Saturday, 29 April 2017

Giving the game away

From: Inside edge

Join me for a walk into the future, one with shiny happy tenants and shiny caring landlords. One where all is for the best in the best of all possible worlds.

I was obviously mistaken in my initial assessment of the social housing reforms. Because either the team behind the impact assessments just published by the DCLG have a Panglossian faith in what they will achieve. Or they’ve overdone it on the Prozac.

According to the summary of the main impact assessment: ‘Our preferred proposals should: reduce the size of waiting lists; increase the flow of new tenants into social housing; improve tenants ability to move to another social home both within the local area and beyond; reduce over-crowding within the social sector; reduce the number of households in temporary accommodation; and, alongside recently announced proposals for reforming housing benefit, provide better incentives for tenants to move into and be able to sustain employment.’

It’s quite a list and some of it may be true. Nobody would claim the current system is perfect and it’s perfectly possible that some of the reforms may achieve some of those objectives. But all of them?

And what about those left behind? The summary goes on:  ‘Changes to waiting list qualification criteria and tenancy contracts might conceivably have some adverse impacts for households that will no longer be able to register for, or to remain in, social housing (since private rents are higher than those for social housing and there is typically less security of tenure).  Similar impacts could occur if local authorities make more offers of suitable private rented accommodation to households accepted as owed the main homelessness duty.  Low income households in the private rented sector could face stiffer competition for affordable dwellings to rent.’

Might conceivably? Could? Call me cynical, but I’d put it a little stronger than that for the losers from these reforms, the people forced into the private rented sector who cannot afford home ownership. And all of those adverse impacts will be magnified by the cuts in housing benefit that are barely mentioned in the assessment. 

Two sections of the assessment rather give the game away.

First, there is the impact of the end of security of tenure. ‘It is common for private tenancies to be provided with minimum terms of 6-12 months though, which suggests that many existing private renters are not willing to pay a rental premium in order to secure the benefits of longer contracts.  This implies that reducing security of tenure might only have a slight adverse impact on households.’

Second, the assessment of the plan to allow local authorities to discharge the homelessness duty into the private rented sector also considers the alternative of strengthening the offer by requiring that private rented accommodation be offered with longer minimum tenancy terms and greater protection from eviction.

‘This option was rejected because it is likely to be impractical and unlikely to be effective.  It would be impractical because the stronger the offer required before the duty could be ended, the less likely private landlords would be prepared to offer accommodation on those terms.  It is unlikely to be effective because, given a choice, most applicants are still likely to choose the potential lifetime tenancy offered by social housing over the more limited period of tenure offered by an assured shorthold tenancy in the private sector.’

So on the one hand private tenants are failing to opt for longer tenancy terms - as if any of them apart from tenants at the top end of the market actually have any real choice. On the other landlords would refuse to offer them in any case - and potential social tenants would understandably choose to stick where they are.

The solution? Force them into the private rented sector. Cut housing benefit to corral them into the cheapest accommodation. Block any moves to introduce greater consumer rights or regulation.

And then argue that it ‘might conceivably’ have some adverse impacts.

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