With the manifestos all now published, I thought it might be interesting to look at what is being said about housing by the three main parties. I might do the others later, if I have time.
The highlight of housing policy seems to be a huge extension in the Right to Buy, to take in housing association properties. It’s on p.52 of their manifesto, here.
We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes. We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.
It is fair to say that this hasn’t exactly attracted universal praise. I’ll leave it to others to flesh out some of the socio/political objections (of which there are many), but I’d like to look at some of the legal implications. The immediate reaction of housing associations was to threaten litigation (see, e.g. here), relying on A1/P1, ECHR (peaceful enjoyment of possessions). But that strikes me as a weak argument. For one, it looks as if the housing association would receive the full market price for the property. As I read this policy, if you had a house worth, say, £100,000, then the applicant would pay (say) £70,000 and the remaining £30,000 would come from this new fund taken from local authority sales. Now, if the Housing Association gets full market value, then I’d have thought an A1/P1 challenge would be hopeless in light of James v UK App.8793/79 (leasehold enfranchisement under the Leasehold Reform Act 1967 is compatible with A1/P1 as the final price is a fair one).
I’m also not entirely sure that housing associations can have human rights. After all, they are public authorities themselves (Weaver v L&Q  EWCA Civ 587) and public authorities do not have human rights. I can see a way around this problem (HAs are actually only hybrid authorities, so can have human rights for some purposes), but still…It’s the implications for local authorities that also trouble me. With the end of the housing revenue subsidy system, local authorities are, in effect, self-funding for housing purposes now. Many are heavily in debt (owing to the final settlement payments that were needed to “buy out” of the subsidy system) and have business plans to take them to solvency based on, inter alia, receipts from RTB sales. If they are now required to give away large amounts of money in order to fund RTB sales from HAs, that will cause problems for their financing models. In any event, how many “expensive properties” actually fall vacant in any year? And what does “fall vacant” mean? Is the ending of a fixed-term “flexible” tenancy enough? If so, and if you’re an authority that doesn’t want to lose its stock, shouldn’t you grant proper secure tenancies? That would hugely delay the time when any property fell vacant.
The Labour Manifesto does not have one “big idea” like the RTB reforms, but, rather, seems to focus on the wider problems in the rented sector. So, at p.46, we find the following:
For the 11 million people who rent privately, we will legislate to make three-year tenancies the norm, with a ceiling on excessive rent rises. A ban on unfair letting agent fees will save renters over £600. We will drive standards up by creating a national register of private landlords
The national register of private landlords should be uncontroversial (but it won’t be, because far too many landlords object to anything which prevents them doing whatever they want with other peoples homes). Wales has a very similar scheme (Pt.1, Housing (Wales) Act 2014) which would (I imagine) be used as the basis for any English model. The Welsh one isn’t in force yet, but the scheme itself looks good. A central register of landlords and agents, with a “fit and proper person” test, compulsory training and CPD and, importantly, eye-watering fines for non-compliance.
Likewise, a ban on letting agent fees is to be welcomed (I know it doesn’t say all fees – just unfair ones). The idea that people who are looking for accommodation should not have to pay to facilitate that search is not new – it is pretty well established by the Accommodation Agencies Act 1953 (albeit that Act hasn’t kept pace with modern trends). The agents work for the landlord and it is the landlord who should pay their fees.
The really interesting bit, however, is three-year tenancies and rent dampening reforms (and it is only rent dampening). We learned last night that the proposal is for rent to increase by CPI each year. There have been some (wrong-headed) suggestions that (a) this is “rent control/caps” and/or (b) it will be subject to a human rights challenge relying on A1/P1. Both are plainly nonsense. As to (a), if (as is inevitably the case) the initial rental level is very high, all this does is slow the increase for a period of time. At the end of the three year period, the landlord could set a new (higher) baseline rent which would be uprated by CPI in the coming three years. (B) is even more unsustainable. The ECHR jurisprudence is clear – the rent would have to be far below the market rent before there would be a violation of A1/P1, see our earlier examples, here). The criticism here should be that the policy is far too timid, not that it is an unjustified interference with private rights.
The three-year bit could be interesting. Most renters will, I suspect, welcome the higher security. But there will have to be provisions for break-clauses. Not everyone will want three years (students who rent privately only in their 2nd and 3rd years of their degrees, for example). The crucial bit will be how the exceptions work. A landlord break is likely to undermine the scheme, for example. Of course, the easiest way of providing greater security would just be to abolish s.21, Housing Act 1988.
I find it hard to care what the Lib Dems have to say. The recent pronouncements from Mr Clegg make it clear that the rump of the party which looks likely to survive the coming election will back the Tory party. And we know from the tuition fee saga that they haven’t met a principle that they’re not prepared to sell. But their housing policy is actually much closer to Labour (p.100, here):
- Improve protections against rogue landlords and encourage a new multi-year tenancy with an agreed inflation-linked annual rent increase built in.
- Enable Local Authorities to operate licensing schemes for rental properties in areas where they believe it is needed.
- Establish a voluntary register of rented property where either the landlord or the tenant can register the property, to improve enforcement and tax transparency.
- Ban letting agent fees to tenants if the transparency requirements we introduced are not successful in bringing fees down to an affordable level by the end of 2016.
- Extend the use of Rent Repayment Orders to allow tenants to have their rent refunded when a property is found to contain serious risks to health, and withhold rent from landlords who have not carried out court-ordered improvements within a reasonable period of time.
- Introduce a new Help to Rent scheme to provide government-backed tenancy deposit loans for all first-time renters under 30.
- Conduct a full review of the help single people get under homelessness legislation
The first, second and fourth look like variants of the Labour policy. I don’t care about a voluntary register since it won’t have any effect in law. The reform of RROs could be interesting, as could a review of homelessness and single persons (‘tho the forthcoming Supreme Court/Priority Need cases could improve matters as well). But the one that amuses me is “Help to Rent”. That would require another reform to the Tenancy Deposit provisions of the HA 2004, otherwise it might well be that the prescribed information will have to be given to the government, as the ultimate source of the funds.