The Housing Bill: The final lap

Originally published on April 29 on Inside Edge 2, my blog for Inside Housing

The worst excuse for a Bill that I can remember in 25 years of writing about housing limps back to the House of Commons next week.

The Housing and Planning Bill’s tail is not quite between its legs as all the key elements are still there and the Commons will reverse some changes. But it’s been gutted in the Lords, with two more defeats for the government on Wednesday, and this morning (Friday) it’s the subject of withering criticism by the all-party Public Accounts Committee.

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The Housing Bill: the better part of valour

Originally posted on April 19 on Inside Edge 2, my blog for Inside Housing

It was another day, another session of watering down the Housing and Planning Bill in the Lords. Peers reached sections of the Bill including Pay to Stay and security of tenure in the latest Report stage debate on Monday.

On Pay to Stay for ‘high income’ council tenants, they inflicted three more defeats on the government and they also forced some interesting clarifications of the detail out of ministers. As the Bill now stands, local authorities will have discretion about whether to apply Pay to Stay, the thresholds will be increased to £40,000 outside London and £50,000 in London, and the taper for higher rents will be 10p.

Obviously it remains to be seen how much of this the government will look to reverse in the Commons, perhaps citing financial privilege because the money raised by the policy goes back to the Treasury.

The government version of the policy – set out in an email to peers an hour before the debate – is that it will be compulsory for councils, the thresholds will be £31,000 and £40,000 and the taper will be 20p. That means tenants would pay an extra £200 a year in rent for each £1,000 they earn above the thresholds. (It’s not clear to me why the out-of-London threshold has been increased from the previous £30,000).

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The Housing Bill: Higher power

Originally published on April 14 on Inside Edge 2, my blog for Inside Housing

Day two of the Lords report stage on the Housing Bill brought concessions on forced sales but there were inevitably more questions too.

Peers reached Part 4 of the Bill covering social housing in England and the main business of the day was the first two chapters: implementation of the voluntary right to buy and the levy on sales of high value council houses to pay for it.

This has always been one of the elements of the legislation that most resembled the back of a fag packet. The only figures ever published on how forced sales would work came in a Conservative party press release during the election campaign. This suggested that the most valuable third of council homes would be sold as they fall vacant, with values assessed against regional thresholds by bedroom size.

That raised many problems but two that stood out in particular. First, setting the values like that would mean local authorities in areas with high house prices would lose virtually all of their stock.

Second, it didn’t stack up: receipts would simply not be enough to cover right to buy discounts, the promised replacement homes and a proposed brownfield regeneration fund. That was clear right at the start and the CIH estimated the shortfall at £2.2bn.

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The Housing Bill: fresh start

Originally posted on April 12 on Inside Edge 2, my blog for Inside Housing

Otto von Bismarck famously said that laws are like sausages: it is better not to see how they are made.

One exception to the Iron Chancellor’s dictum could be the way that the UK House of Lords takes the distasteful raw ingredients of legislation and improves it with new recipes.

That was certainly the case on the first day of the report stage of the Housing and Planning Bill on Monday, which saw the government twice suffer major defeats and also make a significant concession on starter homes.

As the Bill now stands, this ‘cuckoo in the nest’ of affordable housing (as Lord Best memorably called it at the committee stage) has been cut down to size a bit: the discount will be repayable over 20 years rather than eight; and local authorities will have the flexibility to decide on local needs rather than targeting virtually all section 106 contributions as starter homes. The government also accepted another amendment that will exempt rural exceptions sites from the starter home requirement.

Ministers had already moved slightly on the discount period: the Bill originally said that starter home buyers would be able to sell without repaying any of the 20% discount after five years but a consultation proposes extending that to eight years with the discount tapering away over that period.

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Three futures

Originally posted on April 11 on Inside Edge 2, my blog for Inside Housing

What does the future hold for housing? That was a question that generated three contrasting answers and lots of debate in a session I chaired at the Housing Studies Association conference in York last week.

If you’re from Scotland, the future looks bright. Robert Black, chair of the independent Housing and Wellbeing Commission, spoke about the extraordinary impact of its work ahead of the Scottish Parliament elections. The SNP and Labour are vying with each other to accept its target of 9,000 affordable homes a year, including 7,000 actually affordable homes for social rent. In English terms, once you scale up for a far larger population, that’s the equivalent of Brandon Lewis pledging 100,000 social rented homes a year.

In England’s dreams, of course, but which dreams? Competing visions were on offer from Chris Walker of Policy Exchange and Anna Minton of the University of East London.

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What David Cameron’s tax returns say about property

Next time you read about ‘fat cats’ earning more than the prime minister here’s something to bear in mind: so does his house.

The summarised tax returns released by David Cameron this weekend show that he had a total taxable income of just over £200,000 in 2014/15. The first £141,000 of that were his earnings as prime minister: he has not taken a pay rise since 2010 and has also voluntarily waived a £20,000 prime ministerial expenses deduction since 2011.

Most of the Panama Papers coverage has concentrated on Cameron’s links to his father’s offshore fund and an inheritance gift from his mother. However, he is also the first prime minister to rent out his existing home while living tax-free in Downing Street. The accounts show that he had a net rental income of £47,000 from letting out his house in Notting Hill, an amount that notes to the accounts confirm is his 50 per cent share of the proceeds:

Tax

So the total rent (after expenses) received by the Camerons last year was £94,000 and in the first five years since he became prime minister they gained a total of £432,000 in rent.

However, that is not the total amount they will have ‘earned’ from their house as London house prices have also soared over the same period. The exact value of the Cameron house is hard to pin down, since they are reported to have spent £600,000 on renovations after buying it in 2006. Some reports put the value at £2 million in 2010, others £2.7 million.

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The turn of the screw

Originally posted on April 4 on Inside Edge 2, my blog for Inside Housing

You’d never guess it from the sound of the violins playing for Buy to Let but there were other significant changes to benefits and tax on housing this month.

As ‘investors’ rushed to beat the April 1 deadline for higher rates of stamp duty on second homes, the orchestra reached a crescendo after new affordability tests were proposed by the Bank of England.

All that noise meant much less was heard about their tenants facing up to the first year of an unprecedented four-year freeze in their local housing allowance and other benefits and tax credits.

After three years in which LHA increases were restricted to 1 per cent, housing benefit rates for private tenants will now stay the same until 2020. Whatever the problems faced by their landlords, that means tenants will inevitably see rising shortfalls between their benefit and their rent. Equally inevitably, you would think, evictions will rise.

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