Thursday, 05 March 2015

Housing minister acts as landlords warn of delays to house building

Shapps ‘on the case’ in affordable rents row

Grant Shapps has intervened in the stand-off between councils and housing associations over rents which is threatening to derail the £1.8 billion affordable homes programme.

The housing minister this week revealed he has asked senior civil servants to examine the extent of disputes over rent levels agreed between housing associations and the Homes and Communities Agency in return for development cash.

Under the programme, which allows landlords to charge up to 80 per cent of market rents on new homes and some re-lets, councils can veto schemes they are unhappy with.

The housing minister spoke publicly on the issue for the first time following a question by Steve White, chief executive of 43,000-home Hyde Group, at a Conservative Party conference fringe event in Manchester on Monday.

Mr Shapps said Hyde was the second housing association to flag up the rent row with him.

He said to Mr White: ‘I’m going to ask you to do some work with my officials. They have promised to come back to me with the extent of it, Terrie [Alafat, director of housing growth and affordable housing at the Communities and Local Government department] is on the case.’

Referring to the rent disagreements, Mr Shapps added: ‘These are some of the issues we need to be careful of in the way we define the whole project [affordable homes programme].’

Around a dozen councils in London, and a small number elsewhere, have notified housing associations of their policies around the affordable homes programme, including expected rent levels, tenure mix, bedroom size and proportion of re-lets. In some cases the policies conflict with agreed bids.

Mr White said seven councils had written to him to say the terms under which Hyde bid are no longer acceptable.

He said: ‘There are some issues emerging where some local authorities are seeking to exercise a form of veto over the use of affordable rents in their communities. If unresolved this issue may become an impediment to the delivery of the programme.’

Tom Dacey, chief executive of 24,000-home Southern Housing Group, said he had received letters from around six local authorities outlining their rent policies, some of which conflicted with SHG’s agreed programme.

He said: ‘We can’t afford to be in a position where the business plans agreed with our boards and the HCA are undermined by local authorities.’

Mr Dacey said the affordable homes programme is already six months in and if the impasse continues, associations will become nervous about starting work.

Under the programme associations are paid by results and need to complete ‘firm’ schemes, schemes identified already, by 31 March 2015 to receive grant.

A CLG spokesperson confirmed the department is looking at the issue but would not comment further.

Readers' comments (5)

  • F451

    Shapps is committed to allowing the locally determined need and locally determined priorities to be those that lead to local development. Anything less is a reversal on his key plank in localism.

    Maybe, had consultation been allowed and advice taken, the Minister would not have so trapped himself between failing to implement localism and failing to deliver the scale of new housing development promised.

    Others have used the word astute - it would be an astute politician who at this point held up his hands and admitted to misjudgement, took ownership of the errors and introduced a plan of correction before stepping down to spend the required time for attonement.

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  • Rick Campbell

    The key words in this article are: "Under the programme, which allows landlords to charge up to 80 per cent of market rents on new homes and some re-lets, councils can veto schemes they are unhappy with."

    Bearing in mind that there are a number of existing tenancies where rent of social housing properties is already set and where tenants have a tenancy for life ... how can that nice Mister Shapps decide that people on a certain income (of 6 figures) should pay a higher rent if the law (as in the tenancy agreement) states those properties are of a specific tenure.

    I bring this issue up here brecause it appears to me that the Minister sees himself as above the law and could be seen as a person who is encouraging landlords to break the law.

    AND, as such, is he the right person to be 'on the case' or indeed a fit and proper person to be holding public office?

    As I say, as nauseum. the devil is in the detail and the whole malarkey is turning into a farce.

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  • BlokeWithAConscience

    I lost any respect for Mr Schapps "affordable rent" model when I discovered it was a shipped in policy from Australia and had failed there, according to Shelter's research. Good on the LAs for wanting to keep rents affordable rather than modelling them on a % of the broken housing market.

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  • If local councils want to interfere with housing associations and rents they should be prepared to subsidise the costs and justify that to their residents - that is what localism is all about. Don't expect central government to make up the cost of your local decisions.

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  • "Affordable rent" is the end of social housing that is genuinely affordable. It is a mistake for tenants and for the country.

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