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By Dave
21/11/2011

Laying the foundations …

The “new” housing strategy published today, Laying the Foundations: A Housing Strategy for England, has some interesting bits to it, but it is somewhat unfortunate that the government has taken the opportunity to trumpet its achievements and pronounce their success in this document without proper, close evaluation.  Readers of this blog will not be surprised by the self-publicity and self-laudatory approach in the strategy, although the endless critique of New Labour in the document is both tiresome and unnecessary as it really isn’t supported by evidence, and rather distorts the reality (in fact, the one thing New Labour did do was to commission research on their reforms, which the Con-Dems have avoided unless absolutely forced into, but the CLG housing research programme seems to have closed down sadly).

One could also tell a rather different story to the self-laudatory comments in the strategy about the affordable rent scheme (es paras 23-49, ch 3) – higher housing benefit, worse benefit/poverty traps etc.  It is also interesting to read about the focus on the local etc (it’s all a bit nauseous by now tbh) while at the same time appreciating that the effect of the value for money driver in social housing provision/regulation is to drive mergers/agglomerations in the sector to achieve economies of scale (para 41, ch 3) – localism or nationalism?

The strategy is also interesting for what it doesn’t say.  More of that in a moment.

Let’s start with what seems to be new in the paper, although much has been pre-announced:

i) The 95% mortgage: This has been heavily trailed in the media.  It comes in a chapter entitled “Increasing supply: more homes, stable growth” (ch 2), which I have to say is slightly worrying given the likely outcome of some households which take up this apparently enticing offer.  It is basically an indemnity scheme being run by the Home Builders Federation and CML.  The builder puts in 3.5% of the sale price and the government puts in “additional security for the loan in the form of a guarantee” (para 20).  100,000 households will be supported through this scheme.  Frankly, I’d worry about taking on a 95% mortgage in the current economy but so be it.

ii)Re-negotiation of section 106 agreements (ch 2, paras 28-31) – expect a new consultation on this shortly but the priority is to “encourage action on stalled development”, which may worry a few.

iii) Right to buy discounts: There will be a further consultation on effectively doubling the percentage cap on RTB discounts.  This was heavily trailed at the party conferences of course.  It is combined with a commitment that “every additional home sold under Right to Buy is replaced by a new home, and receipts from sales will be recycled towards the cost of replacement” (ch 3, para 63).  Of course, they do not say by what type of organisation at this stage but it will either be through “local delivery”, “national delivery” or a “combined approach” (para 67).  The devil will be in the detail.

iv) Can’t resist the chocolate teapot treatment again for the reprise on ASB: “We are proposing therefore to widen the grounds on which landlords can seek to evict tenants, to include where they or members of their household have been convicted of the sort of criminality seen in the recent rioting, wherever that took place” (ch 3, para 77).

v) Tenancy abuse (an interesting construction this, which I will leave to the discourse analysts amongst you): a “pay to stay” for those abusing social housing by earning £100k or more pa and still living in social housing; and the government is “looking closely at the case for strengthening powers in existing legislation on tenancy fraud” (para 81).

vi) Promoting further real estate investment trusts to invest in the private rental sector (yawn, yawn – this has been a theme of government housing policy since 1986, and continually unsuccessful).

vii) Giving service families in urgent need additional priority for an allocation as well as priority in the shared ownership/homebuy process (ch 6, paras 56-62).  I don’t know how I feel about that – it’s not really to do with my pacifism but about whether the case for their additional priority is necessarily made out over those other serious needs.

vii) And then there’s a raft of other stuff which is much less sexy (to me) – more on empty homes (snore – see my previous comment on the previous announcements); the green deal; the co-ordination of debt advice by Money Advice Service; a new deal for older people’s housing which seems to me to be the old deal, just with a certain degree of ring-fencing.

What’s really interesting is what’s not there and that is about regulation of the private rented sector.  They are apparently “looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes” (ch 4, para 19).  But that’s as good as it gets about regulating the sector beyond stuff about the Energy Act (erm, New Labour’s, I think) and the amazing provision of factsheets that Shapps sometimes tweets about.

All-in-all, nothing to shout about, I’d say, Shapps et al.

10 Comments

  1. joeh

    A few very interesting point missed out

    (iii) Note that new RTB sales sought is now 100,000 units when both Cameron and Shapps said 200,000 at conference.

    In terms of RtB it is mentioned throughout the strategy tht a 1 for 1 replacement will be ensured yet note well the language used at section 64 on page 27 discussing RTB “…expected receipts will provide a sufficient CONTRIBUTION TO the cost of replacement homes” A very different matter altogether.

    Many have also missed the 13.2% imposed increase on council house rents at section 46 on page 25 – This adds a further £714m to the HB bill out of the £831m added cost to council tenants. Note these are additional rise to rents for year on year increases.

    Page 24 at [26] may interest – 95% of London affordable rents are below 80% of market rent. Surely this means 5% are above 80% – Lawfulness anyone?

    Reply
    • Dave

      Thanks, Joeh, for pointing those out. The 1 for 1 is especially undeveloped in the paper – wait for the CP, I guess.

      Reply
  2. Cait

    I dont suppose it says WHERE the 1-1 replacements will be either?

    Jolly good wheeze to sell of 100k properties in London and replace them in let’s see …. ex pit villages ‘oop north’
    or something

    Reply
  3. joeh

    …and of course a 1 to 1 replacement can always be replacing a 4 bed house in London with a bedsit in Middlesbrough (and my apologies to M’Boro)

    Reply
    • dave

      There’s some interesting stuff on my twitter feed today from @jules-birch and @BBCMarkEaston and @martinhilditch about the number of new social housing starts in the last six months – 259! – and none in the North West; the south and south west had six, Yorkshire and Humberside 12.

      Reply
    • NL

      The devil will certainly be in the detail. Omens aren’t good.

      Reply
  4. jason @ personal injury lawyer

    Is it just me or does the phrase “smoke and mirrors” come to mind?

    Reply
  5. Peter

    How will it actually impact on private sector housing, and service delivery by local authority housing depts?

    Reply

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