Universal Credit: Direct Rent Payments 'More Effective For Curbing Arrears'

Direct rent payments for tenants on Universal Credit have been more effective at keeping them out of arrears than government reforms introduced last year, new research has suggested. A report carried out for Southwark Council by The Smith Institute showed that tenants who joined the new benefit system in 2018 had much smaller arrears than those who switched over in 2016 – owing less than two weeks’ rent on average as opposed to six. But researchers concluded that this was down to Alternative Payment Arrangements (APAs) being agreed with the 2018 group after only four weeks on average, compared with 58 weeks for the 2016 group. Download a copy of the report – Safe as Houses 3 – from the Smith Institute website.

https://omghcontent.affino.com/AcuCustom/Sitename/DAM/128/Safe_As_Houses_3_2019_v2.pdf

Thinktank’s Affordable Housing Commission Issues Call For Evidence

The Smith Institute thinktank launched the Affordable Housing Commission (AHC) in October. The call for evidence comes after focus groups told the commission of their support for “radical” changes to the private rented sector. Housing organisations and individuals in the sector are being asked to give their views on how affordability issues could be addressed. The commission has identified four groups it wants to help through its final recommendations: struggling renters, frustrated homeowners, people reliant on state support and older people facing affordability problems with their homes. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/thinktanks-affordable-housing-commission-issues-call-for-evidence-60174?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Universal Credit Tenants Slip Back Into Rent Arrears After Long Period

Tenants claiming Universal Credit for long periods persistently struggle to pay their rent and even build up more arrears despite government attempts to improve the situation. Researchers analysing tenants of Southwark Council who rely on UC pointed to a “worrying” trend of rent being consistently underpaid by an average of 7%, even 15 months after the first claim. They said arrears associated with UC could eventually cost the borough, which owns nearly 37,000 homes, £6m a year. Thinktank The Smith Institute has published its Safe as Houses 2 report on behalf of Southwark Council – which was one of the first local authorities where Universal Credit was fully rolled out. Download the report from the Smith Institute website.

https://omghcontent.affino.com/AcuCustom/Sitename/DAM/110/Safe_As_Houses_2.pdf

Seven In 10 Renters ‘Say They Would Need Lottery Win To Get On Housing Ladder’

Seven in 10 renters think they would need a lottery win to afford to buy their own home, a survey suggests. Some 72% of people currently renting said that they would need a lottery win to buy their own home and four in 10 (39%) are pinning their hopes on a family inheritance in order to buy a property. The survey was carried out across England and Wales to mark the launch of the Affordable Housing Commission. The commission has been established by think-tank the Smith Institute with the support of charity the Nationwide Foundation. Read more on the AOL website.

https://www.aol.co.uk/news/2018/10/17/seven-in-10-renters-a-say-they-would-need-lottery-win-to-get-on/?guccounter=1

Local Housing Companies: Opportunities And Concerns

The Smith Institute has recently published the first in-depth analysis of one of the most significant new developments in the housing sector. ‘Delivering the renaissance in council-built homes: the rise of local housing companies’ estimates that around 150 councils have set up local housing companies (LHCs) over the last five years or so and that, on the current trend, over half of English authorities will have one by 2020. The majority of the current LHCs are in London or the South East.  The LHC model has been adopted by authorities regardless of political control. Download the report from the Smith Institute website.

Universal Credit Behind Rising Rent Arrears And Food Bank Use

Universal Credit is pushing poor tenants deeper into rent arrears and sending food bank referrals soaring, according to a study by two councils that have been guinea pigs for the new regime. Southwark and Croydon councils in south London warned that without rapid changes the new system could have a devastating effect across the country as it is rolled out over the next few months, warning that arrears could reach “many hundreds of millions of pounds” and that tenants could face severe hardship. One food bank reported an increase in referrals of 97%. The report examined rent accounts for 775 social housing tenants in the two boroughs who had moved on to universal credit between August and October 2016, comparing them with 249 rent accounts held by tenants who moved on to the older housing benefit system during the same period. Download the report from the Smith Institute website.

Government Should ‘Throw Weight Behind’ Council Housing Companies

The government should “throw its weight behind” council housing companies, the chair of the Local Government Association (LGA) has said. Lord Gary Porter was responding to a report from the Smith Institute which reveals a “quiet revolution” in council housebuilding, with around 150 councils setting up housing companies despite little government support. The report shows that increasing numbers of councils are directly funding their own housing companies without government grant to try and meet local housing need, mostly building homes for private rent and sale. Some are recycling the company’s profits to subsidise new affordable and social rented homes, as well as providing temporary accommodation and housing for older people. Read a summary of the report on the Smith Institute website.

Devolution Deals 'Short Change Cities On Housing', Claims Report

The new metro mayors are being “short changed” on housing, according to a report by left-leaning thinktank the Smith Institute.  Its report, launched today, found the six city regions which go to the polls to elect new mayors next month face escalating housing shortages, particularly for those on low incomes. The report estimates at least £2.2bn of grant funding is needed to provide social housing in the regions. Greater Manchester is short by £831m, the West Midlands by £945m, Liverpool City Region by £249m, and Cambridgeshire and Peterborough by £162m. The current housing allocations provide virtually no funding for low-cost housing in the city region. Read more on Inside Housing.

Social Landlords Fund Research Into Universal Credit

A London council has commissioned independent research into the effects of Universal Credit on social housing tenants. Peabody Trust, Family Mosaic and Croydon Council have backed the council’s decision to commission research on the impact of Universal Credit (UC) and will all pay towards the costs. Labour-led Southwark Council said the full roll-out of Universal Credit in some parts of the borough, coupled with changes made through the Housing and Planning Act, has represented “an onslaught on social housing – and on council tenants in particular”. The research will cost £56,250, with Peabody, Family Mosaic and Croydon Council contributing £22,500. The Smith Institute has been commissioned to carry out the research. Read more on Inside Housing.

Planning Cuts Are 'Holding Back' House Building

Cuts to planning departments are frustrating rather than boosting house building, a new report has said.  Interviews with developers and planning officers found that both parties were concerned by cuts to council’s planning departments.  The Smith Institute report, produced in association with Barratt Developments, found there was consensus that greater resources could enable council officers to pay full attention to the progress of a scheme through the planning process. There were also concerns raised over neighbourhood planning- which gives communities the power to issue plans dictating where homes should be built- could slow or threaten schemes. Download the report from the Smith Institute website.

Most Councillors Do Not See PRS as Top Priority

Only 2% of councillors in England see the private rented sector supply of housing as their top priority for new housing supply, a survey has revealed. The low priority for the PRS reflected major concerns councils have about regulating large numbers of small buy-to-let landlords; the poor quality of PRS homes; short leases and security of tenure; and rising rent levels. Conducted by the Smith Institute in partnership with Places for People, the survey - ‘The growth of the private rented sector: what do local authorities think?’ - found that councillors and officers are concerned with the quality of homes in the PRS – especially at the bottom end of the market. Download a copy of the report from the Smith Institute website.

Think Tank Calls for Investment Bank to Tackle Housing Crisis

A think tank has called for a central and local government-run investment bank to help fund the cost of doubling house building. The Smith Institute published a report today calling for a bank jointly owned by central and local government to support urban extensions. The think tank researched state investment in banks across western Europe, and concluded that a similar system could help combat the shortage of housing in the UK.  The report follows a similar call made in a joint report by accountancy firm KPMG and housing charity Shelter last month. Download a copy of the report from the Smith Institute website.

Property Speculation Tax to Prevent Housing Bubble

The government should introduce a property speculation tax to stabilise the market and prevent another housing bubble, according to a new report. Published by think tank the Smith Institute, ‘The Case for a Property Speculation Tax’, which highlights the speculative activity driven in high demand areas by overseas investment, argues that the government urgently needs to consider preventative action to curb excessive volatility in the property market. The report warns that a housing bubble would not only worsen the housing crisis but also threaten the economic recovery. Read more on 24dash.

Councils Join Forces After Funding Snub

A group of eight east midlands councils has established a task force to ensure the region is not snubbed for a second time in succession by the HCA.  The group, led by umbrella organisation East Midlands Councils, aims to make sure the region’s social landlords cash in on the £300 million of grant funding to build 15,000 affordable homes announced in this month’s stimulus package.  The group will respond to a report from think tank The Smith Institute which criticised the HCA for the distribution of funding under its £1.8 billion affordable homes programme. The report found that the east midlands received funding for just 4,183 homes or 5 per cent of the affordable homes programme in England. This is despite the area housing more than 10 per cent of the country’s population. Read more on Inside Housing.

Report Faults HCA Funding Allocation

A new Smith Institute report shows that East Midlands is getting a raw deal with government unfairly cutting housing and growth money. Although over 10% of England’s population live in the East Midlands it only receives 4% of government funds for housing and regeneration. This is exacerbating the region’s housing crisis and ignoring the contribution the East Midland’s could make to creating jobs and rebalancing the economy.  Download a copy of the report from the Smith Institute website.

'Government Must Do More to End In-Work Poverty'

A think tank has called on the government to do more to end in-work poverty. The Smith Institute has pointed to Department for Work and Pensions figures showing the vast majority of new housing benefit claims have come from employed claimants. Between May 2010 and February 2012 the number of housing benefit claims increased by 252,970, in which around nine in ten (227,640) were from people in low paid work. The think tank said the figures show that falling incomes and rising living costs are pushing people below the poverty line. A spokesperson for the think tank said: ‘In some places, like London, real rents are rising, at the same time real wages are falling.’ Read more on Inside Housing.

HRA Reform Could Halt Demolition

The new system of self-financing could deter authorities from demolishing old stock according to a report, Making the most of HRA Reform, from Pricewaterhouse Coopers and The Smith Institute. The report argues that the move to self-financing, which will lead to councils being able to keep rental income in exchange for taking on debt, could produce £54 billion of investment over the next 30 years. Read more on Inside Housing.

Higher Social Rents Should Subsidise Development

The funding model for social housing is broken and must be changed if housing associations are to continue providing affordable homes, according to an influential think tank. A report from the Smith Institute warns the prospects for affordable housing development as the government cuts the deficit are the worst for a generation. It calls for a new, viable development model to attract private funding. It suggests the government allows social rents to rise to subsidise future development, and to reform housing benefit so that a ‘stable and reasonable’ housing allowance is paid directly to landlords. The report also calls for incentives to build housing for market rent, so that developers build the most homes possible, with the lowest grant rates possible. Download a copy of the report, Rhetoric to Reality, from the Smith Institute website.