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Affordability

Top Civil Servant in Charge of Housing Says Housing Crisis Will Continue Under Current Government Policies

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generation-rent

One of the Government’s most senior housing civil servants has admitted that new government policies will not end the housing crisis and that homelessness will continue to rise.

Questioned by MPs about why the Government is failing to build enough homes, the Permanent Secretary to the Department for Local Government Melanie Dawes admitted that Theresa May’s new policies will not stop the country’s housing crisis from continuing “as it has done for decades.” Miss Dawes added that she was “simply being honest” when she revealed that houses prices are set to stay out of reach of those who cannot offered a property and that homelessness will continue to rise.

The revelation  comes less than one month after after ministers launched a new White Paper “Fixing our broken housing market” which promised radical policies to solve the housing crisis and increase the supply of new homes.

When asked whether the housing crisis will ever resolve itself, Miss Dawes claimed that “It will continue as it has done for decades, I agree, and that will show itself primarily in affordability and in some places in homelessness”

Revelations about the UK’s inability to tackle the housing crisis comes as average house prices have surpassed ten times the average salary in some parts of the country. In November 2016, data published by the research firm Hometrack showed that with house prices in London are now 14.2 times the average salary. Cambridge, Oxford and Bristol  were also identified as highly unaffordable cities with house price-income multiples close to those in the capital. At the same time the number of households made homeless has risen to more than 50,000 per year.

Commenting on the comments made before the public accounts committee, Labour’s shadow housing minister, John Healey, claimed that Miss Dawes’ appearance confirmed the Government’s policies were not working. “It’s clear that the Government’s housing plans have failed, are failing and will continue to fail.”
“Since 2010, home-ownership has fallen, homelessness has more than doubled and affordable house-building fell last year to the lowest level in 24 years.
“After seven years in Government, there’s now a huge gap between the rhetoric and record of Tory Ministers on housing. We need less hot air and more homes from Ministers to fix this housing crisis.”

During the presentation of the Government White Paper in Parliament, the Communities Secretary Sajid Javid, said: “The housing market in this country is broken and the solution means building many more houses in the places that people want to live.”

Mr Javid also claimed that relative to population size, Britain has had Western Europe’s lowest rate of house-building for 3 decades. The Communities Minister claimed that the Government would honour its 2015 manifesto promise to preserve the green belt yet remove the Government’s role in land-banking and free up more public sector land more quickly. Furthermore, in a reversal of decades of housing proposals, the white paper indicated that new homes will be built to rent rather than for first-time buyers.

The extent of the housing crisis comes as data show that private sector rented housing is the most expensive and has the lowest standards of any housing type.  According to Parliament reports, private renters now spend an average of 49% of their income on rent despite nearly one-in-three privately rented houses failing to meet minimum government housing standards.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Housing Standards, Renters rights

Nearly 30 per cent of Privately Rented Properties in Britain Fail to Meet Minimum government Housing Standards

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poor housing renters alliance

Nearly thirty per cent of privately rented properties in the United Kingdom fail to meet the  British Government’s minimum property standards. Perhaps more alarmingly a research paper published last year by the House of Commons research department admitted that since 2006 there has effectively been no minimum property standards for private rented housing in England.

Although there are rules which govern the actions of private landlords in the UK which include repairing obligations, these are virtually impossible to police by local government housing officers. Currently the enforcement of housing standards in England and Wales is carried out using a risk-assessment based regulatory model which replaced the Housing Fitness Standard in 2006.

According to the British Parliament research report, the private rented sector has the worst standards of any rental property type. Twenty-nine per cent of privately rented properties would fail to meet minimum standards compared with fourteen per cent of social housing. Furthermore, the report states that since the abolition of the Housing Fitness Standard “there have effectively been no minimum property standards for rented housing in England.”

Since the 1980s proportion of the UK population who are homeowners has declined steeply as new house building has failed to keep pace with population increases.  At the same time,  Britain’s private rented property sector has been largely deregulated in a process begun under the former Prime Minister Margaret Thatcher. Prior to this UK local government authorities maintained large numbers of properties which were let to the public on long-term letting contracts.  The government’s holdings of this housing stock has been reduced greatly as many properties have sold to the public leaving the property rental sector increasingly dominated by private landlords.

The seriousness of the housing crisis in the UK is often the subject of debate in the British Parliament. In February the London MP Karen Buck claimed that nearly 750,000 properties in London have a category one hazard which includes excess cold, fire hazards, asbestos and carbon monoxide among other risks. Ms Buck also added that despite the severity of poor and dangerous housing standards in the British capital, only 250 landlords had been prosecuted for poor housing per year over the last eight years across the UK.

There have been several attempts to introduce minimum housing regulations in Parliament. In late 2015 Ms Buck proposed a “Fitness for Human Habitation Bill” to require that residential rented accommodation be provided and maintained in a state of fitness for human habitation. This proposal however failed to progress past the second reading stage and was dropped from Parliament’s schedule.

In addition to the effective lack of private rental housing standards, council authorities in the UK are also struggling to deal with complaints about poor housing. Last year in the House of Lords the Liberal Democrat peer, Baroness Bakewell, revealed that in 2012-13 little over half of housing complaints resulted in a council inspection. Of the 62,818 complaints received over the time period, only 31,634 inspections were carried out. This resulted in only 1,645 improvement notices being served, 2.6% of the total number of complaints. The most common categories of hazards and faults identified in inspections were: damp and mould, excess cold, overcrowding, falling hazards and fire.

Besides having the lowest property standards, privately rented properties are the most expensive housing type in the UK. Private renters now spend an average of 47% of their income on rent compared with 23% of the income of people with a mortgage and 32% for those in the social rented sector. These findings come as 11 million people now rent privately in the UK, a figure which has almost doubled in the last decade and is set to increase to around 22 million by 2030.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Affordability, London

Central London House Prices Underperform the Rest of the UK Falling the Most in Six Years

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London price decline

House prices in London posted their largest yearly fall in almost six years in February according to the property website Rightmove. The figures represent the first annual decline in London house prices since April 2011.  It is believed that high asking prices and fears over Brexit have been putting off buyers.

While February asking prices are up compared with January, the 2.6 per cent increase is the weakest monthly gain for a February since 2009 during the height of global financial crisis.

Across the capital, house prices fell by 0.4 per cent compared with last year with the average property in London now costing  £641,116. Reversing the trend of a stronger performance compared with the rest of the UK, the London housing market under-performed the rest of the country during 2016. The latest sign of housing market weakness continues the trend set in the second half of last year. In addition to Brexit fears, tax increases on investors in the early part of the year have been suggested as factors in reducing demand for prime London real estate.

Nationally annual house price growth slowed to the weakest in almost four years this February with average property asking prices rising 2 per cent to £306,231. This represents the weakest February property performance since 2009 well below the 5 percent average gain for the month over the past seven years.

The picture across London as a whole is more mixed. Central London led the price slowdown with asking prices falling 2.1 per cent compared with February a year earlier whereas  Outer London suburbs registered a price increase of 1.4 per cent. However, comparing the relative performance between January and February, inner boroughs outperformed as owners of more expensive homes boosted the average by listing their properties for sale after the Christmas break.

Continued

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Rightmove claims that potential buyers may also have become price-sensitive as inflation erodes real incomes. The company’s director miles Shipside added: “Perhaps we’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and a dose of Brexit uncertainty. Values have boomed since 2013, so it’s not surprising that upwards price pressure is running on tired legs.” 

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Government, Housing Standards

Nearly One-in-Three Private Rented Houses Would Fail Government Minimum Housing Standards

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Private rented houses worst property type

Nearly one-in-three privately rented properties would fail the Government’s minimum property standards for social housing according to the the 2014/15 English Housing Survey. Even more alarmingly, a House of Commons research report published last year admitted that there has effectively been no minimum property standards for private rented housing in England since 2006.

Although there are statutory provisions governing private landlords’ repairing and maintenance obligations, enforcement of standards in private rented housing in England and Wales is mainly carried out through the Housing Health and Safety Rating System (HHSRS). This system is essentially a risk-assessment based regulatory model used by local authority environmental health officers. The House of Commons report states that: “since the introduction of the HHSRS in 2006, replacing the old Housing Fitness Standard, there have effectively been no minimum property standards for rented housing in England.”

Overall the private rental sector in England has worst standards of any rental property type. Twenty-nine per cent of privately rented properties would fail to meet minimum standards compared with fourteen per cent of social housing.

Despite the seriousness of the issue, several failed attempts have been made in Parliament to establish minimum housing criteria. Notably the MP for Westminster North, Karen Buck proposed a Private Members’ Bill which was adjourned on its second reading debate on 16th October 2015. The “Fitness for Human Habitation Bill” sought to amend the Landlord and Tenant Act (1985) to require that residential rented accommodation be provided and maintained in a state of fitness for human habitation,

In addition to the effective lack of private rental housing standards, local authorities are also struggling to deal with housing complaints. In 2016, the Liberal Democrat Peer, Baroness Bakewell revealed that in 2012-13, little over half of housing complaints resulted in a Local Authority inspection. Of the 62,818 complaints received over the time period, only 31,634 inspections were carried out. This resulted in only 1,645 improvement notices being served, 2.6% of the total number of complaints. The most common categories of hazards and faults identified in inspections were: damp and mould, excess cold, overcrowding, falling hazards and fire.

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Furthermore, despite having the lowest property standards, the private renting is also the most expensive housing type. Private renters now spend an average of 47% of their income on rent compared with 23% of the income of people with a mortgage and 32% of the income for those in the social rented sector.

These findings come as 11 million people now live in private rented accommodation in England, a figure which has almost doubled in the last decade and is set for further increases.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Fraud, Scam

Rogue landlord who conned more than 100 tenants jailed for 45 months and ordered to pay £225,000

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Housing scam Manchester
Tahir Khaliq was jailed for 45 months (Photo: National Trading Standards)

 A rogue landlord who exploited over 100 tenants has been jailed. Tahir Khaliq, 49, who ran a chain of letting agency firms from his office in Bury, Greater Manchester accepted holding deposits from multiple prospective tenants for the same same property then claimed they all failed credit checks and kept the cash.

During his trial at Bolton Crown Court, it was revealed that Khaliq also falsified home insurance claims and left many tenants living in squalid properties.

Khaliq is previously know for sharp practice. In 2012 he was the subject of a Channel Five ‘Cowboy Traders’ investigation into one of his firms Lancashire Lettings.

Perhaps his most lucrative scam was deliberately failing credit checks for prospective tenants and pocketing their holding deposits. Khaliq asked prospective tenants who wished to rent one of his properties to pay a  holding fee/deposit of £200 to £400 to take a property off the market.

However, unknown to the tenants, money was collected from several other prospective tenants all hoping to rent the same property. Once the money was collected, Khaliq informed them that they had failed credit checks and refused to refund their money. He further instructed his staff to participate in the scam ordering them to accept but never return the holding deposits.

Khaliq also arranged for fake home insurance claims to be submitted with fabricated quotes and invoices with the help of employee Paul Dickinson.

Prosecutor Andrew Thomas told the court the “blatant” insurance scam worked by submitting genuine-looking but inflated quotes from two invented firms.

The prosecutor also revealed that Khaliq used the pseudonym ‘Jack Daniels’ in these transactions in a bid to hide his identity from complainers.

Mr Thomas said: “It was blatant dishonesty. Lies were told to fob off those who wanted their money back.

“Many of the victims were vulnerable people, mainly people on low incomes who were struggling to obtain adequate housing.

“Many of the tenants were on housing benefits and not well off and very often vulnerable because of financial circumstances or other difficulties.”

“Lies were told about two things: who was living in the property and the fabrication of estimates and invoices for repair work.

“Internal emails showed Paul Dickinson was the author of the bogus documents and Mr Khaliq was involved.

“In reality the works were done by their own handymen at a fraction of the cost.”

A third scam also saw Khaliq and Dickinson collect rent for 119 properties they managed on behalf of liquidators Ernst and Young – which a court heard they failed to pass on.

Khaliq also instigated a council tax avoidance scheme perpetrated against Bury and Bolton councils. He also arranged for counterfeit accountant letters to support a £3million Co-op Bank loan application.

Khaliq admitted two counts of making an article for use in fraud, two of conspiracy to commit fraud, one of theft and three counts of fraud. He has now been sentenced to 45 months in prison and has been ordered to pay back £100,000 and pay court costs of £125,000. He was also disqualified from being a company director for 10 years.

During sentencing,  Judge Graeme Smith told Khaliq: “You instigated and directed several different fraudulent schemes.

“Though some were directed at institutions such as banks and insurance companies, one of them caused harm to those in a vulnerable position.”

Dickinson, of Leigh, Greater Manchester, admitted theft and six counts of fraud and was given a two year suspended sentence. He was also ordered to pay £24,280 and prosecution costs of £15,000, was disqualified from being a company director for six years and told to complete 240 hours of unpaid work.

Judge Graeme Smith told Dickinson he was suspending his sentence so he could dedicate his spare time to his 10-year-old twin sons – one of whom is seriously ill.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Affordability, Renters rights

Private renting virtually impossible for benefit claimants

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House to rent no dss

Increasing numbers of Housing Benefit claimants are being excluded from the private rental sector as the number of properties listed as ‘No DSS’ grows according to a House of Commons Briefing Paper. ‘No DSS’  (standing for “Department of Social Security” which was replaced by the Department for Work and Pensions 16 years ago) means the landlord or agent won’t rent a property to someone on housing benefit or local housing allowance.

The House of Commons reports corroborates anecdotal evidence from the Hackney-based private renter information and campaign group Digs which found only one studio flat on the market available to Housing Benefit claimants in a survey of 50 local estate agents between December 2015 and February 2016.

Despite calls from  renters rights groups to outlaw the proscription of renters receiving state benefits on discrimination grounds, the House of Commons briefing paper stated that such restrictions on Housing Benefit claimants is “unlikely to amount to direct discrimination as income and employment status are not protected characteristics under the Equality Act 2010.”

The paper also highlighted other factors which may be exacerbating landlords’ reluctance to let to Housing Benefit claimants which include:

  • uncertainly around the roll-out and implications of Universal Credit
  • the payment of Housing Benefit in arrears
  • restrictions in mortgage agreements and insurance requirements
  • impending tax changes resulting in landlords focusing on “less risky” tenants.

The House of Commons report was soon followed by significant coverage of the publication of a list of banned tenant types from Britain’s biggest landlord, Fergus Wilson, which included tenants receiving benefits. Mr Wilson also included workers on zero-hour contracts, single parents, battered wives and plumbers on his list of undesirable tenant types.

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In addition the the reluctance of many landlords to rent to people on benefits, mortgage lenders may also be exacerbating this situation. In 2012 for example, the buy-to-let lender, The Mortgage Works, stated that no new mortgages would be advanced to landlords whose tenants received benefits. This condition was later withdrawn after significant negative press coverage. Other property letting websites also include a search filter to screen out properties which do not allow tenants on benefits.

This situation is of such importance to large numbers of renters that the housing charity Shelter has published a guide for benefit claimants to  convince a landlord to rent to them.

 

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Government, Housing Standards, Renters rights

Renters in shared housing to gain from increased protection

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housing_inspection

Around a million renters living in HMOs (Houses in Multiple Occupation) will soon benefit from extra protection from rogue landlords being planned by the government.

HMOs, familiar to many students and flat sharers, are defined as properties shared by more than one unrelated persons. Typically these may be groups of friends such as is common for student accommodation or by strangers.  Typically the house sharers will have their own bedrooms but will share communal areas such as bathrooms or kitchens.

Under the government’s proposals, tenants living in a HMO may soon benefit from:

  • minimum room size standards (6.52m2 for one person rooms and 10.32m2 for double rooms)
  • improved waste disposal facilities
  • tackling rogue landlords through the introduction of a fit and proper person test for HMO landlords

Most significant is the proposed extension of the HMO licensing regime to include small HMOs which are currently exempt from mandatory licensing.

To date only large HMOs (3 stories or more) require mandatory licensing. The government seeks to extend HMO licensing to all properties irrespective of size and will push all HMOs with five occupants or more from two different households into the mandatory HMO licensing regime (with the exception of purpose built flats).

Due to the higher risk of poor quality housing in HMOs complex licensing regimes exist which may vary significantly across the UK. The move to license all HMOs will also help reduce such  regional variation in licensing regimes and housing standards. These extra renter protections will enhance currently existing license checks for properties which currently include minimum building quality standards (gas/fire safety) and the payment of a license fee.

Currently landlords operating an unlicensed HMO which requires licensing are liable for criminal prosecution and may be subject to an unlimited fine. Under such circumstances tenants may apply for a Rent Repayment Order to receive  refund of up to 12 months’ rent on the property.

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Housing, Landlord, Renters rights

Britain’s biggest landlord bans ‘battered wives’ and zero hours workers as tenants

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Fergus Wilson and his wife Judith CREDIT: REX FEATURES
Fergus Wilson and his wife Judith CREDIT: REX FEATURES

Britain’s biggest landlord, Fergus Wilson has banned “battered wives” from his properties claiming he does not want to risk ex-husbands or boyfriends returning to destroy his houses.

Perhaps Britain’s most notorious buy-to-let landlord, Wilson is no stranger to controversy.  In 2014 he sent eviction notices to over 200 of his tenants, many from low income backgrounds, claiming that he was “sending battered wives back to their partners to be beaten up again”.  He was also convicted in the same year for assaulting an estate agent over a broken boiler which he denied, claiming that he was “too fat to punch anybody or even tie his own shoelaces”.

Posted for residents of Ashford (Kent), the list of unacceptable tenants include:

  • Zero hours workers
  • Battered wives
  • Tenants on housing benefits
  • Tenants with children under 18
  • Single parents
  • Plumbers
  • Smokers
  • People with pets
  • Low income workers

Despite Mr and Mrs Wilson’s estimated wealth of £200 million, the couple are known for penny-pinching. In 2014 Fergus Wilson lost a court battle to charge a tenant £3,000 for a broken toilet lid even though the tenant had offered to replace it out of his own pocket. Judith Wilson is also believed to owe £3,000 in court costs after a failed attempt to sue a gas engineer for £5,000. The Wilsons had claimed that the engineer’s decision to issue an “At Risk” notice on gas equipment in one of their properties had made the house unrentable. Such considerations factored into Fergus’ decision to ban plumbers as tenants in his latest letting criteria since he believes they “rip him off” about repairs and “invent” problems with the properties which he says they bill him for.

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Fergus Wilson’s ban of domestic abuse victims comes after the 69-year old’s unsuccessful bid  to stand as an independent candidate for Kent’s Police and Crime Commissioner last year which was blocked  for incorrect submission of nomination papers. It was also expected that Wilson’s candidature would be deemed ineligible for a conviction of assault for which he was fined £500. Wilson, who planned to stand as an independent, intended to run on a platform of tackling domestic violence saying that he was particularly concerned by two domestic abuse cases involving Kent Police and would have used his £85,000 salary to fund a rapid-response team of four officers.

Commenting on the tenancy rules Fergus said the criteria are revised every year and are concerned with “financial fine tuning of the business” adding: “it is just economics… I live in the big bad world of reality, if I do not let properties and do not get the rent then I do not eat, I starve to death… it is the Government’s job to help poor people.”

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Affordability

One in five private rented homes suffer fuel poverty

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fuel_costPrivate sector renters are one of the groups with the highest risk of suffering from fuel poverty according to figures recently released from the Department for Business, Energy and Industrial Strategy.

More than 2.3 million families, equivalent to around 10% of households, are living in fuel poverty in England.  The situation is particularly bad for private sector renters with one in five households renting from private landlords affected. The highest risk however, at 25% of all households, was found for single parents with dependent children.

Overall Birmingham is the most affected city in terms of absolute numbers with around 60,000 households unable to afford adequate heating with Leeds, Cornwall, Manchester and Liverpool occupying the top five local authorities where households struggle with heating costs. In terms of the proportion of households classified as fuel poor, rural areas of England are the worst affected, with more than 20% of households on the Isles of Scilly classified as fuel poor. Other areas identified as badly affected include Eden in Cumbria, Richmondshire and Ryedale in North Yorkshire, and West Devon.

Officially a household is in fuel poverty if its income would fall below the official poverty line after subtracting the cost needed to adequately heat a home. It has been calculated that on average households which meet this definition would require an extra £371 to be able to adequately heat their homes.

The issue of fuel poverty and energy costs is a recurring theme in UK politics. Reacting to the report, the shadow business secretary, Clive Lewis said that the figures showed that the Conservative Party had to take action to tackle high energy prices charged by the big energy companies.

“Under the Tories’ lack of an energy plan, Britain is facing an energy bill crisis, with over 2 million families who can’t afford their energy bills.”

Mr Lewis continued to assert that a Labour government would confront the problem by increasing clean energy generation capacity and tackling energy bill rises for households.

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To date the successive Conservative governments of David Cameron and Theresa May have favored the provision of greater consumer information and the easy switching of energy supplier as a mean to reduce household fuel expenditure. These include announcements earlier this month that the business department would publish an energy supplier league table to allow consumers to better assess their energy usage and compare energy suppliers. However, some critics of these proposals note that tariff transparency has been promoted throughout the Brown and Cameron administrations with relatively little effect on reducing household energy bills.

Announcing the league table measures, the business secretary, Greg Clark, said: “Millions of people across Britain continue to pay too much for their energy. The measures announced are a positive step to help more people benefit from increased choice and competition.As the government has made clear, where markets are not working for consumers – in energy or otherwise – we are prepared to act.”

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Affordability, Housing, London

London house prices predicted to fall 5% in 2017

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London House Prices Predicted to Fall 5 per cent

Property prices in central London are expected to fall by 5 per cent in 2017 according to property data firm Rightmove.

The situation across London as a whole however was mixed with a significant variations between market conditions in prime central London and peripheral areas.  Outer London property prices are expected to see an approximate 3% increase in prices in 2017 Rightmove suggests with prices across England and Wales expected to rise by two per cent as a whole next year.

Brexit uncertainty continues to be a serious issue  with respect to property price forecasting. As yet the government’s desired outcomes and the negotiating position it will adopt following the triggering of  Article 50 to begin the two year countdown to leave the European Union remains unknown. Prime Minister Theresa May says she is committed to triggering the start of formal Brexit negotiations by the end of March next year and is expected to make announcements on the Government’s preferred future relationship with the EU in the New Year.

The disconnect between property prices in central London and the rest of the UK may be symptomatic of London’s traditional early reaction to changes in the British economy. During the 2007 global financial crisis and subsequent recession, prime London properties were the first affected by the downturn but were also the fastest to recover.

To date predicted negative economic data following the UK’s decision to leave the EU have failed to materialize. The British Chambers of Commerce revised up its forecast for economic growth next year but downgraded the outlook for 2018 due to inflation pressures and ongoing economic uncertainty about Britain’s future trading relationships with the EU. In terms of GDP forecasts, the Chambers revised upwards UK GDP growth forecast to 1.1% from 1% for 2017 after stronger-than-expected economic performance following the June Brexit vote.

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