knowing the HA’s policies on allocation of shared equity properties, I couldn’t say if this was in breach of their policies, which would be the main unlawful point.

      If the HA is insisting that the seller uses a particular conveyancer, this is completely outside what they can lawfully do. And if the HA is saying they will offer a shared equity place if the seller sells to a particular private third party, that sounds, on the face of it, potentially unlawful, depending on what the arrangement actually is. I would expect any HA that did this to be in a very large amount of trouble.

      But, given that a lot, although not all, of ex-LA property is going to get at the low end of market prices (and will be dropping like a stone at the moment), it is not necessarily an unreasonable approach if the HA is loking to buy the properties. There can be, of course, no obligation on the sellers to buy a shared equity place, if they get enough to buy elsewhere or if they want to find a place to rent for themselves. If they don’t want to sell, they don’t have to.

      Frankly, Chris, what you have heard doesn’t sound wholly right, or at least not the full picture. If you find out more, do get back to us.

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