Following tonight’s successful event with John Healey MP, and the publication of the related Land for the Many: Changing the way our fundamental asset is used, owned and governed (an independent report commissioned by the Labour Party), this is the SLL Housing Group’s submission on last year’s Housing Green Paper Housing for the Many
1. Introduction & executive summary
The Society of Labour Lawyers is the legal think tank of the Labour Party. It is the pre-eminent professional association for lawyers on the left of politics and supports the Labour Party in developing legal policy and advising on legal proposals. In April 2018 the Labour Party published Housing For The Many: A Labour Party Green Paper, which set out the party’s policy in respect of social housing. The green paper followed two major policy documents on housing: ‘Secure homes for all’ is the title of section 6 Labour’s 2017 general election manifesto For The Many Not The Few; and Labour’s New Deal on Housing is a 20-page mini-manifesto dedicated to housing, endorsed by shadow housing minister John Healey MP. The green paper, as it says in the foreword, asks questions and is not the final word. In this response we welcome Labour’s promising housing policy proposals and offer technical and legal guidance as to how the principles could be implemented or improved. As the green paper focuses heavily on social housing (and, in particular, on building social housing) this response also comments on a number of areas of housing policy not covered by the green paper. In summary: • We welcome many of the proposals set out in the green paper, and offer some technical guidance on achieving its aims; • We are concerned that the green paper seeks to overhaul the concept of ‘affordable’ housing without analysing how the definition(s) apply in different legislative, regulatory, planning and public finance contexts; • We encourage an analysis of the housing crisis that looks beyond the numbers of homes in existence, and addresses the lack of access to current stock; and • We regret that the green paper focuses exclusively on complex long-term proposals to address the crisis in the social housing sector but overlooks 2 the easily achievable and important progress that can be made in the private rented sector.
2. The green paper’s questions
2.1. Labour’s new affordable housing
Q1. Do you agree with Labour’s new affordable housing definition? What weight should a Labour Government give to the components of our programme: social rent, living rent, and homes for low-cost ownership? Yes. In the housing context the word ‘affordable’ has become seriously discredited. Its abuse has allowed central and local governments, of all parties, to mislead the public as to the numbers and types of homes being built. Tying the definitions of affordability to local incomes, rather than local market values, is an important and welcome proposal. Because the UK’s housing market has an almost unique ability to inflate very quickly, definitions of ‘affordability’ based solely on market value can become inaccurate or misleading. While the lack of a formal definition of the word ‘affordable’ is a symptom of the pressures on housebuilders rather than a cause, fixed definitions for ‘social rented homes’, ‘living rent homes’ and ‘low-cost ownership homes’ should help to increase integrity and accountability. ‘Social rented homes’ should be given the greatest weight. We would welcome a commitment in the green paper as what proportion of the new homes will be council housing. It is disappointing to see that ‘living rent homes’ would be “aimed at low-to-middle income working families, key workers and younger people who want a better alternative to renting from a private landlord, or who want help saving a deposit for a home”: the UK has a rich and healthy tradition of mixed communities and widely available social housing, and it should be the aim of a Labour Government to restore that. Further, ‘living rent homes’ are described in terms of making savings with a view to home ownership rather than as affordable, secure homes in their own right. It is troubling that the green paper describes affordability as a precursor to ownership rather than a valuable resource in and of itself. It is important to clarify whether the new definitions would apply only to new builds, or to new tenancies of existing homes.
Q2. Do you agree with our proposal to scrap public funding for so-called ‘affordable rent’ homes priced at up to 80% of market rents? It is difficult to understand the proposal. The green paper says “A Labour Government will end the Conservatives’ so-called ‘affordable rent’ and direct all funding to Labour’s new affordable housing” – there is no explanation beyond that. Presumably current housebuilding projects would not be scrapped on the basis that they were commissioned on a previous definition of ‘affordable’. On that basis the proposal is welcome: public funds should not be spent on homes rented at 80% of the market value (especially with the troubling prospect of ‘for profit’ providers of social housing, which should not benefit from government money).
Q3. Are there specific steps beyond those set out in this Green Paper that could deliver an even higher level of Labour’s affordable housing? In order to make sure that new homes are as affordable as possible, the focus should be on new council housing rather than housing association homes (we welcome the “renaissance in council building” at paragraph 78). As council rents are cheaper the housing benefit bill would be lower, and a focus on council housing complements Labour’s ‘insourcing’ policy. The green paper does not contain any commitment to the proportion of the proposed new homes that would be affordable. Labour should commit– or at least announce an intention – to ensure that a very high proportion of new homes will be at an affordable rent. Q4. Do you have any other comments on our proposals in section three? The concept of ‘affordability’ has a number of different meanings in a number of different contexts. It is unclear whether the new categories are intended to be statutory definitions used in all contexts. It is also unclear how these new definitions would slot in to planning, public finance and various legislative schemes. For example, the Revised National Policy Planning Framework (July 2018) discusses requirements for affordable housing in various contexts but (at annex 2) gives four different and vague definitions of ‘affordable’. While the more specific definitions proposed in the green paper are an improvement, it is unclear whether the green paper proposes to transpose some or all of the new definitions of ‘affordable’ into the NPPF, or whether the new definitions are aimed at local planning authorities, social landlords, the First-tier Tribunal, private landlords, house builders etc. Given the disparate ways in which ‘affordable’ is used, simply re-defining ‘affordable’ may not be a particularly useful measure. In addition to re-defining ‘affordability’ we recommend that central government and local authorities should be required to be clearer about the number of homes being built. ‘New homes’ could be defined as meaning ‘net new homes’, taking into account any loss of social housing through, for example, estate redevelopment.
2.2. Delivering affordable homes for the many
Q5. How can Labour ensure appropriate powers and funding to build more affordable homes in all parts of the country? Borrowing caps and existing debt are preventing councils from building new council homes. A Labour government needs to review the existing regulatory and financial constraints on councils.
Q6. Do you agree with our proposals to stop the loss of affordable homes through right to buy, conversions to ‘affordable rent’ and the forced sale of council homes? In part. The right to buy, together with the rapid price increases made possible by the assured shorthold tenancy regime, are the foundations of the current housing crisis. The right to buy led to a massive loss in social housing. Many right to buy homes are now let at a profit – sometimes (perversely) to local authorities as temporary accommodation. The right to buy should be abolished rather than suspended with the scope for reinstatement if the council can show a ‘proven plan to replace homes’. That proposal opens the doors to confusion, disputes and litigation. Some governments may be more sympathetic to councils’ applications than others. In addition, it is not unknown for building projects to be changed or cancelled after land has been sold (as is clear from the recent agreements by Wandsworth and Southwark councils to reduce the number of affordable homes when development was already underway). Most importantly, sale of community assets through the right to buy should be opposed as a point of principle. We note that right to buy was abolished in Scotland in 2016 and that it is in the process of being abolished in Wales by the Labour administration, in implementation of Welsh Labour’s manifesto commitment. The proposal to stop conversions to ‘affordable rent’ is welcomed.
Q7. What additional measures could a Labour Government take to get councils, housing associations and others building more genuinely affordable homes? A Labour government should establish a register of vacant properties under section 151 of the Housing and Planning Act 2016, and amend the Neighbourhood Planning Act 2017 to allow councils to take temporary possession of empty properties in an emergency without the need for a compulsory purchase order. Alternatively, Labour should look at other measures of taking possession of empty homes, after an appropriate warning to the owner, and with compensation paid at limited levels, in order to let them at an affordable rent. Labour should decriminalise squatting. Historically, squatting movements have delivered homes at times of crisis: for example, a very large number of service families were housed through squatting movements after the Second World War while the ‘homes fit for heroes’ were being built. In our current housing crisis, the squatting of empty properties provide an immediate roof over head for those who would otherwise be rough sleeping. Civil remedies for possession of properties that have been squatted are quick, cheap and readily accessible. Criminalisation is unnecessary.
Q8. Do you agree with Labour’s proposal to set up an English Sovereign Land Trust? How else might Labour make more land available, more cheaply, to build genuinely affordable homes? Yes. Labour should consider legislating to ensure that ‘hope value’ is disregarded when land is bought for housebuilding. We also suggest that a sovereign land trust could be empowered to take any action against ‘banking’ or ‘hoarding’ of land on which homes could be built.
Q9. How can Labour ensure that estate regeneration maximises affordable housing and improves local areas, including in low demand areas? It is troubling that the green paper accepts the premise of estate regeneration. Many, if not most, housing estates are extremely robust and do not need to be knocked down. It is critical that estate residents are balloted on any proposal to destroy council housing, and that the residents are fully informed about the viability of the existing buildings. Demolition should be a last resort, unless the tenants and residents demand it.
Q10. Do you have any other comments on our proposals in section 4? We strongly welcome the proposals to reverse the limits on housing benefit (including the abolition of the bedroom tax and restoring housing benefit to under21s). We also welcome the commitment to obligations to secure affordable homes on where publicly-owned land is developed. We also welcome Labour’s support for housing associations on the basis that there will be a renewed expectation of social purpose.
2.3. Safe, Secure and Decent Homes
Q11. What could a Labour Government do to make affordable housing a first choice, not a last resort? This is a very surprising question. It is clear that affordable housing is a first choice for many people. Waiting lists for social housing are enormous – and probably inaccurate because of the number of people who see little point in joining the social housing register.
Q12. What can we do to make affordable housing more energy efficient? This is not within our area of expertise.
Q.13. What measures should form the basis of the fire safety criterion as part of a new ‘Decent Homes 2’ standard? Labour should pay close attention to the outcome of the inquiry into the Grenfell Tower Fire. Further, we support the proposals of the report Closing the Gaps: Health and Safety at Home (Universities of Bristol and Kent) for a new Housing (Health and Safety in the Home) Act.
Q.14. Do you agree with our proposals to increase social landlords’ accountability to tenants? What further measures could a Labour Government take? In our experience as housing lawyers, many tenants’ only significant engagement with their landlord is not through constructive engagement with a traditional housing officer, but instead through the ‘enforcement officer’ or ‘income officer’ threatening legal action for rent arrears. This is a very alienating experience. Many tenants also see an unfair discrepancy between landlords’ slow responses to complaints about disrepair or other problems and immediate action in response to rent arrears. In order to rebuild trust the law should be stricter in requiring social landlords to comply with pre-action protocols – perhaps through automatic adjournment on strike-out if it can be shown that the landlord has not complied (the current power is discretionary). One of the many problems that led to the Grenfell fire was that the TMO ignored residents’ concerns about fire safety, which is completely unacceptable. It also 7 demonstrates the lack of trust and engagement between tenants’ groups and landlords. In order to ensure that housing providers are responsive and accountable a Labour government should consider making the Housing Ombudsman and/or Local Government Ombudsman more accessible: under the current system tenants can only complain to the ombudsman after the landlord’s own complaints procedure has been exhausted.
Q.15. What more could a Labour Government do to ensure that there is sufficient specialist affordable housing for groups including those who are elderly, disabled or homeless? Labour needs to restore a full and accessible system of legal aid, going beyond merely reversing the cuts implemented by the Legal Aid, Sentencing and Punishment of Offenders Act. A fully-funded system of early help and specialist advice and representation is critical and we welcome the commitment to improve access to justice in light of the Bach Commission’s report. In addition, tenants’ organisations need to be respected and taken seriously. We repeat the suggestion about the Ombudsman services (Q.14).
Q.16. Do you have any other comments on our proposals in section 5? We strongly support the proposal to prevent the abolition of secure tenancies.
3. Beyond the green paper – policy principles
The starting point of Labour’s New Deal on Housing is that housing problems are beyond people’s control. There is a ‘housing crisis’ caused by systemic, rather than individual, failings: “For too long politicians in Westminster haven’t given housing the same priority that you give to your home. For too long, while you have done what is expected of you – working and saving to buy a home, keeping up on the mortgage, paying the rent – government hasn’t kept up its end of the deal. However hard you or your children save, it still gets harder to buy that special first home. However many hours you work or how much more you earn, the rent still eats up more of your pay packet. And however hard you try, if you fall on hard times, there’s often no safety net to catch you and your family if you can’t pay the mortgage or rent”. It’s certainly true that the housing crisis is beyond the control of ordinary people. It is welcome to see policies that show an understanding of the sense of powerlessness that many people feel in the face of the housing crisis. As housing practitioners we know that the problems people face go beyond difficulties in meeting their housing costs. Perhaps the most acute symptom of the housing crisis is limited access to the housing market: many people simply aren’t able to find suitable, affordable housing when they need to move home. In addition, too many homes are in an appalling condition. The Grenfell tragedy and subsequent failed health and safety checks across the country have exposed very real problems in the social rented sector, and even the Conservative government acknowledged the difficulties in enforcing standards in the private rented sector when it passed the ‘retaliatory eviction’ measures under the Deregulation Act 2015. Finally, as the green paper suggests, benefits cuts have deliberately and effectively made it difficult for people to meet their housing costs. The main flaw in the green paper is that it sees the existence of stock as the main barrier to accessing affordable housing. It is absolutely true that more socially rented homes need to be built but for most people the problem is the cost of housing, which is not necessarily determined by how many houses exist. An overinflated housing market, a deregulated private rented sector and the scandal of empty homes are just as prohibitive to affordable housing as lack of stock. We recommend that Labour looks beyond housebuilding for solutions. The proposal for a new department of housing is certainly welcome. Housing is a highly specialised, complex and multi-faceted area of policy. Without a dedicated ministry there have been significant shortcomings in the design and execution of housing law, such as the failure to implement the recommendations of the Lakanal House fire inquest. It’s also right that the manifestos and green paper point to the Conservative Party’s failure to propose any real policies in this area. Pledges to build more homes are trite, and the Conservatives have failed to commit to any remotely radical or interesting policies despite the significance of the housing crisis. It may also be helpful to be more explicit about their role in actively making things worse: stripping social tenants of their security of tenure, failing to replace ‘right to buy’ homes, increasing homelessness through benefits cuts, and much more.
4. Private renters
This is perhaps the area where Labour’s housing policy is least successful at meeting the promise of a ‘radical and credible’ new deal. Three-year tenancies, 9 proposed in the manifesto, is a familiar policy. It was part of Ed Miliband’s 2015 manifesto, and even the May government’s 2017 white paper (‘Fixing our broken housing market’) committed to consulting on encouraging ‘family friendly’ threeyear tenancies. The difficulty is that the assured shorthold tenacy regime (one of the main planks of the Thatcher government’s model for the private rented sector) is the root cause of many of the problems of the housing crisis. Rents are high and they rise extremely quickly, which leads to social cleansing and gentrification. Children are growing up in poverty. The insecurity and poor conditions are leading to mental illhealth. Perhaps most importantly, ‘no-fault’ eviction is the single biggest cause of homelessness. Three-year tenancies might slow the process down, but they are not a solution. In order to meet its aim of tackling soaring rent, increased use of temporary accommodation, rough sleeping and poor standards, there needs to be a significant change to the shorthold regime. There is increasing demand for a total end to ‘no fault’ evictions (including a resolution by members of the London Assembly, and Jeremy Corbyn’s announcement at the recent Crisis conference). Short of abolition, or as an interim measure, there must be limits on the use of the section 21 procedure. Landlords could be obliged to ‘buy their way out of the contract’ by returning a proportion of the rent if they want to use the ‘no fault’ mechanism (which would have the additional benefit of helping the tenants who can’t ‘save up for a deposit for a rainy day’). It’s not a radical argument to say that a person who pays the rent should be entitled to live in their home until they want to move out. Indeed, the mayor of London’s draft housing strategy (September 2017) acknowledged the pernicious effect of section 21 and says he is considering proposals for limiting its use. Limits on the use of section 21 would also help to achieve a form of inflation-based rent capping (which is a manifesto commitment): there is an existing mechanism for asking a rent assessment committee to adjudicate on rental values by comparing the rent to neighbouring properties (sections 13 and 14 of the Housing Act 1988). Many people are surprised to hear that we already have rent control in England and Wales because the procedure is effectively made obsolete by section 21, and amending the ‘no fault’ regime would regulate private sector rent. It is encouraging to see a commitment to better consumer protection, and the proposals for minimum standards, tackling rogue landlords and banning fees are excellent. However, consumer rights are hollow when tenants have such limited security, and without a more fundamental adjustment to the private sector model 10 the proposals may have a very limited effect. Any tenant who tries to stand on their rights can be evicted. The manifesto might benefit from borrowing from Mayor of London Sadiq Khan’s draft housing strategy. Many of the proposals are important (banning discriminatory ‘no DSS’ advertisements and other anti-benefit-claimant policies, banning agency fees) but could only be achieved by national legislation.
The manifesto made the admirable and bold commitment to end rough sleeping for good. Many people have been struck by the sudden and prolific increase in rough sleeping in recent years. It is right that the manifesto records some of the shocking statistics on contemporary homelessness. The manifesto also correctly points out the link between homelessness and the lack of affordable housing, cuts to welfare benefits and insecurity in the private rented sector. It might have been useful to note that local housing authorities are struggling to cope with their duties towards the homeless (recently expanded under the Homelessness Reduction Act 2017) because of cuts to their budgets. There is a tension between the ambitious aim of ending rough sleeping and the moderate proposals to tackle insecurity in the private sector (which is the single biggest cause of homelessness). Consideration should be given to expanding the scope of those who are accommodated through homelessness duties by local housing authorities (Part 7 Housing Act 1996). The “priority need” test could be abolished (as has happened in Scotland) or at the very least considerably widened (as being recommended in Wales). The Dickensian and mean-spirited test of “becoming homeless intentionally” could also be abolished (as is due to occur in Wales in 2019), at the very least for those who have a priority need. We note that the implementation of the Homelessness Reduction Act 2017 mean that far more people will be helped by local housing authorities at an early stage to prevent or relieve their homelessness, and will be helped to find their own accommodation. If the HRA is successful, then the issue about whether or not applicants should be accommodated directly by councils will become less pressing because applicants will never have experienced the crisis of immediate homelessness. In those circumstances, the criteria for those who should be accommodated directly can be much more generous.
6. The government’s green paper
In August 2018 the government has published its own green paper, A new deal for social housing. We welcome the government’s retreat from some of the most pernicious policies of the Housing and Planning Act 2016 – notably the mandatory abolition of lifetime council tenancies, and the forced sale of empty ‘high value’ council homes to fund the expansion of right to buy to housing association homes (we strongly believe that the climb-down was due to the powerful and effective grassroots campaigns and local government opposition). We agree with the widely-shared view that the green paper contains no meaningful proposals to fund the building of more social housing. The government has recently set a record low for building social homes, and it is difficult to understand from the green paper how it intends to recover from that. There are echoes of Labour’s green paper, both positive (the commitment to greater landlords’ accountability) and negative (the government prioritises home ownership even in a green paper designed to improve the conditions of social renters). The government also commits to a ‘tougher regulator’, but it is worth pointing out that this comes just a short while after the government introduced deregulation measures (which came into effect in April 2017). It is refreshing to see the government making positive noises about social tenants rather than falling back on stereotypes (although the government blames “society, the media and public servants” for driving negative stereotypes rather than its own narrative – and it is notable that the green paper unhelpfully categorises social housing tenants as being ‘inactive’ if they are not in work, education or retirement). The Society of Labour Lawyers’ housing sub-group intends to submit a full response to the green paper in due course.
7. Analysis and conclusions
The two main pillars of the housing crisis are the decimation of social housing (through right to buy, estate demolition and restrictions on building) and the assured shorthold tenancy scheme. Labour’s housing policy focuses almost exclusively on the first. It is excellent and crucial that Labour makes long-term plans to restore social housing. Labour’s policies will ensure that future generations will enjoy low-cost high-quality housing. We welcome many of the proposals in the green paper, as well as the overall principles. However, of the two pillars, the problems with social housing can only be solved with time, and a significant overhaul of regulatory schemes and public finance. The lot of private tenants, on the other hand, can be improved almost immediately and with minimal regulation. It is important that Labour commits to improvements in the private rented sector while the reforms of social housing are being implemented. We look forward to working with Labour’s new department of housing, and we are very happy to discuss the details of any housing policy proposals in the meantime.
Society of Labour Lawyers’ housing sub-group