Another week another newsround. What have we for you today?
The cost of Right to Buy
I spotted this article recently on the CIH website which looks at the losses that are suffered by Councils forced to sell houses under the ‘right to buy’.
Discounts have risen to £1 billion a year which in turn is leading to a net loss of some £300 million. If the discount were cut then the CIH calculate that this could provide an additional 12,000 homes per year.
So this potential is lost to the social housing sector as well as the homes which are sold off. Which is crazy at a time when we are told that the housing crisis and lack of homes available to those in need is one our top political problems.
Since the right to buy discounts were increased in April 2012 69,467 homes have been sold while only 18,958 have been started or acquired to replace them.
CIH chief executive Terrie Alafat CBE said:
Not only are we failing to build enough new homes for social rent, we are losing them at a time when we need them more than ever. Our research shows that we lost more than 150,000 social rented homes between 2012 and 2017 due to right to buy and other factors, and that figure will reach 230,000 by 2020 unless we take action now.
This new research reveals just how much right to buy is costing the public sector every year. Suspending the scheme means the government could invest the savings in more homes for social rent – which is often the only truly affordable option for people on lower incomes – and also in fairer and more cost-effective ways to help tenants access home-ownership.
Universal Credit Rollout Delayed
Universal Credit has been much in the news recently, and not in a good way.
It looks, from this BBC article, as if the rollout is now going to be delayed again. The government is looking at ways to make the rollout cause less hardship but apparently, many of the suggestions have to be ruled out as they are not technically possible.
Its a mess, isn’t it?
HMOs now only suitable for specialists?
A useful article here which looks at and sums up the recent HMO changes. Points made include the following:
- Many landlords will have increased expenditure to comply with standards on things such as mains-powered fire alarms, fire check doors and fire escape areas
- New minimum room sizes will offer greater clarity but will also result in some accommodation needing to be withdrawn from the market – resulting in a fall in income for landlords affected
- This could also affect capital values and loan-to-value covenants of properties held as security for bank lending.
- Some investors may withdraw from the market which will result in a reduction in the supply of HMO accommodation, creating upward pressure on rents at a time when there is a need to increase affordable accommodation.
The article concludes:
The legislation is likely to further increase the specialist nature of HMO ownership, requiring a much more professional approach from landlords. The times of amateur investors buying HMO properties for possible high returns has passed. The need to understand and comply with the licensing requirements, as well planning legislation, means HMO ownership is now best suited to those with specialist knowledge of this sector.
Safer Renting is Highly Commended
Congratulations to Cambridge House’s Safer Renting Project (where Ben Reeve Lewis works) which has been commended in the 2018 London Homelessness Awards. They came through a field of over 30 applicants to make it to the final six.
Roz Spencer of Safer Renting said:
Eviction from private rented housing is a real concern and the primary driver of rising homelessness in London. We work with people in bottom-end private rented housing – that some might call slum rentals – to give them advice and support to prevent homelessness.
Lots of letting agents planning to quit?
A survey carried out by Fixflo indicates that the Tenant Fee Bill may be the final nail in the coffin for many letting agents who are now considering quitting the industry.
The survey is based on 401 survey responses so is probably too small to be a totally reliable guide but it is an indication of what might happen.
Of the 100 landlords also surveyed, around 70 of them indicated that they would not be selling up. But then landlords will be less affected by the ban than agents.
Snippets
- Nearly Legal now have an updated version of their section 21 flowchart (now with grey areas).
- A law firm has launched a class action against solicitors who acted for leasehold buyers now stuck with increased ground rents (although conveyancers claimed (in an article I am now unable to locate) that buyers often go ahead anyway despite being advised properly.
- A majority of US renters have no plans to buy considering renting to be more affordable