Posts with tag: council tenants

Council leaders call for Right-to-Buy reform

Published On: August 11, 2016 at 9:24 am

Tags: council tenants,Local Government Association,right to buy,tenants

Council leaders in England have today called for the Government to make reforms to the right-to-buy scheme in light of new figures.

Analysis completed by the Local Government Association reveals that 12,246 council properties were sold to tenants under the scheme in 2015/16. However, just 2,055 replacements were started by councils, a fall of 27% on the previous year.

Right-to Buy

The Right-to-Buy scheme was designed to allow low-income tenants to purchase their council-owned home at a discounted price.

Since its inception in the early 1980’s, nearly 2m properties have been sold to these tenants by councils across England. As a result, the proportion of homes that are social housing have fallen from 31% to 17%.

Numbers of people using the scheme were on the downturn, until the Government re-launched the scheme in 2012, offering quadruple discounts for London tenants.

The scheme has already been scrapped in Scotland, with the Welsh assembly also confirming plans to abolish it. Now, the Local Government Association has said that the scheme could become defunct in England, if more is not done to fund replacement homes.

Replacements

Representing 370 local authorities across England, the Local Government Association said it expects 66,000 council properties to be sold to tenants by the year 2020. Councils are expected to struggle to replace many of them.

A further 22,000 properties will be sold should councils be forced to offload higher-value properties to fund an extension of the scheme to housing associations. In their manifesto before last year’s general election, the Government promised to make discounts available to 1.3million housing association tenants.

The Local Government Association warns that a fall in council homes would exacerbate the housing crisis, with an increase in homelessness and spending on housing benefit.

Council leaders call for Right-to-Buy reform

Re-launch

Since the re-launch, the Government has pledged to provide one-for-one replacements for additional homes sold. The Local Government Association said that prompt reform is necessary to ensure councils replace stock efficiently.

The Association believes authorities must keep 100% of receipts from sales, as opposed to the one-third they can currently retain. In addition, it has called for discounts to be set to reflect regional variations in property values.

Nick Forbes, senior vice chair of the Local Government Association noted, ‘Right to Buy will quickly become a thing of the past in England if councils continue to be prevented from building new homes. Housing reforms that reduce rents and force councils to sell homes will make building new properties and replacing those sold even more difficult. Such as loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending.’[1]

Commitment

The Department for Communities and Local Government (DCLG) said that the Government was prepared to undertake action to ensure the provision of additional homes.

It noted, ‘we’re committed to building the homes this country needs and investing £8bn to build 400,000 more affordable homes. There is a rolling three-year deadline for local authorities to deliver an additional affordable home and so far they have delivered well within their sales profile.’[1]

‘However, we have always been clear that if local authorities don’t start building replacement homes within the three-year deadline, then we will step in and build them for them.’[1]

[1] https://www.theguardian.com/society/2016/aug/11/right-to-buy-reform-urged-as-council-leaders-fear-for-social-housing?CMP=share_btn_tw

Council Tenants Lose Right to Live in Their Home for Life

Published On: December 11, 2015 at 1:52 pm

Author: Em Morley

Categories: Property News

Tags: council homes,council tenants,homeownership,housing association tenants,social housing

Council tenants will lose their right to live in their homes for life under plans to impose a five-year limit on new tenancies.

Council Tenants Lose Right to Live in Their Home for Life

The proposal has been condemned by the Labour Party, which believes the move will break up communities. However, the Government has quietly tabled an amendment to the Housing and Planning Bill that sets a maximum of five years for new tenancies.

The new rule removes the standard of lifetime council tenancies. In some cases, tenants are even allowed to pass on the right to live in the property to their next of kin. Despite the new policy not applying to current tenancies, those that inherit a council house tenancy will be subject to the new system.

Explaining, Housing Minister Brandon Lewis states: “A secure tenant can currently live in a property for life. This amendment phases out lifetime tenancies.”¹

David Cameron first proposed the move in 2010 when he argued that it could help increase social mobility.

He admitted that “not everyone will support this and there will be quite a big argument”. However, he said: “There is a question mark about whether, in future, we should be asking when you are given a council home, is it for a fixed period? Because maybe in five or ten years you will be doing a different job and be better paid and you won’t need that home, you will be able to go into the private sector.”¹

The coalition government never enforced the plan, with the then housing minister, Grant Shapps, revealing plans to allow tenancy limits to be set in each local area.

The new legislation forces local authorities to offer all new tenants contracts of between two and five years. At the end of the fixed term, councils must conduct a review of the tenant’s circumstances and decide whether to grant a new tenancy, move the tenant to another more appropriate social rental property or end the tenancy.

If the council decides to terminate the tenancy, they must offer advice to support the tenant into homeownership or help them access other housing options, whichever is suitable.

Labour’s Shadow Cabinet Minister for Housing, John Healey, has criticised the plan, saying people will be “astonished that ministers are legislating to deny families a stable home”.

He continues: “Councils are already able to decide on the length of tenancy they want to offer according to local needs. Margaret Thatcher passed the law to give council tenants secure tenancies, which David Cameron is now tearing up. This generation of Tory ministers seem to have a vendetta against council tenants and council homes.”¹

A Department for Communities and Local Government spokesperson insists the changes will “improve local authorities’ abilities to provide social housing for those who need it most, as long as they need it”.

They add: “This is about ensuring we make the best use of our social housing and that tenancies change as needs change. We want to support households to make the transition into homeownership where they can.”¹

It is believed that the Government changed the law as ministers feel that councils are not making effective use of their powers to offer fixed-term tenancies.

The law does not currently apply to housing association tenants.

¹http://www.theguardian.com/society/2015/dec/09/council-tenants-lose-lifetime-right-to-live-in-property

Councils Pay Landlords £4,000 to House Tenants

Published On: April 23, 2015 at 10:58 am

Author: Em Morley

Categories: Landlord News

Tags: council tenants,landlord incentives,local housing allowance,private landlords

Councils are paying private landlords up to £4,000 to house homeless tenants, as a shortage of social housing has forced authorities to entice the private sector with the incentives.

This news arrives as the Conservative party pledge to extend the right to buy scheme, which allows housing association tenants to purchase their home. This could worsen the housing shortage by selling around 1.3m properties, with councils struggling to replace them. Find out more here: /how-would-the-conservatives-right-to-buy-work/.

Councils in London and the South East are now advertising to private landlords with attractive cash incentives. Westminster Council in central London will pay up to £4,000 for landlords who accept council tenants. Tower Hamlets in East London has publicised a £2,500 payment for one-bedroom properties rented for two years by council tenants and £4,000 for two or more bedroom homes.

In Haringey, North London and nearby Barnet, private landlords are being offered payments of up to £3,000 for two-year tenancies. Southwark Council in South London will pay up to £2,000.

Housing charity Shelter says that these offers indicate a power switch between councils and landlords. Policy Officer at Shelter, Zorana Halpin, says: “Landlords don’t need local authorities, but local authorities need them.”

These cash incentives highlight the struggles that councils are already facing housing homeless families and individuals.

Councils Pay Landlords £4,000 to House Tenants

Increasing rents in the private rental sector and the cuts to housing benefit in 2011, have made landlords less likely to rent to council tenants, yet local authorities are finding it difficult to house the growing number of households dependent on this accommodation.

More councils have launched or increased cash incentives to landlords. November saw Hounslow Council in West London raising its payments, and in March, Basildon Council in Essex announced that it would start paying £1,000 for 12-month agreements and £1,500 for two-year tenancies.

Councils are so concerned over the lack of housing stock that payments are often made for homes in different boroughs.

Westminster Council said that it has paid landlords with properties outside London in the hope of housing people on its waiting list.

Housing consultant David Lawrenson says that landlords consider council tenants to be higher risk than private renters, and increasing rents in the private sector are more financially appealing.

For example, in Haringey, the average rent for a two-bedroom home is £1,556 per month, yet the maximum local housing allowance (LHA) for the same property is £1,109.

Lawrenson says: “There is supposed to be some kind of agreement to stop councils competing with each other, but these landlord incentives suggest that they are not working, as they still seem to be competing with each other to try to get that stock in. It’s only going to get worse as rents continue to rise.”¹

The highest payments are made to landlords who take on council tenants for long-term contracts. The rent on these agreements is paid for in housing benefit claimed by the resident. Other schemes are open to landlords who let to council tenants for up to five years. In both situations, if the landlord did not take the tenant, then they would have to be housed in temporary housing such as a B&B.

Landlords who enter the schemes are not given a deposit, but could have to use the cash payment at the end of the agreement to make any repairs. However, the money is theirs to do as they please.

Benefits for 12-month tenancies are paid for by LHA, but this was cut in April 2011, making private renters more attractive to landlords.

Halpin says: “Local authorities used to procure large volumes of temporary accommodation from private landlords through leases; the rents they could pay were in line with market rates and it meant no void periods for landlords, so councils had a bit of negotiating power and the deal was attractive to landlords.”

Halpin explains that councils’ buying power has decreased: “The fact that councils are prioritising their spending to make sure people are being housed is a good thing, but we are concerned that they have limited resources and are having to use some of them to pay these incentives. Ultimately, the only long-term solution is to build more affordable homes.”¹

Head of Policy at the Chartered Institute of Housing (CIH), Melanie Rees, says that councils have been given more freedom to help house homeless people by making use of the private rental sector, despite benefit cuts reducing the rents paid to private landlords.

She says: “But welfare reform, in particular the benefit cap, has cut the amount of benefits that people receive and made private landlords in some areas more reluctant to let to claimants.

“In some areas, offering incentives to private landlords may well be cheaper than using temporary accommodation, and a better option for the tenant than being stuck in a poor quality B&B.”¹

¹http://www.theguardian.com/society/2015/apr/17/councils-pay-private-landlords-up-to-4000-to-house-tenants