This week's National news (July 21 - July 25)
- NATIONAL:3 per cent of house buyers last month were aged 18-30
- NATIONAL:Ethical weekly payment store goes national
- NATIONAL:Labour to force parliamentary ‘bedroom tax’ vote
- NATIONAL:A third of calls for homelessness assistance go unanswered
- NATIONAL:Blog: Why changing the borrowing rules is still a top priority
- NATIONAL:Generation Rent launches tenancy deposit protection discussion paper
- NATIONAL:Residential Landlords Association rejects ‘alarmist’ rent data
- National: Big spending ‘not the solution to Britain's social problems’, says Ed Miliband
- NATIONAL:Tesco to build 4,000 homes on land
- NATIONAL:NLA challenges homeless charities to do more
- NATIONAL:Blog: Housing in the reshuffle: big shoes to fill, and an even bigger challenge
- NATIONAL:Government issues guidance to help tenants lead change
Tuesday 22 July 2014
Monday 21 July 2014
NATIONAL:3 per cent of house buyers last month were aged 18-30
People aged 18 to 30 accounted for just 3 per cent of house sales last month, according to the National Association of Estate Agents (NAEA).
The NAEA’s June Housing Market Report shows that the number of first time buyers dropped to 20 per cent, down from 25 per cent in May 2014 (a 5 per cent decrease), the lowest level recorded since May 2013. The first time buyer struggle is reflected in the age of this month’s house buyers, as those aged 18 to 30 represented just three per cent of all house sales in June, the lowest percentage of young house buyers recorded by the NAEA to-date.
Nearly 80 per cent of NAEA member agents believe the recent announcement by the Bank of England governor, Mark Carney, on the cap on high-risk mortgages, which will see only 15 per cent of new mortgages at 4.5 times a borrower's income, will affect the number of first-time buyers and home owners looking to move.
Mark Hayward, managing director of the National Association of Estate Agents, said: “Things are getting even tougher for first time buyers. Not only do you now need to stump up ridiculously large sums of money in terms of deposits and stamp duty to be able to get on the ladder, but new rules mean buyers will also have to prove they can easily afford repayments now and in the future.
“Alongside this, a scaling back of the governments Help to Buy scheme and the implementation of the MMR in April will also have a significantly negative impact on the first time buyer market.”
There is some good news in this month’s NAEA housing report, as June saw an increase in the average number of properties available per NAEA member branch. Available properties increased to an average of 46 compared to 44 in May 2014. The number of properties available per member branch is still historically low, and has not reached above 50 per month since November 2013, and above 60 since May 2013.
The average number of house hunters registering with NAEA agents decreased slightly in June, from an average of 374 house hunters in May to 371 in June. However, NAEA member agents also reported a decrease in the average number of sales agreed per branch, down from ten in May to nine in June.
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NATIONAL:Ethical weekly payment store goes national
A scheme which provides an affordable and ethical alternative to loan sharks and high street weekly payment stores has gone national – with two new stores set up in the south.
The Smarterbuys Store, a partnership between Northern Housing Consortium, Derwentside Homes and Prince Bishops Community Bank, provides social housing tenants with access to an online store, where they can buy new household essentials.
With ten housing providers now set up in the north, The Smarterbuys Store has started its campaign down south, with Yarlington Housing Group and Sovereign joining in the last month.
Janet Howarth, financial inclusion co-ordinator at Yarlington, said: “Like many housing providers we found that our tenants were turning to high street payment stores, pay day or door step lenders when they needed to replace household items or furnish their home - simply because they had no other option. As a result they end up paying high interest rates and massively inflated prices for products.
“We decided to join the campaign to give our customers choice by setting up our own The Smarterbuys Store. So far it’s proving a real success with our tenants and it gives them confidence because it’s backed by their housing provider.”
The Smarterbuys Store is more than just a weekly payment store, as well as giving housing tenants access to responsible, affordable credit, it also encourages them to save as they buy, by putting 25p from every weekly payment into an account opened especially for them.
Jacqui Grimes, programme manager for The Smarterbuys Store, said: “As a registered charity customers can be sure that we have their interests in mind. We work on not-for-profit principles to save social housing tenants money, encourage them to save and importantly give them a choice if they need the option of weekly payments.
“Our products are up to 40 per cent cheaper than other weekly payment stores and we have an ethical approach to lending. It’s a fantastic scheme which has seen some great success - but it really does rely on housing providers to join the campaign to make a real difference.”
If you would like more information on The Smarterbuys Store email Jacqui Grimes at Jacqui.email@example.com or visit www.sbstore.org.
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NATIONAL:Labour to force parliamentary ‘bedroom tax’ vote
Labour has revealed it plans to force a parliamentary vote to abolish the ‘bedroom tax’ in the autumn, following the Liberal Democrat’s U-turn on the policy last week.
Last Thursday, Danny Alexander, Liberal Democrat chief secretary to the Treasury called for a major overhaul of the policy they had previously supported saying that only those who turn down a suitable offer of an alternative home should have their benefits reduced, while disabled adults should be exempt altogether.
A Labour motion for abolition after the 2013 summer recess was defeated by 252 to 226 votes because of coalition support.
But if the Deputy PM now gets his MPs to vote with Labour – the housing benefit cut would have to be abolished.
Shadow work and pensions secretary Rachel Reeves told the Sunday People: “The Lib Dems have a simple choice to make.
“They could do the right thing and vote with Labour.
"Or they can vote with their Tory friends to keep the cruel and unfair bedroom tax in place.”
The vote will be to scrap the policy, rather than amend it as suggested by Mr Alexander.
Ms Reeves (pictured) added: “Everyone knows that without the Lib Dems there would be no bedroom tax.
"Nick Clegg’s comments will be meaningless unless the Lib Dems join Labour in a vote to scrap this cruel tax on bedrooms.”
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NATIONAL:A third of calls for homelessness assistance go unanswered
Homeless charity Shelter has warned it can no longer keep up with demand for its helpline after a dramatic rise in families seeking help to pay for homes.
Benefit cuts and rising pressures on household budgets have driven a surge in the number of people on the brink of homelessness and a huge rise in callers seeking advice on rent and mortgage arrears.
The longest squeeze on incomes for decades has meant more people are struggling to stay on top of their housing costs, Shelter says. The number of callers to its helpline battling rent arrears has more than doubled since 2011 with a sharp rise in people calling in about mortgage arrears.
The total number of calls has risen by 20 per cent over that period. Shelter says almost a third of calls go unanswered and has launched an appeal for funds to help it provide advice to people "living on a financial knife-edge". It warns that with many household budgets so tight, "a job loss or serious illness can be all it takes to tip someone into a spiral that ends in homelessness".
Campbell Robb, Shelter's chief executive (pictured) said: "Every 11 minutes, a family in Britain loses their home. With more and more people having to stretch their finances to breaking point in a bid to makes ends meet, it's not hard to see why.
"But as more people come to us desperate for support, sadly our helpline is also being stretched to its limits."
Shelter says its team of advisers heard from more than 124,000 people in need of support last year. But nearly 54,000 calls went unanswered.
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NATIONAL:Blog: Why changing the borrowing rules is still a top priority
How do we boost the supply of new homes? John Perry, CIH policy adviser, says the options for change in the run-up to the general election have never been greater. Here he sets out why changing the borrowing rules is an option worth considering.
Earlier this month, 50 councils and ALMOs from across the East Midlands came together to talk about boosting housing supply. In his report of the event, Matthew Warburton of ARCH made clear that these local authorities – of diverse types and sizes – all had plans to build more homes. Several were concerned about recent stories in Inside Housing and the Spectator that claimed many councils were not planning to use their spare borrowing “headroom”. Allegedly, “four out of 10 local authorities had no plans to put a single penny to good use”.
Now that council housing is self-financing, the sector has the potential to borrow up to £20 billion for new investment within the prudential borrowing rules that apply across local government. When self-financing was originally planned by the previous government, it was intended to allow sufficient capacity for councils to build 10,000 new homes per year. But the eventual settlement, that took effect in April 2012, limited councils’ extra borrowing to only £2.8bn, which means that they should be able to gear up to building just 3,000 homes per year. This is a big improvement on what councils were doing only a few years ago, but is far short of what could potentially be achieved.
To anyone who has seen the chart of how the borrowing headroom is spread across the 169 councils that have housing stock, it’s pretty obvious that there is a strong case for change (see diagram below). Although Inside Housing points out that the picture has changed slightly because some debt has now been repaid, around half of all councils can only borrow up to an extra £10m per year. This sounds a lot, but of course is only sufficient to build 80-90 new homes over the 30-year life of their business plans. Some councils with long waiting lists have no spare borrowing capacity at all; many have just enough for the investment they need to make in their own stock so that it meets the Decent Homes Standard.
Distribution of HRA borrowing headroom between 169 local authorities, April 2012
The case for change has been brought up-to-date in the latest CIH policy essay Why is it important to change local authority borrowing rules? It not only sets out in more detail how such a change would boost housing output, but has suggestions about how it could be done and how changed rules would fit within a new government fiscal framework. It offers two options for removing the current restrictions, and says that either could pave the way for councils to build around 15,000 homes per year within five years.
The importance of this issue now is obvious. We need to build at least 200,000 homes per year in England and we are going to struggle to reach that target. While housing associations will have the biggest responsibility in the social sector, and need to raise their game to build at least 60,000 per year, councils will have to gear up too. Building levels of around 200,000 per year have only been achieved in the past with a significant input from social landlords, and councils can’t contribute if their borrowing is artificially held down. The rules need to change, and soon.
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NATIONAL:Generation Rent launches tenancy deposit protection discussion paper
Generation Rent has launched a discussion paper on reforming tenancy deposit protection.
The move follows another scandal around a criminal letting agent that fraudulently used renters’ money that was ‘protected’ under an insurance-based scheme.
The agency Masella Coupe took £304,000 of tenants’ deposits from an account protected by insurance-based scheme MyDeposits, using they money for other purposes when they needed it over a two-year period between 2009-2011.
Although the fraud was eventually exposed by auditing by the MyDeposits deposit protection scheme, the agents were able to cover themselves by depositing cheques they knew would later bounce. This allowed the bank account to show briefly the required figures required to pass the MyDeposits inspection.
The agents have now been prosecuted but the case shows the inherent problem with protection schemes that allow letting agencies to hold tenants’ deposits as though it were their own, leaving the money exposed to unscrupulous individuals and organisations.
It follows a case from earlier this year which saw rent-to-rent landlord Daniel Burton disappear with thousands of pounds of renters’ money. He had also been a member of the MyDeposits scheme, but was expelled, leaving the money unprotected.
Generation Rent is consulting on how deposits could be better protected, starting from the point that this is not the landlord or agent’s money. Rather, we argue that renters should feel secure that their money is protected at all times, and that arbitration processes should be improved to work better for those living in the private rented sector.
We set out a number of options to ensure that renters can have full confidence that their deposits will be safe, that they will be dealt with fairly and that they can get them back in a timely manner at the end of a tenancy.
Our proposals include:
- Treating deposits as savings accounts attracting tax relief
- Giving tenants the right to choose which scheme is used
- Standardising terms of arbitration
- Alternative deposits, including bonds and tenant-purchased deposit insurance and the right to secure against your pension pot.
- Obligations for claims against deposits to be lodged speedily and penalties for unfounded claims. A right to a refund if a landlord fails to spend claimed monies on repairing alleged damage.
Generation Rent would like to hear from private renters, housing groups and those interested in improving policy in this area about the ideas outlined in the consultation and any other suggestions you might have. The final proposals will then be put to Government and working with decision makers to improve this area for renters.
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NATIONAL:Residential Landlords Association rejects ‘alarmist’ rent data
The Residential Landlords Association (RLA) has rejected “alarmist” rent data produced by LSL as “wrong and dangerous”.
Figures published last week by LSL suggest that over the past year, rents across England and Wales have increased by 1.4 per cent.
The RLA however said the data was undermined by the more comprehensive and independent data from the Office for National Statistics showing rents between March 2013 and 2014 have increased by just 1 per cent over the year whilst inflation as measured by RPI was 2.5 per cent and by CPI at 1.7 per cent over the same period.
The organisation is also distancing itself from LSL’s assertion that landlords are making substantial returns.
Official figures show that 79 per cent of all landlords earn less than a quarter of their income from letting properties with 21 per cent earning no income at all from it.
This was confirmed by the findings of a report for the RLA by Professor Michael Ball of Reading University who has concluded that current returns in the private rented sector are “extremely low and are likely to remain so”.
He added: “The resultant damage to the private rented sector could be huge, because the availability and cost of privately rented accommodation depends on landlords’ making viable returns on their investments.”
More recently, an analysis by the Daily Telegraph has warned also that a number of buy-to-let landlords “could see their cash flow turn negative as early as 2017 if interest rates rose to the levels hinted at by the Bank of England Governor, Mark Carney”.
Responding to the LSL data, RLA vice chairman, Chris Town said: “Whilst many have chosen to cherry pick the data on rents they want to use to suit their argument, the reality is that the most comprehensive, ONS data shows clearly that rents are increasing by much less than inflation.
“Whilst there are some pockets of the country, especially in London, where rents are increasing substantially this is as a result of a chronic lack of supply of homes to rent, not landlord profiteering. It would be wrong and dangerous to make assumptions for the whole country based on London and the South East Alone”.
Turning to LSL’s assertions on landlord returns, Chris Town (pictured) added: “On returns, LSL’s figures fail to outline the considerable costs that landlords face in managing, maintaining and repairing properties. With interest rates likely to increase in the near future prospects for landlord finances remain uncertain.
“The reality is that landlords have to make some return to cover their costs. The question for those who spend so much time bashing landlords is what return they feel is reasonable for landlords to make. Only then can we have a sensible debate.”
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National: Big spending ‘not the solution to Britain's social problems’, says Ed Miliband
Labour cannot rely on its traditional high-spending approach to social problems if it wins the general election, Ed Miliband has told the party.
In a speech intended to Labour's national policy forum on Saturday, the Labour leader stressed that balancing the books will be a key element of the party's plans for the five years after 2015.
He also insisted that the need to adapt to austerity has made Labour "more radical and more ambitious" and that the party is still committed to fundamentally reshaping the economy.
Mr Miliband argued that, although problems such as low pay and poor conditions have got worse since the coalition came to power, "they started before the recession and the answer cannot be our traditional answer of spending to fix the problem".
Addressing the meeting in Milton Keynes, Mr Miliband said: "You and I know we won't have the money. For all of the cuts, for all of the pain under this Government, Britain still has a deficit to deal with and a debt to pay down.
"That's why our programme starts with a binding commitment to balancing the books in the next Government.
"We will get the national debt falling as soon as possible in the next parliament. And we will deliver a surplus on the current budget."
Highlighting proposals such as those for a higher minimum wage, freezing energy bills and action to end the abuse of zero-hours contracts, Miliband will argue that the party has "moved on from New Labour" without returning to the policies of old Labour.
"Instead, our programme for government is more radical and more ambitious in the change we seek, crafted for the age we are living in and the challenges we face," he said.
"Moving on from a time when rising inequality was just a fact of life – or when we acted as if there is nothing we could do about markets that aren't fair or aren't working. Not seeing big spending as the answer. Not going back to make do and mend."
He said that a changed Labour must be more ambitious in seeking to deliver greater equality and fairness by reshaping fundamental elements of the economic system, in areas ranging from the banks to energy markets, skills, housing and pay.
He added that the key "generational question" next May will be which party can "change the country so that it works not just for a few at the top but for ordinary families once again", and argued that it is Labour, rather than the coalition parties, who have an answer.
NATIONAL:Tesco to build 4,000 homes on land
Tesco has revealed plans to build 4,000 new homes on land that was once earmarked for supermarkets.
The company has scheduled the construction of the homes on its land by 2017. This will primarily be in the South East of England, with schemes in Welwyn Garden City and St Albans, although developments are also planned in the North and West of England.
A Tesco spokesman said: “We are currently working on plans for over 4,000 homes across the UK, either by building them ourselves or selling our sites to housing developers.
“In places where we have already delivered housing schemes, for example in Faversham or Highams Park, the feedback from local communities and councils has been very positive. We are pleased to be bringing new investment to communities up and down the country and playing our part in meeting local housing needs over the coming years.”
Tesco said the development strategy is in response to changing customer shopping habits.
The spokesman said: “We have decided to reduce the amount of new store space we build each year, building fewer large stores. Where we no longer intend to develop sites, we sell them, lease them or develop them for housing.”
The plans follow criticism of the retailer for hoarding land in the UK on which an estimated 15,000 homes could be built.
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NATIONAL:NLA challenges homeless charities to do more
The National Landlords Association (NLA) has challenged homeless charities and agencies to think more like landlords to help the homeless in to private housing.
The comments were made by chief executive Richard Lambert, at the Homelessness Link National conference Under One Roof earlier this month to discuss how to enable greater access to affordable housing for the homeless.
Mr Lambert (pictured) said that, with the number of landlords prepared to home the vulnerable, homeless and ‘hard to house’ diminishing, homeless agencies needed to look beyond simply supporting their client to supporting and sustaining the tenancy.
He cited recent reductions to Local Housing Allowance (LHA) rates and the removal of direct payments as the main drivers behind a decreasing confidence in providing homes for the vulnerable.
Mr Lambert outlined three main areas for agencies to focus their efforts:
- Pre-tenancy assurances – most homeless people will not pass standard referencing checks so what can be done do to provide landlords with as much knowledge as possible, so they know who they are dealing with and whether they can cope?
- Mitigating the risk – what can be provided in the way of deposit bonds or financial incentives that would provide the equivalent sense of reassurance that the financial risk is covered in the worst case scenario?
- Support for sustaining the tenancy – how and what kind of support can be offered from the very start – and throughout – so the tenant understands what is expected of them and knows what to do if they encounter any issues or difficulties?
“The question is “what can be done to increase landlords’ confidence in letting to the homeless and most vulnerable?”
“It is not enough simply to get a roof over someone's head and consider the job done - things must be set up from the start so that the tenancy is in the best position to be sustained. Homeless agencies must be able to provide the assurances and safeguards that landlords seek, which means thinking about their needs as well as the tenant’s.
“Deposit bonds that mitigate some of the financial risk; support and training throughout the tenancy for both landlord and tenant; and more in-depth tenant referencing so the landlord has an idea of who they are dealing with; these are all examples of things that would go some way to increasing confidence and the supply of available and affordable homes for the ‘hard to house’."
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NATIONAL:Blog: Housing in the reshuffle: big shoes to fill, and an even bigger challenge
By Steve Akehurst at Shelter
Last week’s reshuffle was a mixed bag for housing: the good, the bad and the unknown.
On the positive side of things, the housing portfolio was combined with planning and returned to Ministerial status – after being demoted to Undersecretary level last year. This starts to reflect how important housing has become as an issue to voters and politicians alike. Housing is now consistently a top 5 voter issue (YouGov) and for the first time in years it looks like it’s going to be a big issue at a general election.
It’s little wonder why. On the same day as the reshuffle, new research by the IFS that showed home ownership among young people has halved in the last twenty years. And it’s only going to get worse on current trends. This is worrying not only those affected, but their parents too.
Less good was the loss of Nick Boles, a Planning Minister who had shared Shelter’s understanding of those affected by the housing crisis and some of the possible solutions for tackling it. Boles has been one of the best allies those affected by the housing shortage have had in Government in recent years. Though we didn’t always agree with him on everything – we’ve always said solutions need to go beyond planning reform alone – he grasped the urgency of the housing shortage and its consequence for the aspirations, security and wellbeing of an entire generation – and he made the argument in those terms. Often against pretty entrenched vested interests. It’s a shame this fight seemed to take its toll.
We also lost Kris Hopkins from the housing brief, who stays within CLG but without the housing portfolio. Again, we haven’t agreed with Mr Hopkins on everything, but it was under his stewardship that improving private renting has risen up the government’s agenda. He has initiated impressive reforms that we are optimistic will continue to flourish.
In particular, it has been during his time in office that the government has started to consider introducing a ban on ‘revenge eviction’ – where renters who report poor conditions to their landlord or local authority are served an eviction notice. There is now a Private Member’s Bill on the cards that could change the law to introduce this ban: a change that would improve the lives of hundreds of thousands of private renters.
Which brings us to the unknown: Brandon Lewis, our new Minister of State for Housing and Planning. He has already been working within the Department for Communities & Local Government, so he should be familiar with the issues.
But even so, he will need to get up to speed quickly. He faces a housing shortage that is reaching crisis point – if nothing is done, half of all under 35s will be living in their childhood bedrooms by 2040 – and yet CLG’s own figures predict a drop off in the number of new houses built next year. We’re still not even building half of what we need.
Furthermore, he is responsible for oversight of a private rented sector in which a third of all homes fail to meet his Government’s own standards, and a third of all renters are on 6- or 12-month contracts.
Mr Lewis might also have to contend with increasingly disgruntled councils who will find themselves with less and less money available over the next few years to help those in dire need of housing support. Big problems lie ahead as the funding for Local Welfare Assistance Schemes is being scrapped next year and the future of Discretionary Housing Payment funding is worryingly unclear.
All in all, there can’t be many more urgent areas of policy facing the next 10 months of this Parliament.
It’s just as well for Mr Lewis, then, that help is at hand. Shelter have worked with KPMG to provide the blueprint he needs to start building the homes we need. We’ve also set out how he can make the private rented sector more stable and improve conditions for those living in it. And we’ve even given some thought to how the welfare state can be reformed to help everyone in housing need.
The new Housing Minister has a lot on his plate, but also a huge opportunity to make progress on one of the biggest issues of concern facing voters, and get credit from them for doing so. As ever we’re standing by to help.
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NATIONAL:Government issues guidance to help tenants lead change
The Tenant Empowerment Team of the Department for Communities and Local Government (DCLG) has issued guidance on a number of ways tenants can get involved in making their neighbourhood a better place to live.
The Tenants Leading Change leaflet aims to help council and housing association tenants understand in simple terms what their options are as a tenant.
The guidance can help set up a tenant panel and offers advice on Community Cashback, which means tenants can earn cash for their community by taking on the management of services like cleaning or grass-cutting.
It also helps tenants manage where they live by explaining their Right to Manage.
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