Reform of Social Housing
In the final version of its coalition agreement, the government committed itself to:
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Considering ways of bringing empty homes into use.
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Promoting shared ownership schemes and help social tenants to own or part-own their homes. As part of this the government stated that it would create new trusts to make it easier for communities to provide homes for local people.
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Reviewing Housing Revenue Account (HRA). HRA is a notional system that estimates the rental income that every council should receive from the council housing they provide and the costs that they incur in providing it.
As part of this, on 22 November 2010, the government announced its plans for reforming social housing and published a consultation on its proposals.
Key reforms
Key reforms suggested by the consultation include:
Existing secure/assured tenancies
The government has stated that the proposed reforms will apply to new tenancies only, existing secure or assured tenants rights will not be affected, this includes their succession rights and their security of tenure.
Through the new "Tenancy Standard" , the government intends to guarantee that existing secure or assured tenants will be granted a new tenancy of the same status by their new landlord if they move to another social rent property. However, this guarantee will not necessarily apply to tenants with new secure or assured tenancies (paragraph 2.52).
However, paragraph 2.50 of the consultation also states that the government recognises that there will be some new tenants who will still require social housing for life, for example, those with a long-term illness or disability, and these should continue to be guaranteed social housing for life under the Tenancy Standard.
Introduction of affordable rent tenancies
The government is consulting on introducing a new "affordable rent" tenancy to be offered by housing associations to new tenants of social housing from April 2011. Affordable rent tenancies are intended to be offered to those who would otherwise be unable to afford adequate housing in the private market and will be an alternative to traditional social rent.
Affordable rent will offer shorter term tenancies (initially a fixed term of at least two years) at a rent that is higher than social rent. Landlords will be able to set rents at any rate between current social rent levels and up to 80% of local market rents. Tenants who are unable to pay will be able to apply for housing benefit, if they are eligible.
The government intends that the additional rental income received from affordable rent tenancies will contribute to the provision of new affordable homes.
Introduction of flexible tenancies
The government proposes introducing a new type of tenancy, a "flexible tenancy", as an alternative for landlords to the secure tenancy. Currently under section 79 of the Housing Act 1985, where a tenant occupies a property as their only or principal home, any tenancy granted by a local authority landlord will be a secure tenancy (subject to the exclusions listed in Schedule 1 to the Act). This has traditionally meant that social homes are allocated for life, even if a tenant may only have a short-term housing need.
The government intends to give landlords more flexibility to decide what sort of tenancy they should offer based on their current levels of housing stock and the needs of individual tenants. The key feature of the proposed flexible tenancy will be how long it lasts: the government intends to provide a minimum fixed term of two years for these sort of tenancies but to allow landlords to set a longer fixed term if they wish. Paragraph 2.49 of the consultation states that the government will expect landlords to provide longer tenancies to families with children to avoid any substantial disruption. Other categories of tenants who may require tenancies longer than the minimum fixed term of two years are likely to be included in the new Tenancy Standard.
The government intends to ensure that local authority landlords and housing associations are able to offer the new flexible tenancy by amending the Regulator's Tenancy Standard which currently requires them to provide "the most secure form of tenancy compatible with the purpose of the housing and sustainability of the community".
Tenants rights
The government proposes providing tenants with flexible tenancies the following rights:
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Right to exchange.
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Right to buy (on the same terms as secure tenants).
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Right to take in lodgers and to sub-let part of the property (with landlord's permission).
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Right to have repairs carried out.
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Right to consultation and information.
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Right to one succession to spouse or partner of the deceased tenant. Landlords will be able to offer other relatives the opportunity to succeed but will not be required to do so.
Termination
Tenants with flexible tenancies will have the same protection from eviction as secure tenants and landlords will still be required to rely on one of the grounds for possession and also prove that they acted reasonably when deciding to seek possession.
When a flexible tenancy expires it is up to the landlord, in accordance with its own policies , to decide whether the tenant will be entitled to remain in the property. Landlords will be required to serve a notice on their tenants six months before the end of the tenancy if they decide that they will not be reissuing the tenancy. The notice should set out:
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The reasons for the landlord's decision (which should reflect its policy).
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The fact that the tenant is entitled to seek an internal review.
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The tenant's right to challenge the landlord's right of possession in the county court if they believe that the landlord has made an error of law or a material error of fact.
If a landlord decides not to renew a tenancy in line with its policies then the government intends to include a requirement in the Tenancy Standard that all social landlords must provide advice and assistance to help the tenant find suitable alternative accommodation. The consultation does not state the level of advice or assistance required to be offered and also does not mention whether there will be a minimum requirement on landlords as to what advice and assistance is offered, for example, is a document setting out telephone numbers of alternative housing providers likely to be sufficient?
Duty on social landlords to publish a policy on tenancies
The government proposes that social landlords are required to publish and maintain a policy setting out:
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When they will grant lifetime tenancies.
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When they will grant flexible tenancies.
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The duration of any fixed term (flexible) tenancies and when these tenancies will be reissued when the fixed term has expired.
Duty on local authorities to publish a strategic tenancy policy
The government intends to legislate to require all local authorities to publish and maintain a strategic tenancy policy. This will set out objectives that should be taken into account by individual social landlords when considering granting or reissuing a tenancy.
The policy should be drawn up in consultation with other landlords and any other persons or bodies that the government prescribes.
New Tenancy Standard
The government proposes to amend the existing Regulator Tenancy Standard in numerous ways, to effect this the government will consult on a draft direction to the Regulator on the content of a new Tenancy Standard.
Allocations
Under the current allocation legislation (Housing Act 1996), local authorities must operate "open" waiting lists, meaning that anyone is entitled to apply for and be allocated to social housing, subject to some exceptions. The consultation proposes allowing local authorities to set their own rules for allocations and determine which categories of social housing applicants can join the housing list based on the needs of their areas. The current reasonable preference categories set out in section 167 of the Housing Act 1996, which requires every local housing authority to have a housing allocation scheme which gives "reasonable preference" to certain categories of applicants, will remain.
Greater ability for tenants to move: home swap scheme
The government proposes tackling the problem of tenants remaining in unsuitable accommodation because they feel that they are unlikely to have sufficient priority under their local authorities' housing allocation scheme to move, by introducing a national home swap scheme.
The scheme would give tenants details of social homes available for swap across the county to allow them to move to other properties. Existing tenants will be removed from the allocation framework and this should help local authorities to make more efficient use of their housing stock.
Homelessness
Section 6 of the consultation proposes ending local authorities homelessness duty (set out in Part 7 of the Housing Act 1996) once they have offered suitable private rented housing to a tenant (the tenancy offered must be for at least 12 months) in their area. This will give local authorities the power to decide what sort of housing is best suited to the tenant's needs, social housing or accommodation in the private rented sector. Local authorities will also still be able to offer social housing to end the homelessness duty if they choose.
Review of Housing Revenue Account system
The government intends to consult on reviewing the Housing Revenue Account (HRA) system (section 9). This intention was set out in the Spending Review 2010. The government intends to replace the existing system with a new self-financing arrangement where a one-off settlement payment is made between each local authority and central government based on each local authority's housing business. The valuations will consider each local authority's income and expenditure needs over 30 years and the level of housing debt.
The government intends to publish a policy document in January 2011 setting out the methodology behind the settlement and a model that will help local authorities to calculate how the self-financing arrangement will affect them. The new arrangements will be introduced in April 2012.
Housing investment in London
The government proposes to devolve decision-making relating to housing investment to the Mayor of London and London Boroughs by transferring the Homes and Communities Agency funding and functions to the Greater London Authority.
Responding to the consultation
The consultation closes on 17 January 2011 and responses should be e-mailed to: housingreform@communities.gsi.gov.uk.
Comment
The focus of the social housing consultation seems to be on flexibility, fairness and ensuring that local authorities use their housing stock to maximum effect, which will be necessary in the light of the cuts to the social housing budget announced in the Spending Review 2010. However, the proposals suggested do raise some issues:
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Is a likely effect of introducing short term fixed tenancies that tenancies in high-demand areas are likely to be shorter than those in low-demand areas. If so, will this force people to move into low demand areas or simply mean that they are likely to be far more instances of tenant's challenging their landlord's rights of possession in the county court.
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The consultation does not seem to suggest that there will be any kind of regulation of social landlord's policies, which could mean that there are huge discrepancies in housing allocation eligibility in different areas.
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The potential effect of some of these proposed reforms is that the gap between the cost of private rented housing and social housing is likely to close.
Many of the proposed changes are expected to be brought into force by the Localism Bill, expected in December 2010, and therefore more of the detail is likely to be contained in it.
