Margaret Thatcher and the right to buy

Some of you may be able to remember when Margaret Thatcher’s government introduced the right to buy scheme back in the 1980s, a mandatory scheme forcing social landlords to sell properties to their tenants at a massive discount.

It turned the whole country into a nation of homeowners and in the process completely changed the demographic of the UK’s housing market. I can’t say for sure if the UK is the only country in Europe to be obsessed with home-ownership but if we aren’t way out front we have to be in the top flight.

I just got back from a short trip to stay with friends in Marbella and was shocked at the rent levels in Spain where renting is far more common than here. They were renting out a 3 bed house with shared swimming pool and tennis court, right down in the heart of the millionaire’s Costa Del Sol for 375 Euros a month.  That’s around £330. Why would you bother to buy?

Now the right to buy was a fantastic opportunity for thousands of families. I knew plenty of active socialists at the time who campaigned against it, sold papers and wore badges but still made sure they bought theirs so as not to be left out.

The problems for social housing started then because everyone who could afford it snapped up their properties and social housing stock numbers dwindled proportionally. Easy solution you quickly reply…..use the money the council’s made from selling to build more social housing. The problem is, the right to buy scheme came with a massive caveat, council’s weren’t allowed to use the money they made to build new properties.

Result….hardly any council housing left, but still a statutory duty on local councils to supply housing. For instance my local authority have 1,400 homes available and 17,000 people on the waiting list, – am still astonished at how durable the myth is that if you grow up in an area you will one day get a council house there.

So how do councils fulfill their housing duties now? That solution is easy. Council’s look to private landlords to provide accommodation that they can’t provide themselves. The market is huge and councils struggle to find enough properties. It isn’t that the properties aren’t out there. If you are a small landlord going it alone and not using an agent, you might find searching for tenants a permanent stress. The council has the tenants and needs the properties.

Homelessness duties

When a person approaches the homelessness unit they can go through 2 routes:-

• Assessments
• Prevention.

Homelessness assessments

I won’t bore you with the details (and believe me, they truly are boring) but the council has to apply 5 tests to any homeless applicant. If they pass all 5 tests then a statutory duty arises and the council has to find accommodation for them. This is why they need your properties because without them they cant fulfil their duties and will be breaking the law.

Prevention

The other route is where an applicant applies as homeless and the council can avoid the assessment route and prevent homelessness without having to go through the 5 tests and simply put a would be tenant and a landlord together, result? Homelessness prevented.

So again they need your properties.

Who takes on these properties?

Most councils have a person or a team usually called ‘Procurement’, their job is to find suitable properties to refer tenants to.

Every local authority will run slightly different schemes based on the needs of their area and the housing strategy of the council itself.

For many years now Private Sector Leasing Schemes (PSLs) have been quite popular in some areas. Commonly the council take you property off of your hands for a fixed period such as 3 or 5 years. They use it to house their tenants, paying slightly less than market rent levels. They take care of everything. If the tenant doesn’t pay the rent, you still get paid and the arrears are the council’s problem.

If the tenant ends up smashing the place to pieces the council repair it and it is not your concern. You get to sit on the property and let the equity accrue over time without the normal headaches of letting management.

Some councils will pay deposits and rent in advance for tenants they place with a landlord, some incentivise in different ways by offering bond schemes or housing benefit in advance.

Many councils have specific projects, such as finding accommodation for ex offenders or refugees. Some may be looking for landlords willing to take on tenants with learning difficulties or low level mental health issues and will often provide external support for what is termed ‘Tenancy Sustainment’.

Sedgemoor council in Somerset works with the local YMCA and trains young people who live in temporary accommodation to manage their finances and the art of being a decent responsible tenant. They get banded into bronze, silver and gold and when at gold level they introduce them to local landlords who have some assurance that letting to young people isn’t going to lead to disaster.

There are so many schemes out there and all you have to do to find out is ring your local housing department and ask to speak to anyone who takes on properties from private landlords. They will bite your hand off.

Speaking to procurement officers I know in London (yeah sorry to be so London-centric but it is where I live) they tell me that they tend to have more 3 and 4 bedroom properties than they need and are short of 1 and 2 bed.

Don’t expect every scheme to provide depth of support though. Many of them will simply act like a letting agent. put you together with a prospective tenant and leave you to get on with it. Unlike an agent however you wont have to pay any fees for it.

So if you have property to let, are tired of finding tenants yourself, don’t want to risk using what might turn out to be a dodgy agent or just have a well developed social conscience, then you could do worse than think of renting through the council.

Ben Reeve-Lewis

About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all

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As reported on this blog previously, landlords and landlords organisations were extremely unhappy at the changes which were brought in to the planning laws on 6 April this year by the last government.

Suspected to have been introduced largely because of problems in one minister’s constituency with ’studentification’, Labour’s new rules provided a blanket obligation on all landlords of new HMOs to obtain planning permission.

Labour’s changes were brought about by introducing a new C4 planning class which covered all HMOs of up to six people, bringing the definition of HMO for the purposes of planning in line with those used in the Housing Act 2004. However this was strongly criticised as being unnecessarily bureaucratic. Although some areas do have major problems with ’studentification’, these areas are comparatively few.

The net result, many feared, would be to reduce cheap accommodation for sharers in areas which needed it, as landlords would be deterred by the extra administration and expense. It would also place a huge burden on local authorities having to deal with the extra planning.

The solution proposed by the new government is to leave the new planning class, but allow landlords to rent properties as HMOs in most areas without having to apply for planning permission. In areas where there is a need to control HMO development, local authorities will be able require planning applications for changes of use.

The announcement on the CLG website states

This will enable high concentrations of HMOs to be controlled where local authorities decide there is a problem, but will prevent landlords across the country being driven from the rental market by high costs and red tape.

It is estimated that as many as 8,500 planning applications could be submitted each year if every landlord looking to turn their property into a HMO is first required to seek permission – instead, councils will be able to focus their efforts in particular neighbourhoods where HMOs present a problem, while landlords of HMOs in other areas will not be tied up in red tape.

The proposed changes will not be introduced until 1 October. It is hoped that in the meantime Local Authorities will go easy with landlords and not pursue them for planning applications in areas where this is not going to be required post 1 October.

Information is gradually filtering through about the current coalition governments intention for housing law reform. Basically they aren’t going to do any!

Grant Shapps said in the House of Commons yesterday :

It is important that we strike the right balance between tenants and landlords. The current legislative framework, which I have been looking at closely, does exactly that. We therefore have no plans to take forward the previous Government’s ideas about further regulatory measures on this subject.

The one thing which will be going ahead is the proposed change of the AST high rent limit to £100,00. This has already been set in motion, has almost universally hailed as a ‘good thing’ and, crucially, will not cost them anything.

However:

• The landlords register proposed by Labour will not now be going ahead. Landlords up and down the country will be cheering at this as the proposal was most unpopular

• Letting agent regulation also will not be going ahead. This is less popular (other than among cowboy letting agents) as regulation of the letting agency industry is something which agent bodies, such as ARLA have been calling for, for some time. Still, there is no doubt that it would have cost at least something, and could have been expensive, so it had to go

• Mandatory tenancy agreements would also have involved a cost as no doubt there would have to have been working parties to consider what if any prescribed terms they should have in them, so that is out of the window also

• The Mumsnet/Tripadvisor website was never seriously on the agenda and unsurprisingly there are no plans to implement this!

• Likewise the tenants advice line, although as has been pointed out, there are already services tenants can use, for example the Shelter helpline on 0808 800 4444.

• The planning law changes brought in by Labour look as if they are going to stay, although Mr Shapps has said he is going to ‘look at them’.

• Sadly, it looks as if this may be the death knell for the ill fated Law Commission Renting Homes Bill, and

• The government indicates that it will expect local authorities to deal with rogue landlords under the powers they already have rather than introduce new regulation.

Interestingly things may be different in Wales.  The PainSmith blog reports that the Welsh Assembly still wishes to go ahead with registering landlords and regulating agents and will be seeking authority to do this.

What are your views on all this?  Do you think it was always inevitable that these proposals be ditched, or do you think they should still have gone ahead?  If so, which ones do you think should have been kept?

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Homelessness and Allocations. 8th Edition

This may not be a book of much use to private landlords, although a glance between its covers would rapidly disabuse some of their conviction that ‘the Council’ will automatically help tenants that they evict. But for housing lawyers, advisors and indeed some local authority homeless unit officers, the LAG Homelessness book has long been the bible. Even now that there is strong competition in the form of Jan Luba QC and Liz Davies’ ‘Housing Allocations and Homelessness’, a new edition of ‘Homelessness and Allocations’ is a significant publication.

Andrew Arden QC has been joined by a new team of co-authors, Emily Orme and Toby Vanhagan, and they have collectively taken the opportunity to rework the structure of the book as well as add and revise material. This works well. Homeless and allocation law has changed significantly over recent years and there is always a fresh wave of case law, an old structure will end up creaking under the weight of additions and not suited for new issues.

The 8th edition has fused the discussion of public law into the homeless and allocation sections, so that it is no longer a discrete chapter. Public law remedies have a significant track record in this area now, so there is no need for an independent section on the operation of public law. There is a completely revised chapter on immigration and homelessness and on immigration and allocation. The chapter on allocations now also considers allocation by other providers of social housing.

Case law has been updated throughout, including a last minute note on Tomlinson v Birmingham City Council [2010] UKSC 8, a Supreme Court decision on whether the housing duty under the Housing Act 1996 was a civil right for the purposes of the Human Rights Act 1998, which was only handed down in February 2010. In fact there are more than 80 new decisions of significance added to this edition, affecting both homelessness and allocation law. The supplementary and new statutory guidance on homelessness and allocations respectively has also been addressed and also included in the appendices.

The basic structure remains unchanged however, and rightly so. The chapters on homelessness provide a logical breakdown of the qualification criteria for a full housing duty to be owed by a local authority and do so in a manner that effectively sets out a checklist for anyone dealing with a homelessness application. A chapter on the decision making process and the review process follows, then a chapter on the discharge of duty by the local authority. There is a section on appeals of the review decision to the County Court, contained in a chapter on ‘Enforcement’ generally. This could perhaps have been better signposted as the next step after a review in the chapter on decision making.

The chapter on allocations is relatively brief and has, if anything become even briefer as a result of case law since 2006. But it has been significantly updated and reworked and is as clear a guide to the duties of a housing authority on allocation as could be hoped for.

There have been some very important changes since the 7th edition was published in 2006, in particular in regards to allocations, with the growth of choice based letting schemes and the impact of R (Ahmad) v Newham LBC [2009] UKHL 7. These, together with the opening up of public law challenges to what are now private registered providers of social housing, following R (Weaver) v London & Quadrant, are all addressed in the revised edition and this is done with the clarity and concern over the practical effect of the law that characterises the whole book.

The following chapter on enforcement contains practical and detailed advice on the procedures for challenging decisions, or a failure to make decisions, in homeless and allocation processes. It covers Judicial Review, appeals to the County Court and mentions the alternative of a maladministration claim to the Local Government Ombudsman.

The remaining chapters concern other statutory provisions that may be of use if a homelessness application fails and discuss requirements on the local authority to have a strategy and to provide advice. The appendices include relevant statute and guidance as at January 2010, very helpfully gathered together.

Although perhaps no longer the only bible on this subject, ‘Homelessness and Allocations’ has long been one of the vital books for any housing solicitor or advisor. The updates to the 8th edition ensure that it remains so.

******

Giles Peaker, our reviewer, is an assistant solicitor in the Housing and Public Law team at solicitors Anthony Gold. Homelessness and Allocations can be purchased online from Amazon (affiliate link).

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As announced earlier this year (and reported by me here) the government has now changed the planning rules to require all HMO properties to get planning permission.  These new rules came into force yesterday (6 April 2010).  This brings the definition of HMO for the purposes of planning into line with those used in the Housing Act 2004.

The new rules do not, we are told, apply to existing HMO properties.  However, in future all properties with three or more unrelated people sharing, will require planning consent.

I am not a planning lawyer, so am not really qualified to comment on the details of the legislation.  This has been reported elsewhere, for example on the PainSmith solicitors blog.   There is also a guide on the Guild of Residential Landlords blog and you can find out more about the planning process generally from a helpful web-site planning-applications.co.uk.

However most of the reports I have read say that this will have a massive impact, that many landlords will withdraw altogether from providing HMO style accommodation (which will now include common situations such as three nurses sharing a flat), and that people who traditionally share accommodation with others, such as students, recent immigrants and young professionals, will find it increasingly hard to find somewhere to live.

Councils may also find it difficult to deal with the extra work involved.  Indeed it is reported that even without the impact of this,  legislation is being enforced inconsistently across the country by Local Authorities.  Steve Sims who runs a web-site called Property Investment Expert has written about this, and also claims to have found evidence from a CLG document about a secret database on landlords:

Also revealed is information about a confidential database maintained by an unnamed London council that rates shared housing owners as “good, bad or average” landlords – and landlords have no right of redress or access to what the database says about them.

No doubt a freedom of information request will bring forth more information.

It will be interesting to see however, whether these regulations, rushed through in haste just before an election, really will help the ’studentification’ problems (which are apparently quite severe in some locations), or whether it will just result in less affordable HMO accommodation being  available for people on limited means.