Pressure On Social Landlords Set To Rise As Universal Credit Rolls Out

Housing officers will need to collect an additional £7.268bn each year because of welfare ‘reform’. New research by Mobysoft – a provider of rent collection software to the social housing sector – says rent being collected directly from tenants by housing officers will increase by 63.1%, on average. The study – which covered around one third of the UK’s social housing stock, – equates that percentage increase to an additional £7.268bn being collected nationally each year following the full roll-out of Universal Credit. Social landlords, already hit by a compulsory 1% rent cut until 2020, will be required to allocate additional resources to collection services and manage the cash flow implications of increased rent arrears. Read more on 24housing.

http://www.24housing.co.uk/news/pressure-on-social-landlords-set-to-rise-as-universal-credit-rolls-out/

Government ‘Should Drop Last Year Of Rent Cut’ To Fund Fire Safety Work

At the National Housing Federation finance conference in Liverpool Waqar Ahmed, group director of finance at L&Q, said the government could “by a switch of their pen” scrap the 1% rent cut in 2019/20 and this would generate £2bn for the sector to help pay for fire safety work. David Orr, chief executive of the National Housing Federation, said the sector had “heard a lot of noise” from government but seen “very, very little concrete action”. He added: “It’s very difficult to point to something and say as a result of Grenfell the government has done this.” The government could decide not to charge VAT on fire safety work carried out by landlords, Mr Orr said. Read more on Inside Housing.

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Javid Pledges ‘Certainty’ On Rent Levels

Delivering his keynote speech to the National Housing Federation conference 2017, the communities secretary appeared set to announce a future rent settlement after rent cuts conclude in 2020. But he stopped short, saying the government is still working on the detail of a deal. However he pledged the sector would get long-term certainty through the deal. He told the audience: “I know you’ve been waiting for this for a long time. I’ve tried to do everything I can within government. It will be very, very soon and you will get the certainty you deserve.” Read more on Inside Housing.

Associations Slash Spend On Major Repairs As Rent Cut Bites

Housing associations in England slashed spend on major repairs work to their estates as the government enforced its policy of cutting social rents. An survey by Inside Housing reveals that associations cut expenditure on major repairs by 7.3% to £386m in 2015/16. In July of that year the government announced its decision to cut rents by 1% a year for the next four years. The survey reveals that associations’ planned maintenance expenditure also dropped by 1.6% to £630m. John Kiely, director of housing and public sector at Savills, says he thought the fall in expenditure “is all down to the rent reduction”. Read more on Inside Housing.

94% Of Social Housing Providers Demand Improved Housing Policy

Independent research across 100 senior decision makers in social housing shows 94% believe the government needs to improve its housing policy – because present policy leaves them and the communities they serve at risk. Transformation specialist Civica releases the finding in a new report  ‘The Changing Landscape for Social Housing’ prepared in partnership with SOLACE and The CIH. Specifically, senior housing decision makers want policy to focus on a broader range of tenures beyond home ownership (65%) and to reduce or scrap the annual 1% rent cut entirely (49%). Priorities over the next 12 months are identified as the safeguarding of jobs (59%), cutting costs and driving efficiencies (57%), improving customer service and satisfaction (57%) and dealing with changing regulations and reforms (52%). Read more on 24housing.

Government Refuses Major Changes Recommended By Lords Committee

In February, the House of Lords Committee on National Policy for the Built Environment suggested changes to council borrowing caps, a review of the 1% rent cut and issued a call to “reconsider” its proposal to include Starter Homes within the definition of affordable housing.  In its response the government said it did not agree with the committee that the 1% rent cut may “threaten the viability of new schemes” planned by councils. The government did not accept the committee’s recommendation to review the impact of borrowing restriction on councils’ ability to deliver housing and said it is “important that the definition of affordable housing for planning purposes supports present and future innovation by housing providers in meeting the needs of a wide range of households who are unable to access market housing”. Read more on Inside Housing.

Supported Housing – Parliamentary Written Answer

Helen Hayes: To ask the Secretary of State for Communities and Local Government, what steps the Government plans to take to support providers of supported housing affected by planned reductions in social housing rents.

Gavin Barwell: The Government is committed to protecting the most vulnerable through our welfare reforms. That is why we have exempted supported housing from the Local Housing Allowance cap until 2019/20, from which point we will bring in a new funding model which will ensure that the sector continues to be funded at current levels, taking into account the effect of Government policy on social sector rents. We will apply the rent reduction to supported housing, with the exception of domestic violence refuges, with rents in these properties decreasing by 1% a year for 3 years, up to and including 2019/20.

CLG Set Out Process For Rent Exemptions

The CLG has set out information and guidance for councils considering applications for exemption from the mandatory four year 1% rent reduction. The information and guidance makes it clear that the Secretary of State will only consider granting an exemption if it is the only way to avoid the authority's Housing Revenue Account falling into serious financial difficulties. Any council considering applying for an exemption from the mandatory 1% rent reduction will need to demonstrate that they have considered all other options for reducing expenditure in line with reduced rental income including looking at existing contractual commitments. Download the guidance from the CLG website.

CLG Reveals Council Rent Cut Exemption Criteria

The government has published guidance for councils on how to apply for an exemption from the 1% rent cut. The CLG said the number of applications for exemptions should be “limited” and there will be an expectation a council should “explore thoroughly what it can do to mitigate any financial risk without recourse to an exemption, including looking at all contractual commitments”. The guidance reveals the process by which the secretary of state will assess applications for a rent cut. It reveals exemptions will only be granted “where the local authority would be unable to avoid serious financial difficulties if it were to comply”. Download the information from the CLG website.

Survey Reveals Tenants' Rent Cut Concerns

More than half of social tenants to answer a survey said they are concerned about a reduction in services from their landlord as a result of the rent cut. Independent polling company BMG Research asked 408 tenants in England how concerned they are that the 1% annual social rent cut may lead to a reduction in services. BMG Research said the data was weighted to reflect the profile of adults living in social housing. The research found 56% of tenants are concerned about reduced services, of which 8% are “extremely concerned.” The remaining 44% of tenants said they were not all concerned. Read more on the BMG website.

Councils Warn Of Rise In Homelessness And Waiting Lists

Homelessness will increase and housing waiting lists will rise as government housing policies combine to reduce the number of desperately-needed homes available to communities, councils warn in a snapshot survey published by the Local Government Association. The LGA poll asked councils what the impact of a range of government housing policies would have on their local area by 2020. 90 per cent of councils responding to the survey said reforms – including extending Right to Buy, cuts to social housing rents and Pay to Stay – will lead to a drop in the number of much needed council homes. 78 per cent predict that the reforms will lead to a rise in homelessness and demand for temporary accommodation (80 per cent) in their community while the majority (81 per cent) expect their council housing waiting lists will increase as a result. Read more on the LGA website.

High-Income Tenants Exempt From Rent Cut

The 1% annual rent cut will not apply to households with household income of £60,000 or more, the government has said. The exemption was made in secondary legislation to the Welfare Reform and Work Act, which forces housing associations and councils to reduce their rents by 1% every year for four years. The Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations state that the rent reduction will not apply to households meeting the income qualification criterion, which is £60,000. Between 11,000 and 21,000 households living in social housing earn more than £60,000, according to government documents produced in 2013. Download the Regulations from the GovUK website.

Councils Do Not Think That Starter Homes Will Address Affordable Housing Need

Local councils, of all political parties, have agreed that the Government’s Starter Homes policy will hinder rather than help to tackle the growing need for genuinely affordable housing in England.

·         almost 80% of local councils do not think that Starter Homes should be classified as affordable housing and only 7% of councils think they will address the need for affordable housing in their local authority areas

·         Over two thirds anticipate that they will be building less social and affordable housing as a result of the Government’s plans to reduce social rents by 1% a year for the next four years

·         96% of councils described their need for affordable homes as severe or moderate

·         Nine out of 10 councils are concerned that the extension of the Right to Buy to housing association tenants will mean that there will be less socially-rented homes available

Read more on the Town & Country Planning website.

Clarification From CLG On Supported Housing Rent Reduction

Following the Ministerial announcement that supported housing would be excluded from the 1% rent cut for 2016/17, we've had lots of questions about the definition of supported housing. All the exceptions will be confirmed in regulations and we expect these to be available in the next few weeks, however in the meantime CLG has provided the following statement of clarification:

"Our intention is that this be a wide definition.  All supported housing as currently set out in the rent standard guidance will be excepted from the rent reduction for a period of 1 year and providers should use this as a guide as they set rents for 2016-17. The exact definition will be defined in regulations. For the purposes of clarity we intend that the exception will include though not necessarily be limited to:

·         domestic violence refuges and other specialist accommodation based support for domestic violence victims

·         hostels and other accommodation for the homeless

·         sheltered accommodation for older people

·         supported accommodation for young people

·         extra care housing,

·         accommodation for people with mental health or drug/alcohol problems,

·         accommodation for people with disabilities

·         accommodation for ex-offenders and people at risk of offending.

Ministers have confirmed that alms houses, cooperative housing associations and community land trusts will also benefit from the year long exception. Read more on the NHF website.

Minister Rejects Call For Rent Cut Review

The government has rejected a call from former civil service head Sir Bob Kerslake to commission an independent review of the social housing rent cut. Lord Bob Kerslake, a crossbench peer who also chairs Peabody, was one of three peers to table an amendment to the Welfare Reform and Work Bill, which would require the government to commission an independent evaluation of the four-year 1% rent cut. Lord Kerslake believes the findings are necessary to help ensure the government properly evaluates the impact of the cut when it is deciding on rent-setting after the cut comes to an end in 2020. Read more on Inside Housing.

Landlords Mull 'Sister Companies' To Swerve Policies

Housing associations are consulting lawyers about setting up ‘sister companies’ to free stock from the effect of government policies. Deregulatory measures contained in the Housing and Planning Bill give landlords the freedom to sell stock without the regulator’s oversight. This would allow associations to create sister companies and sell stock to them, effectively removing them from measures such as the rent cut and Right to Buy. Lawyers have fielded initial queries from a range of landlords and are understood to be formally advising some on the move. The move would likely prove controversial with the government if it was seen as a way to evade reforms. Read more on Inside Housing.

Rent Rise Flexibility To Remain For Supported Housing

Supported housing providers will still be able to raise their rents on re-lets by up to 10%, despite the 1% social rent cut, a local government minister has confirmed. While landlords will still be forced to cut their rents by 1% a year over four years, they will be able to implement a one-off rent rise of up to 10% on supported and sheltered housing re-lets. They will only be able to do this once for each property. The concession could mitigate some of the effects of the annual rent reduction for supported housing providers, which the National Housing Federation says will cost housing associations £3.9bn over four years. However, it will not offset the problems set to be caused by the decision to cap housing benefit for new social tenants at Local Housing Allowance rates. Read more on Inside Housing.

1,000 Council House-Building Plan Cut To Just 78 Homes

Reading council’s ambitious plan to build 1,000 council houses over 30 years has been cut back to just 78. The business plan to start the scheme was drawn up by Reading Borough Council through its housing revenue account in April and demolished by Chancellor George Osborne in July in his emergency budget. The chancellor’s rent reduction for council and social housing tenants of one per cent per year for the next four years - intended to cut the housing benefit bill - meant the figures for 1,000 homes no longer added up. Read more on the Get Reading website.

Landlords Plan Repairs Cuts

Three quarters of landlords are planning changes to their maintenance services, with half of these planning to cut planned repairs in the face of government cuts, a survey has found. More than 40 landlords owning a total of 400,000 homes answered a survey by Build Recruitment and Housingnet, revealing they are considering a significant shake-up of repairs in light of changes such as the 1% rent cut. A fifth said they are planning redundancies in their repairs section, while a fifth were also planning to bring repairs in-house. Two-thirds of the respondents to the survey were housing associations, almost a fifth were local authorities and the rest include ALMOs and a housing co-op. Read more on the Build website.

Housing – Parliamentary Written Answer

Mr Roger Godsiff: To ask the Secretary of State for Communities and Local Government, if he will meet providers of (a) supported housing and (b) specified housing to discuss the effect of the proposed change to social rents on the viability of those types of housing.

Brandon Lewis: We welcome the opportunity to engage with the supported housing sector to understand how the sector’s views can best be accommodated as we implement our policy. Ministers and officials have been discussing this issue with the National Housing Federation and a number of providers. We plan to except specialised supported housing, residential care homes, nursing homes and PFI-funded Extra Care housing from the rent reductions. We are continuing to work with the sector on this issue to ensure the most vulnerable are protected.