Housebuilders’ Costs On The Rise

 Housebuilders’ costs increased by 1.7% in 1Q 2021 and by 3.6% between 1Q 2020 and 1Q 2021 according to the BCIS Private Housing Construction Price Index (PHCPI). Housing construction output grew by 2.7% in 1Q2021 compared with the 4Q 2020 but fell by 1.2% on the annual basis. Majority (94%) of respondents to the survey reported increases in costs. Of those, 44% stated increases in cost of materials, 37% indicated changes in both labour and material costs, 13% stated sub-contractors’ costs while 6.0% indicated labour costs. Insulation, aggregates, timber and timber products, steel as well as shortages of building materials, higher costs of transport, energy and labour costs/availability remain among the key cost pressures mentioned by respondents. Read more on the RICS website.

https://www.rics.org/uk/products/data-products/insights/private-housebuilders-costs-continued-to-increase-in-1q-2021/

Leaseholders Given Two Months To Find £30,000 For Cladding Work

Leaseholders at a development in Manchester have been given two months to find around £30,000 each for cladding and repair works, with the management company pointing to Building Safety Fund rules to explain the tight deadline. Residents in one block on the development that does not require cladding remediation are still being asked to stump up tens of thousands to allow works to go ahead as soon as possible. Read more on Inside Housing.

Inside Housing - News - Leaseholders given two months to find £30,000 for cladding work

Grenfell Costs Surpass £500m As Council Bill Revealed

The public costs of the Grenfell Tower fire have exceeded £500m after the Royal Borough of Kensington and Chelsea revealed it had spent £406m on its response and recovery efforts in almost four years since the disaster. The sum is in addition to the costs to the taxpayer of the ongoing public inquiry, which hit £117m by the end of March this year, most of which was taken up with lawyers’ bills. The figures stand in stark contrast to the £300,000 saved in a cost-cutting exercise during the refurbishment of the 24-storey council block that led to combustible aluminium panels being substituted for the planned non-combustible zinc on the exterior of the block. Read more on the Guardian website.

Grenfell costs surpass £500m as council bill revealed | Grenfell Tower fire | The Guardian

Building Safety Fund (2) – Parliamentary Written Answer

Dr Matthew Offord: To ask the Secretary of State for Housing, Communities and Local Government, whether the Government plans to recoup the costs of the Building Safety Fund from residential property developers.

Christopher Pincher: as announced on 10 February 2021, we are going to introduce a developer levy through the Building Safety Bill to be targeted and applied when developers seek permission to develop certain high-rise buildings in England. In addition, we will introduce a new tax for the UK residential property development sector in 2022. The levy and tax will ensure that the largest property developers make a fair contribution to the remediation programme. The Government will consult on the policy design of the tax in due course.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2021-02-11/153224

Temporary Accommodation Costs Councils Over £1bn In Just One Year

Councils have spent just over £1bn on temporary accommodation over a single year, new stats show. The government-released figures reveal more than 30% of the total – £344m – was spent on emergency B&Bs. Shelter chief executive Polly Neate said the stats were “shocking but entirely preventable” and meant social housing must be at the heart of every manifesto. “And all parties must to commit to at least 90,000 new social homes a year over the next parliament – if they don’t, all of us will pay an even higher price,” said Neate. Overall council spending on B&Bs has increased by 111% in the last five years. Read more on 24housing.

https://www.24housing.co.uk/news/temporary-accommodation-costs-councils-over-1bn-in-just-one-year/

Licensing ‘Fails’ Tenants And Good Landlords

The Residential Landlords Association (RLA) have responded to research published by Direct Line revealing that the costliest landlord licensing schemes are 21 times more expensive than the cheapest. The researched report analyses licensing charges between local authorities, showing a large variance, with the cost of a new licence ranging from just £55 to £1,150, 21 times more expensive. In Liverpool, the cost of a licence for a first property is £412, whereas in Salford it is over 51 per cent higher at £625. The report further highlights that the average landlord licence across the UK costs £591. Read more on 24housing.

https://www.24housing.co.uk/news/rla-licensing-fails-tenants-and-good-landlords/

Residents Avoid Re-Cladding Costs On £225m Scheme

Residents at a £225m Mace development in London found to have Grenfell-style cladding will not be forced to pay for its removal. Mace confirmed that remedial work would now be carried out on two blocks at the £225m Greenwich Square scheme but that it would come at no extra cost to residents. Last month, CN revealed the cladding on the development needed to be replaced after it was found to be category 3 ACM cladding, the most combustible of the three ACM cladding types. In the letter to residents seen by CN, Mace said that after “complex work” investigating the matter the company had decided that two blocks at the development will require remedial work. Read more on the Construction News website.

https://www.constructionnews.co.uk/10033213.article

Help to Buy Scheme – Parliamentary Written Answer

Royston Smith: To ask Mr Chancellor of the Exchequer, what the cost has been to the public purse of the Help to Buy ISA policy since the introduction of that scheme.

Royston Smith: To ask Mr Chancellor of the Exchequer, what the cost has been to the public purse of the Help to Buy policy since the introduction of that scheme.

Stephen Barclay: From the introduction of the Help to Buy: ISA on 1 December 2015 to 31 March 2017, the total value of bonuses paid was £54m. Between the launch of the Help to Buy: Equity Loan scheme on 1 April 2013 to 31March 2017, the total value of equity loans provided through scheme was £5.86bn.

Call To Cut Cost Of Evictions

Government figures show 19,601 tenants were evicted by UK social landlords over 2016 – over 1,600 a month. The figures, from the Ministry of Justice, confirm that in England and Wales alone, 79,000 claims for possession were lodged with the courts, with 60% of which were from the social sector. In court fees alone, this resulted in a spend of £28m. With homelessness acceptances in England increasing to 59,250 last year one of the UK’s leading housing and support services companies says the approach of social landlords to sanctions against tenants can play a pivotal role in prevention – while at the same time significantly reducing spiralling escalation and possession costs. Read more on 24housing.

London Has Highest Landlord Costs In UK But This Is Offset By Higher Rent

London has been identified as the most expensive part of Britain to be a landlord, followed by the South East while the North East of England is the cheapest. The average cost for a landlord in London, excluding any mortgage and tax and including void periods, is £6,535 a year, or 32% of rental income, according to the research from lender Kent Reliance. This compares to the average cost nationwide of £3,632 per year for landlords but this is still a chunk of income, amounting to 34% of rent coming in as landlords get higher rents in London which is offsetting some of the higher costs. Read more on Property Wire.

Housing Benefit: Social Rented Housing - Parliamentary Written Answer

Tracy Brabin: To ask the Secretary of State for Work and Pensions, with reference to the Oral Answer of 14 November 2016, Official Report, column 30, what the entire amount spent by his Department was on every stage of legal action defending the under-occupancy penalty; and how many hours, at what cost, officials spent working on that case.

Caroline Nokes: The total legal costs of the proceedings in the High Court, Court of Appeal and Supreme Court in respect of MA & Others, Re A and Rutherford, which concerned the underoccupancy penalty, as of the 9 November 2016, when the Supreme Court judgement was handed down, was £484,077.94. This figure includes the costs of the Supreme Court proceedings in respect of MA & Others, Re A and Rutherford, as of the 9 November 2016, which was £206,842.65.

Homelessness Duty 'Would Cost Councils £44m'

Introducing a new homelessness prevention duty would initially cost English councils £44m a year in total, a report has found. A panel of housing experts, organised by Crisis, officially published its recommendations calling on ministers to introduce new duties on councils to prevent people becoming homeless. The provisional research findings, undertaken by academics and published by Crisis, found that local authorities would spend in total £43.9m a year on homelessness prevention under the new scheme. However, it found that these extra costs would eventually be offset by £46.8m a year due to fewer full homelessness duty cases, because people would get help quicker. The CLG has not confirmed whether or not it would match new legislation with extra money for councils. Read more on Inside Housing.

Higher Rents And Continued Lack Of Supply Set To Dominate 2016

Residential rents are set to go up in 2016 and in the home buying market there is likely to be a growing struggle for those seeking to get on the housing market, according to a joint report from agents. According to the Association of Residential Letting Agents (ARLA) there are various pieces of legislation coming into play in 2016 which will result in increased compliance costs for landlords, and as a result push up rents for tenants. ‘We urge the Government to re-think its proposals around reducing Mortgage Interest Relief, scrapping the Wear and Tear Allowance and hiking up Stamp Duty by 3% on buy to let properties,’ said David Cox, ARLA managing director. Read more on the Property Wire website.

You Can't Trust The Tories When It Comes To Affordable Housing

Britain's cost of housing crisis means that for too many families and young people on ordinary incomes, a decent and stable home is simply beyond their means. This isn't a natural disaster. Housing is, as the ex head of the civil service Lord Bob Kerslake has said, "the biggest public policy failure of the past 50 years".  Even under Margaret Thatcher, significant public funding was available for building affordable homes, and she re-affirmed the long-standing duty on private developers to do their bit to build low cost homes too. But this Conservative government has torn up the idea that we should build houses to cater for all needs, and with it any hope of solving the cost of housing crisis. Read more of this piece by John Healey on the Huffington Post website.

Pay to Stay Discussion: Key Issues

Forbes Solicitors held a discussion on “Pay to Stay” with Registered Providers (RPs) of social housing in response to the Government’s consultation. The discussion was an opportunity to discuss the current state of play, as well as how this policy may be structured and its impact. It focused on the following issues:

·         do RPs currently operate the voluntary “Pay to Stay” model and how is it operated?

in response to the consultation and the income threshold:

·         should the starting threshold be set out in relation to eligibility for Housing Benefit? and

·         how should income thresholds operate beyond the minimum threshold?

·         what is the estimate of the administrative costs of implementing the scheme and what are the factors driving such costs? and

·         what wider issues arise for RPs in light of this policy including regulatory or governance issues, statutory rights, feedback from tenants, unintended consequences and restrictions on use of “Pay to Stay” income.

Read more on the Forbes website.

Cost of Homelessness in Hackney Doubles

A Freedom of Information Act request from the Green Party has discovered that the cost of homelessness in Hackney has doubled since the 2010 general election. According to the figures, the cost of homelessness in 2009/10 was £3,092,255 compared to £7,167,440 in 2014/15. There was also a cut on staff spending in the same period, from £3,239,653 to £2,608,491. Since 2010, government policies have cut jobseekers allowance, housing benefits and increased sanctions for people receiving support. Read more on 24dash.

Resident Involvement Could Save Sector 'Millions'

Resident participation could save the sector millions, a minister has claimed, following the publication of government-backed research into tenant involvement. Stephen Williams, communities minister, said £118m could be wiped off housing associations’ costs at the publication of a review into Amicus Horizon’s resident involvement schemes. The report, Success, Satisfaction & Scrutiny, undertaken by the University of Westminster and backed by the CLG, examined six years’ worth of data from the 28,000-home landlord’s key performance indicators and financial accounts. The report identified a total of £6.64 million annual cost savings across twenty landlords, ranging from £1,000 savings in one landlord to £2 million in another. Download the report from the Amicus Horizon website.

Can We Afford Not To Build Sustainable Homes?

The Joseph Rowntree Foundation has published new research into the cost of building more sustainable housing. It asked if sustainable homes could be built more cheaply, and compared a range of approaches. The research found that building more energy efficient homes costs between 2.5% and 12.9% more per dwelling. The key question is not can we afford to build sustainable homes, but can we afford not to? The long term consequences of allowing our existing stock to remain energy inefficient outweigh the costs of addressing them now.  Download a copy of the report from the JRF website.

Doomed Universal Credit Scheme Cost £225k PER PERSON

The cost of delivering Iain Duncan Smith’s troubled Universal Credit scheme is £225,000 for each person on it, it has been claimed. The project has already cost the taxpayer £612million and has been dogged by delays and IT blunders. Mr Duncan Smith, the Work and Pensions Secretary, had promised one million people would be receiving their welfare payments under the scheme by April this year. But figures show only 2,720 claimants have been transferred onto the Universal Credit so far - a cost of £225,000 per person. Read more on the Daily Mirror website.

ASB Costs Social Landlords £325M a Year

Managing anti-social behaviour (ASB) costs social landlords £325m a year, a new report has revealed. It adds that 300,000 ASB cases per year are tackled by social landlords who halt 9 out of 10 of these cases. Noise is social tenants' biggest ASB complaint with the issue being cited in a third of all cases. One in five cases is resolved by sending a letter. Download a copy of the report from the HouseMark website.