Waiting for renter reform

Originally written as a column for Inside Housing.

Take your pick. Section 21, housing benefit, tax, net zero, standards, Covid, the courts, mortgage rates, tenants.

All of them reasons why there will be an exodus of landlords and homes from the private rented sector if you believe what you read in certain newspapers. All of them are one more nail in the coffin of buy to let.

One or more of those reasons will be quoted in every article about landlords selling up but, though there may be an element of truth to some of them, few will stop to point out that the party lasted for years. I don’t remember many landlords cutting their rents when mortgage rates fell to record lows after 2009 or complaining about the capital gains they’ve made since.

What matters, as MPs on the all-party Levelling Up, Housing and Communities Committee points out in a report published today [Thursday] is who buys the homes that landlords are selling.

Properties sold to another private landlord, or perhaps to a local authority or social landlord, are still available for rent. Those sold into owner-occupation will reduce demand for rentals if the new owner was previously a renter. 

The really damaging destination is when homes for rent are sold, or converted, into short-term holiday lets and that means that the Westminster government must go further than tentative plans for registration.

That’s a powerful reminder that reforming the private rented sector is about much more than ‘greedy landlords’ or a ‘war on buy to let’ and that any new system has to balance different interests and demand from different groups for decent homes to rent.

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Hunt’s statement of intent

Originally written as a column for Inside Housing.

Eight weeks after Liz Truss and Kwasi Kwarteng shrank the economy with their growth plan, chancellor Jeremy Hunt completed his reversal of almost all of their plans in his Autumn Statement.

He was speaking against a backdrop of dire forecasts of recession, unemployment, falling living standards and rising taxes that spoke of bad news to come for housing and tenants and landlords alike.

The complete rewrite of the Autumn Statement leaves a long list of tax increases and spending cuts in its wake, even if many of them will not take effect until after the next election and so may not happen. However, there was still a little hope amidst the gloom.

Here are five points I picked up from the statement itself and the background documents.

The cap and the freeze

Perhaps the most surprising thing about the statement – with a nod to expectations management by the Treasury – is that there is also some good news. The announcement that the government will stick to previous pledges to increase benefits (and pensions and the minimum wage) in line with prices was not completely unexpected but will still come as a relief to tenants and landlords alike.

But Jeremy Hunt’s decision to increase the overall benefit caps by the same amount is much more of a surprise. Without this, thousands more households faced being capped as their benefits rose to hit thresholds that have been frozen since they were cut in 2016. The main thresholds for families will now increase to £22,020 a year outside London and £25,323 in the capital. The cost is estimated at £315 million in 2023/24 and almost £2 billion over the next five years.

And yet… these are still far below the average earnings figures that were misleadingly used to justify the cap in the first place. And they leave people who are already capped facing rent increases with no extra income to pay for them.

Finally, buried deep in the background documents is more gloom: the assumption that Local Housing Allowance rates for private renters will remain at 2022/23 levels, which have themselves been frozen since April 2020. This despite rapidly rising rents. If confirmed, the result will inevitably be rising rent arrears and homelessness.

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Action for now, solutions not yet

The £15 billion energy cost support package announced by Rishi Sunak rightly benefits the poorest households most but it remains to be seen what it will do about the cost of living in general and the cost of housing in particular. 

Under the package announced by the chancellor on Thursday, 8 million households on benefits will get a one-off payment of £650 paid in two lump sums in July and the Autumn. Add that to the £400 energy support payment (rather than a loan) that will go to everyone and the £150 payment already made (at least in theory) to those in Bands A-D for the council tax, and the Treasury says this amounts to £1,200 help towards the cost of living for the most vulnerable.

Background documents confirm the one-off payment will not count towards the benefit cap, unlike the £20 a week uplift to universal credit during the pandemic. That should avoid many more households seeing the help disappear as fast as it arrives.

Sunak had been under pressure to do more on benefits not just because of energy costs but also because of the large gap between the 3.1 per cent uprating of benefits in April (based on last September’s inflation rate) and the current 9 per cent rate of CPI inflation.

He said his one-off payment would be worth more than bringing forward next year’s uprating of benefits, as some had suggested. 

And he also confirmed that the April 2023 uprating will be based on next September’s inflation rate, which could easily be more than 10 per cent, rather than retaining the option of declaring it to be unaffordable.

So far, so good, then and this is probably the package that the chancellor should have delivered in a Spring Statementthat looked inadequate at the time and has seemed even weeker with each passing week. This package looks to be both more generous and more redistributive than many people were expecting.

However, that also reflects the scale of the cost of living crisis. Add the £800 increase in the energy price cap expected in October to the £700 increase already seen in April and that is already more than the chancellor’s £1,200 for the most vulnerable and that is before you get to large increases in the price of food, fuel and other essentials. 

And there was one major cost that was as absent from Sunak’s statement this week as it was from the one he made in March and the Queen’s Speech earlier this month. No prizes for guessing it must be housing. 

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The political choices on homelessness

Everyone In was one of the few success stories in housing policy this century but all that progress in tackling homelessness is about to go into reverse.

The stark warning in the latest Homelessness Monitor for England from Crisis is that levels of core homelessness will have gone up by a third between 2019 and 2024 if nothing changes.

If the reasons for the forecast are not hard to guess, the contrast with the progress made at the start of the pandemic when 37,000 people sleeping rough or at risk of doing so were given accommodation makes this even more depressing. So too the contrast between England and the continuing ambitions of devolved governments elsewhere in Britain to end homelessness altogether.   

Rough sleeping was down 33 per cent and sofa surfing down 11 per cent in England in 2020 after that extraordinary initial effort under Everyone In but it soon morphed from a policy into branding for an initiative.

The result was that core homelessness (which means the most acute forms of homelessness including rough sleeping, sofa surfing and being in temporary accommodation) was also down 5 per cent on 2019 levels at 203,400 in 2020.

The Homelessness Reduction Act 2017, another success story, also helped single homeless households, although the report points to weaknesses including continued lack of entitlement to accommodation for some groups (another issue being addressed elsewhere but not England).

So the good news is that the pandemic saw a welcome interruption in the upward trend in homelessness since 2012.

That’s backed up by the latest figures published this week showing that the number of rough sleepers fell for the fourth year in a row in the government’s latest annual snapshot survey – and by the repeal of the Vagrancy Act.

The bad news is that most of the support introduced during the pandemic has since been reversed, with the uplift withdrawn, LHA rates refrozen despite rising rents and mounting concern that evictions could rise sharply in 2022.

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Smoke, mirrors and broken promises

Originally written as a column for Inside Housing.

This is definitely not the first government to hype up its policies, break its promises and sneak out inconvenient announcements as quietly as possible but it is one that has taken its game to a new level.

Anyone in housing has become wearily familiar with the semantics of ‘affordable’ housing and the ‘spare room subsidy’ but the trend is now evident across government.

The thought was prompted by watching Boris Johnson bluster his way through a TV interview in which he denied he was breaking his repeated pledge to build Northern Powerhouse Rail between Liverpool and Leeds.

That scheme, plus the eastern leg of HS2, have indeed been scrapped in the Integrated Rail Plan but the prime minister’s dodgy claim was based on small sections of them going ahead.

Boris Johnson pulled a similar trick with his promise to build ’40 new hospitals’. Most of them are merely new buildings at existing hospitals – and the infrastructure watchdog now says most are ‘unachievable’ in any case -but that has not stopped the hype.

Aside from the transport issues, the importance of (take your pick) ‘the biggest ever public investment in Britain’s rail network’ or the ‘Great Train Robbery’ is of course the link with levelling up.

That policy is due to be fleshed out in a white paper before Christmas but its success as a slogan is based on the implication that everyone can be a winner without anyone losing out.

That was also the claim implicit in the policy on social care that Boris Johnson (him again) promised would mean that nobody will have to sell their home.

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Benefit cap surge is a warning of worse to come

Originally published as a column for Inside Housing on August 7.

Step away from planning reform for a few moments and grim news out today (Thursday August 6) reveals a more immediate crisis in the benefits system with even more alarming implications for the future.

Figures published by the Department for Work and Pensions (DWP) show that the number of households subject to the benefit cap almost doubled to 154,000 between February 2020 and May 2020. Of those, 140,000 had children.

More households have moved on to Universal Credit over time so the grey line for total capped households is the one to watch – note that the increase is much bigger than when the benefit cap was reduced in 2016.

Capped households

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Housing in the time of Coronavirus

Originally posted on March 19 as a blog for Inside Housing.

It was only last week but already it seems a lifetime ago since BC – Before Coronavirus

With schools closing, London facing lockdown and, who knows, troops on the streets by the weekend, the impact on housing may seem minor by comparison.

But beyond parochial organisational concerns, the situation is critical for millions of people faced with losing their income or their job and wondering if they will lose their home too – and a matter of life and death for those living and working in care homes, extra care and sheltered housing and those who already have no home.

With the government twisting the arms of mortgage lenders to offer payment holidays, help arrived for home owners first. Now it is promising help for renters with emergency legislation to ban private and social landlords from evicting anyone for three months and no new possession proceedings to be allowed during the crisis.

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Budget boost leaves housing gaps

Originally published on March 11 as a blog for Inside Housing.

This is a Budget that does not live up to its own hype and has some glaring omissions but still brings some good news for housing.

There are three big positives: a £12.2bn Affordable Homes Programme (AHP) over the five years from 2021/22; an additional £1bn for a Building Safety Fund to remove dangerous cladding; and £650m to help rough sleepers into permanent accommodation.

Add the reversal of an interest rate hike for borrowing for new council homes, extra funding for housing infrastructure, £1.2bn in consequentials that other UK nations can invest in new homes and an extension of Shared Accommodation Rate exemptions to young rough sleepers and other vulnerable groups, and this looks like one of the best Budgets for housing in the last 10 years.

However, that’s not setting the bar especially high, and you don’t have to look very far below the surface before the questions start to mount up.

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Conservatives fail to rise to the housing challenge

Originally posted on November 25 on my blog for Inside Housing.

A Conservative election manifesto with little new to offer signals that housing has moved a long way down the party’s list of priorities.

The contrast between the Labour manifesto plan for 150,000 council and housing association homes a year and the Lib Dem manifesto promise of 100,000 homes for social rent a year could hardly be starker.

The Tory document launched by Boris Johnson does have three pages on housing but the only new policies in it had already been launched in separate announcements earlier in the campaign.

These include encouraging a new market for long-term fixed-rate mortgages to slash the costs of deposits, a First Home scheme of homes at a 30% discount in perpetuity for local families and a stamp duty surcharge on overseas buyers to fund more help for rough sleepers.

Even these are not strictly speaking new: long-term fixed rates were encouraged by Gordon Brown but never took off; David Cameron promised 200,000 starter homes at a discount but none were ever built and the new scheme seems to involve only 19,000 homes by the mid-2020s; and Theresa May proposed exactly the same levy on overseas buyers last year before it was watered down.

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Still waiting for the end of austerity

Originally posted on September 4 on my blog for Inside Housing.

Austerity may be over, according to the chancellor, but it remains to be seen what that really means for the spending programmes that matter most to housing.

What Sajid Javid meant by that boast in Wednesday’s Spending Round speech was that all departmental budgets will be increased at least in line with inflation in 2020/21.

But it soon became clear – if it wasn’t already – that housing is not one of the so-called ‘people’s priorities’ of crime, education and health and so does not qualify for any headline-grabbing investment.

The only housing-related announcement in the speech itself was a £54m increase in funding for homelessness and rough sleeping to £422m in 2020/21, which Mr Javid said amounted to a 13% real terms increase.

That’s just as well because both the speech and background document were completely silent on what the government intends to do about one of the biggest drivers for homelessness.

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