The bedroom tax: only fair to private tenants?

Of all the arguments made for the bedroom tax, the most slippery is the one about it being ‘only fair to private tenants’. That should change after an all-party report published this week.

It’s the third and probably least used of three arguments made by ministers for what they call the removal of the spare room subsidy but it’s also the one that has received the least scrutiny.

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Balancing act

Government action on private renting looked a distant prospect when it brusquely rejected plans for light-touch regulation as ‘red tape’ in 2010.

So today’s statement by Eric Pickles announcing a package of measures to give private tenants a better deal is evidence that even the Conservatives have woken up to the fact that they are a growing part of the electorate and testament to the efforts of campaigners over the last three and a half years.

Following up an announcement made – significantly – during the Conservative Party conference, the communities secretary says ‘we recognise there is more to do to support a vibrant private rented sector’.

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Bedroom blues

Just when you were beginning to miss him, Grant Shapps is back with a bang and a complaint to the United Nations about that ‘woman from Brazil’.

The Conservative Party chairman brought an international twist to his old housing stomping ground in a Today programme interview that pitted him against Raquel Rolnik, the UN’s special rapporteur on adequate housing. Readers will need no reminding that in a preliminary statement following a two-week visit to the UK she is calling for the bedroom tax to be suspended immediately and fully re-evaluated.

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Middle way

A call to force letting agents be upfront about their charges has made all theheadlines but a report published by MPs today is about much more than that.

After complaints from both tenants and landlords about a sector dubbed ‘the property industry’s Wild West’, the cross-party Communities and Local Government committee recommends going further than the government’s plan to require letting agents to belong to an approved redress scheme. They say it should be accompanied by ‘a robust cost of practice that sets out clear standards with which agents are required to comply’ and they recommend that letting and managing agents should be subject to the same regulation – and required to meet the same professional standards – as sales agents.

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Sold short

A stark warning of the consequences of market failure in the housing system comes from an independent commission today.

The broad-based group set up by the Royal Institution of Chartered Surveyors(RICS) is chaired by Michael Newey, RICS president elect and chief executive of Broadland Housing Group, and also includes Mark Clare of Barratt, Nick Jopling of Grainger, James Pargeter of Deloitte Real Estate, Paul Tennant of Orbit and Duncan Maclennan of University of St Andrews.

They argue that: ‘High house prices, complemented with high levels of housing unaffordability are the greatest signs of market failure. This in turn has an adverse effect on labour mobility, commuting, productivity and job creation. This commission recognises the negative impact that a poor housing system has on the wider economy and hopes to see it elevated still higher on government agendas.

In other words, what the commission argues are ‘clear signs of market failure’ include negative externalities that go far beyond housing and require a switch away from the ‘short-termism’ that has characterised policy for the last 50 years.

However, in an illustration of just how difficult it is to break away from a short-term approach, the commission seems to face both ways on current government policies.

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The big switch

Ed Miliband has ended three decades of political consensus that it’s better to subsidise rents than new homes but changing course will not be easy.

The Labour leader’s speech in Newham this morning is significant in all kinds of ways: for the party’s positioning ahead of the next election; for the implied switch to contributory benefits and ‘something for something’; for tackling low pay; and for the careful use of ‘social security’ to avoid the loaded term ‘welfare’.

Even the setting – Newham Dockside – is significant since it looks very much like an endorsement of the more proactive but harsher approach to benefit claimants adopted by its mayor Sir Robin Wales.

All of those things could have major implications for housing but none so much as the plan to shift spending back from housing benefit to bricks and mortar – the end of ‘letting housing benefit take the strain’ and admitting the failure over decades to build enough homes.

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Sharper focus

Bit by bit the picture of how housing policy would look under a Labour government is becoming clearer but there are still some blurred areas.

In the latest results from its policy review process, the party has published more new ideas on the private rented sector. Following up on earlier proposals on letting agents and their charges and more stable tenancies for families, this one is all about the case for greater regulation of landlords.

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Renting reform

Wales is set to go where England failed to tread on tenancy reform under plans put forward this week.

The Renting Homes white paper published by the Welsh Government is an updated version of the Law Commission proposals that the previous government in England seemed to like at first, then dithered over and finally allowed to lapse at the last election.

So now Wales is set to reap the benefits of two simple and clearly understood forms of tenancy while England continues to cope with a mess of different ones. These are more than just technical, legal changes. The white paper argues that: ‘The current differences between renting a home from a local authority, housing association or private landlord contribute to weaknesses in the way the whole housing system works. Renting a home is not always seen as a good choice. Indeed, it is sometimes considered to be the last option.’

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Squeezed out

Here are some thoughts on an event I’ve just chaired for the Resolution Foundation yesterday on the scale of the housing crisis and how to fix it.

Rather like most of my blogs, I thought it would be stronger on the first bit than the second, but the debate revealed a new willingness to look for solutions as well as more reasons to be gloomy.

The centerpiece was a sneak preview of some forthcoming research from the Resolution Foundation and Hometrack on the housing plight of low and middle income households. The foundation is a think tank focused on the 5.6 million people caught in the squeezed middle between stagnating wages and rising costs.

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Dead cert

So, three years after it was pronounced dead, can anything stop buy to let squeezing out owner-occupation?

Figures from the Council of Mortgage Lenders (CML) yesterday showed that loans to landlords accounted for 13.4 per cent of the £165.6 billion worth of outstanding mortgages in the first quarter of the year. That’s up from 13.0 per cent in the fourth quarter of 2012 and just 9.8 per cent at the start of the credit crunch in 2007.

All of which makes it easy to forget that it was only three years ago when the last rites were being delivered for buy to let by probably its best-known pioneers, Fergus and Judith Wilson. The former teachers built a 700-home empire but by 2010 they were bailing out and telling The Guardian that buy to let was ‘absolutely dead and will never return’.

Read the rest of this post on Inside Edge, my blog for Inside Housing