Responding to Housing Challenges SDP 290311 Presentation

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Responding to Housing Challenges
Sustainable Development Partnership
29 March 2011
Main challenge: Pace and extent of
change
25 major policy announcements/changes over last 6
months
Decent Homes Funding
New Homes Bonus
Localism Bill - Local Decisions: a fairer future for social
housing
Reform of Housing Finance – effective April 2012
Pan London mobility proposals from GLA – April 2011
Welfare Benefit Bill 17 Feb – changes start April 2011
Main challenges: resources
60% Reduction in funding for new housing from £8.5bn to
£4.5bn.
No new money in 2011-12, negligible in 2012-13.
Government aim for 150,000 new homes by introduction of
“affordable rented” homes at up to 80% market rents.
Funding for regeneration schemes? H&L, Excalibur,
Deptford, Catford Town Centre
Investment in Existing Homes/Decent Homes £1.6bn
available - £1.5bn needed in London alone – LBL Bid =
£94.5m v £186m/£154m/£126m
New Homes Bonus – Estimated £705k per year for
Lewisham, plus £119k affordable housing enhancement,
£4.2m after year 6
Localism Bill and “Fairer Futures..”
Introduced to Parliament Dec, 2ndReading 17 Jan (same day as
consultation ended)
Raft of proposals affecting LAs and housing providers:
 Tenure reform – 2 year tenancies
 Affordable Rents – up to 80% market rents
 Homelessness – discharge into the private rented sector





Allocations - housing list no longer open to all – Band 4?
Change to HRA subsidy system – self financing, more local
control from 2012 but won’t cover decent homes
Increase in Non Dependent Charges and 30th percentile from April
Single Room Rate from Jan 2012
Universal Credit from 2013
Headline changes – For HB
From April 2011
LHA rates set at 30th percentile for all new claims
LHA rates set at 30th percentile for all existing claims but deferred for 9 months – 5,100 private-rented
sector residents, an average loss of £12 p/w, an overall reduction of around £3.44 million per year
DHP fund increased
Extra bedroom for a carer where claimant needs overnight care
Non-dependant deductions increased for next 3 years – 941 claimants, average weekly cost from £3.20
£6.80, estimated annual loss of £183,000
From Jan 2012
Extending “single room rent restrictions” to all single claimants under 35 - 896 single residents aged
between 25 and 34, annual reduction of £3.8m
From April 2013
From 2013 LHA levels up-rated on the consumer price index (not RPI)
Universal Credit Introduced - £350 for single person/£500 for family
From April 2014
Restricting HB for public sector residents (Council and RSL) under occupying their
properties - 2,138 Council properties are currently under-occupied
Flexible Tenancies – what does it mean?
Lifetime tenancies for existing tenants will not change.
Councils and HAs can grant fixed term tenancies, but can also
choose to continue to grant lifetime tenancies.
Fixed term tenancies (FTTs) will have the same rights (to
repair, to buy etc)
FTTs can be for a minimum of 2 years
Landlords will work with tenants to find alternative
accommodation at the end of the fixed term.
All Councils will publish a Strategic Policy on Tenancies in
consultation with key local stakeholders.
Individual landlords will publish their own policies on
tenancies, consistent with the LA strategic policy and a
“Tenancy Standard”.
Affordable rents and a new funding model for
affordable housing
New rents will be offered by RSLs (not Councils) from July
2011 for new build and an (undisclosed) proportion of the
relets.
Landlords will set rents between current social rents up to 80%
of market rents. RSL bids to be placed by 3rd May
Some RSLs looking to apply rent uplift at a lower % across all
tenants (60% - 65%) but pressure is on for 80%.
LAs will let through existing CBL schemes.
Hard choices for tenants needing to move and anyone in
housing need
Council and ALMO housing will become more polarised
Potential local impacts of affordable
rents for Lewisham residents
LHA based on 30th
percentile (VOA
figures)
Bed
size
One
bed
s/c
Two
bed
Thre
e bed
Four
bed
Inner SE
London
BRMA*
Outer SE
London
BRMA
Median
market
rents
(SELHP^
data)
80%
median
market
rents (based
on SELHP)
60%
median
market
rents (based
on SELHP)
50%
median
market
rents (based
on SELHP)
Average
Council
rents (inc
service
charges)
Average HA
target rents
(inc service
charges)
173
146
186
149
112
93
73
86
209
173
254
203
152
127
83
97
265
207
296
237
178
148
94
107
345
265
462
370
277
231
102
121
NB: Highlighted cells represent rent levels that will exceed Local Housing Allowance
levels for the Outer SE London BRMA based on 30th percentile (approximately 90% of
LBLs stock is within the Inner London BRMA)
* BRMA = Broad Rental Market Area
^ SELHP = South East London Housing Partnership
Summary of Comparison using SELHP Data
The percentage by which the “affordable rents” would
exceed current HA target rents (including service charges)
are outlined below:
1 bed
2 bed
3 bed
4 bed
80% rents
60% rents
50% rents
73%
30%
8%
109%
57%
31%
121%
66%
38%
206%
129%
91%
Revised Rent as a % of the £350/£500 universal
welfare benefit cap
1 Bed
80% Market or LHA
60% Market or LHA
50% Market or LHA
Target rent as % Benefit cap
2 Bed
49%
37%
30%
25%
3 Bed
42%
31%
26%
19%
4 Bed
44%
33%
28%
21%
(N.B. these figures use current, existing LHA levels)
74%
55%
46%
24%
Fixed Term Tenancies – Lewisham’s
developing view:
LBL cautious approach and committed to security of tenure or minimum 5 year FTT if there is no
option
Assessing overall impacts of all proposed changes (inc welfare benefits; affordable rents; new
development agreements) before finalising position. Unlikely to introduce for up to a 1 year after more
detailed evaluation and consultation completed.
When appropriate LBL would consult widely, but strategic tenancy policy could include:

Lifetime tenancies for:
 All older people (over 65?)
 Residents with serious permanent physical or mental vulnerabilities

Flexible tenancies for:
 families occupying large family homes that are a premium within the locality (with review
when youngest child 18)
 households occupying properties that have benefitted from major adaptations
 those with health problems regarded as temporary
 those who face a temporary crisis from which there is a good prospect of recovery
5 year minimum for all fixed term tenancies;
High expectations around landlord support throughout tenancy;
Locally agreed and published RPs policy/procedure for the use, maintenance and ending of Fixed Term
Tenancies
We would wish for RSLs to fit within the LA Strategic Policy
Affordable Rents: Lewisham’s developing
view:
Keen to work with Partners on response to Framework
Will Consider LA powers through Planning and Section 106
80% market rents do not work generally but especially not for family units
Urge RSLs not to set affordable rents higher than or close to the LHA levels
Would like to see no more than 30% of household income or Universal Credit
spent on housing
Keen to negotiate with RSLs to support local new developments and regen
schemes
Default position lowest rents possible for all tenants
Support parity of rent levels at a lower rate across a wider tenant group to
minimise the high end impacts
Concerns about the impact of affordable rents and fixed tenancies on mobility
Serious concerns about the % of relets that may be set at higher rents
Still forming views about which households to target the higher rents e.g. those
on benefits or earning – flexibility for household circumstances and in different
parts of the borough might be the way forward
Issues to consider
Reduced options for moving home with higher rents and shorter tenancies
Affordability/Poverty trap worsens


Benefit cuts for under occupiers of working age in social housing
Rents increasing higher then benefits (CPI v RPI)
Return to concentrations of poverty and vulnerability in council housing
Migration - from expensive to cheaper areas/ out of London altogether?
Return to focus on producing 1 / 2 bed units as larger units do not stack up
Reduction in new housing supply
Limited Capacity to Discharge Homeless into PRS / LHA at saturation point
Increase in HMOs due to Single Room Rate for under 35 year olds
Increased Administrative burdens with new range of tenancies and rents
Impact on vulnerable adults/ households may be particularly acute
Impact of Multiple Changes?
Going Forward: some current priorities
Agreeing LBL position on some of the key areas
like fixed term tenancies and affordable rents;
Work with RSL and other partners to mitigate
most difficult impacts;
Develop comms strategy for communicating
changes to tenants
Develop key issues into a strategic tenancy policy
to go out to consult local residents and key
stakeholders
Review Allocations Policy and Consult
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