TWO days, two Pyrrhic victories for housing associations on Ground 8, the controversial procedure that means they can evict tenants with eight weeks of rent arrears with no room for discretion by a judge.

Yesterday, the High Court rejected an application by a former tenant of London & Quadrant that it breached the Human Rights Act when it used Ground 8. And in a House of Lords debate on Monday an amendment to the Housing and Regeneration Act to make it illegal for associations to use Ground 8 was withdrawn to allow a working party on the issue to complete its work. 

But 'victory' can rarely have tasted less sweet. The High Court dismissed London & Quadrant's argument that its decisions were not subject to judicial review since it was not a 'public body' - a nightmare ruling that could mean not just a flood of judicial review applications but could also threaten their ability to raise private finance. 

In the Lords, although the government successfully argued for more time, the minority of associations that use Ground 8 came in for trenchant criticism. Lord Best (a former director of the National Federation of Housing Associations) said it could not be right that tenants could lose their home because their local authority had failed to pay their housing benefit or that associations could use Ground 8 to make them pay up. Having it in the Bill was 'an offence against justice'.

Communities minister Baroness Andrews said the working group needed more time to consider further research and come up with recommendations. But she also had harsh words for associations that use the power when she agreed that 'serving notice in such circumstances is an affront to justice'.

Associations - and lenders - who argue that it is important to keep the option to use Ground 8 may yet get their way. The working group may turn out to be a way of kicking the issue into the long grass - though housing and legal groups appear will keep up the pressure.

London & Quadrant may appeal successfully against the judicial review ruling. However, the Press Association report of the court case left little doubt of what is at stake, with London & Quadrant warning that it could affect associations' ability to finance their operations 'thereby potentially risking the future delivery of affordable housing'.

For the last 20 years associations have successfully operated in the grey area between public sector and private sector and social responsibilty and business efficiency. How much longer?

Posted by Jules Birch, June 25

Posted in Housing associations, Legal

THE HOUSING and Regeneration Bill completed its report stage in the Commons on Monday but not before the government had fought off two determined attempts by Labour rebels to level the playing field for council housing and not without a welter of government amendments addressing everything from the regulation of housing assocations to the position of tolerated trespassers and shared ownership enfranchisement.

Council housing dominated most of the debate as a succession of Labour MPs like Austin Mitchell and Michael Meacher launched a bid to win more resources for local authorities that retain their stock. Although they won Lib Dem support that amendment was easily defeated. However, the rebels also wanted to tighten up the rules on stock transfer ballots that Mitchell said were being conducted on the basis of 'bribery, bamboozlement and bullying'. That was backed by the Conservatives too, ensuring a much narrower 263-210 result.

However, the rules on ballots could yet be changed. Junior housing minister Iain Wright admitted that 'at times, the information provided has been slightly one-sided' and promised more talks and possible amendments later.

The same goes for ground 8, the controversial fast-track procedure that means the courts must grant possession orders to housing associations whatever the circumstances - even, for example, where rent arrears are caused by delays in housing benefit payments. Former Conservative housing minister Sir George Young proposed an amendment banning social landlords from using it.

The government did not accept that but Wright acknowledged that 'there remain concerns about the actions of a small minority of RSLs and other private sector landlords'. CLG officials will meet Shelter, Citizens Advice, the Council of Mortgage Lenders, the Housing Corporation and National Housing Federation in a working group to recommend options for a way forward by the summer.

As for the Federation's main concern, regulation that it claimed would interfere with associations' independence, that seems to have been assuaged by an amendment spelling out when the regulator should and should not intervene. Wright said: 'We are reinforcing the view that the Secretary of State’s role should be limited to strategic directions, with direct influence only on key issues such as rent, physical maintenance and tenant empowerment, which is right. The regulator’s standards should be outcome focused wherever possible, should not threaten the status of charitable providers and, crucially, should take account of the desirability of registered social landlord boards managing their own business and setting their own corporate direction.'

Posted by Jules Birch, April 1 

Posted in Legal, Local government, Politics

THE BATTLE between the National Housing Federation and the government over housing associations' independence looks like going to the parliamentary equivalent of extra time and penalties after the NHF said it was still not happy with more than 100 amendments tabled yesterday to the Housing and Regeneration Bill.

At the heart of the dispute are the powers of the new regulator, Oftenant. The NHF argued that the original Bill would not just allow it to apply sanctions to associations guilty of mismanagement or misconduct but to any association that fails to meet standards set by the government. That would interfere with their independence and could lead to associations being reclassified as public bodies - killing the golden goose of private finance in the process.

The detail of the new amendments is still being pored over by the experts. A concession by the government appears to mean that the regulator and secretary of state would have to have regard to housing providers' original objectives but the NHF says it is still concerned about the 'level of state control'.

However, the NHF message is not getting across as well as it might want. As Inside Housing reported last week, the G15 group of associations has become so concerned about relentless criticism from backbench MPs that it has hired a firm of lobbyists to argue their case. Meanwhile, London local authorities are pushing in the other direction by tabling amendments for more control over associations.

The stakes for the government's housing programme were also made abundantly clear yesterday. The Housing Corporation published the 2008 Global Accounts, showing associations' had a turnover of £9.1bn, and its annual private finance survey, showing they plan to borrow another £17bn  by 2012.

All of which will mean more discussions and potentially more amendments over the next 48 hours ahead of Monday's Report Stage of the Bill. 

Posted by Jules Birch, March 27

Posted in Finance, Housing associations, Legal

THIS WEEK'S survey by Inside Housing revealing the true scale of the tolerated trespasser problem is shocking news. But it should not come as a surprise given the scale of possession action by social landlords over the last ten years.

From the mid 1990s onwards local authorities and housing associations resorted to the courts increasingly frequently to combat rising rent arrears. Court actions entered by social landlords in England and Wales peaked at almost 200,000 in 2002 and they obtained more than 130,000 possession orders. Since 1997 social landlords have obtained more than a million suspended and outright orders.

Concern about the trend and, more recently, a new pre-action protocol have led to a reduction in both. But Ministry of Justice statistics show that in 2006 there were still 158,000 actions entered and 107,000 orders made. To put that into perspective, despite a sharp rise, there were still fewer mortgage repossession orders last year. 

But while action has been taken to reduce the number of court actions, the legacy of previous ones continues and a legal loophole ensures that tenants with a previous possession order against them or who have breached a previous suspended order remain 'tolerated trespassers'. They don't even automatically get their tenancy back if they have paid off their arrears. It's a limbo status that not only affects their individual tenancy but also their right to be consulted and balloted over issues like stock transfer. 

Sorting out the mess will be complicated. But last year the CLG introduced new procedures for avoiding the unintended creation of tolerated trespassers [download PDF here] and consulted on what to do next. Action is urgently required.

Posted in Legal, Social housing

SALE AND leaseback companies have seemingly emerged from nowhere to become public enemy number one. Unknown outside the housing advice world until a couple of months ago, they've now achieved the ultimate reverse accolade: a primetime TV spot trying to swindle Britain's favourite landlady.

It's unclear  the Council of Mortgage Lenders, Shelter and Citizens Advice knew the plot of Eastenders before they launched their joint call for regulation of sale and leaseback yesterday but it could hardly have been better timed for reaching the wider public - on top of the press coverage this morning.

Sale and leaseback companies buy property from homeowners in financial difficulties and then rent it back to them. But concern is mounting about unscrupulous companies that pay below market value and offer no security of tenure and that borrowers do not know what they are signing.

The three organisations want the sector regulated by the Financial Services Authority, pointing out quite reasonably that lenders' treatment of people facing repossession is regulated but that there are no safeguards for sale and leaseback customers.

But, quite apart from the regulation aspect, what will be of concern to all three is how the problem has emerged under their noses. Lessons from the last housing market downturn - get independent advice and talk to your lender as soon as possible - seem to have gone unheeded this time.

As interest rates, arrears and repossessions rise sharply, two factors seem to be responsible. The first is the internet: try googling 'stopping repossession' and you'll find that websites of companies only too eager to help drown out the sites of organisations offering independent advice. The second is that not all sale and leaseback companies come in the guise of the one trying to 'help out' poor Peggy Mitchell. Often they are buy to let investors looking to - in the parlance of property programmes - maximise their margins in a challenging market. 

Posted by Julian Birch, 23/10/2007

Posted in Legal, Repossessions