by Terry Cunnew
In its White Paper on housing(*), published on Tuesday, the Government is sticking very firmly to its conviction that the solution to housing’s ills lies chiefly in the private sector. While it is accepted that there is continued need for public sector provision of housing for the needy, even here the White Paper contains a commitment to seek ways in which the private sector can contribute towards its provision.
The White Paper sets out four main objectives for housing policy as a basis for future legislation:
- First, there is a firm commitment in continuing to promote home ownership.
- Second, there is a determination to revive the private rented sector, both by making traditional private renting once more economically attractive, and by encouraging greater private sector involvement in housing associations’ work.
- Third, local authorities will be encouraged to change and develop their housing role, acting increasingly as enablers rather than as traditional landlords.
- Fourth, the Government will target public money to give a better deal to tenants, partly through the creation of new Housing Action Trusts (HATs) to build on the success of the Urban Development Corporation.
In the owner-occupied sector, the Government intends to strengthen the right-to-buy provisions by giving tenants power to take action in cases where recalcitrant local authorities drag their heels. In such cases, the Government proposes to give the tenant the power to serve a notice on the landlord to proceed.
If the landlord still fails to act, the tenant will be given the power to pay the rent to a deposit holder instead of the authority and to deduct that rent plus accrued interest from the purchase price when a sale finally goes ahead.
There is recognition that in the owner-occupied sector there will still be those who need assistance in meeting the costs of repairs and maintenance. The present four types of improvement grant are to be replaced with a single mandatory grant to enable needy owners to bring their property up to a new standard of fitness.
Above that set standard, further grant provision will be at the discretion of the local authority.
Grant entitlement, currently based on ratable value, will instead be means tested on the basis of household resources.
Home insulation grants will be brought within the same broad statutory framework as the new home improvement grant system.
Turning to the private rented sector, the White Paper notes that the Government has already gone some way towards a revival with the assured tenancy provisions of the Housing Act 1980, along with the new short-hold lettings structure introduced in the same Act.
And essentially, the Government intends to promote private sector tenancies by extending those provisions.
From the date that the new legislation comes into effect there will be a choice between a freely negotiated rent under an assured tenancy, but with the restraint of security of tenure, or a shorthold letting with a registered market rent, but no security of tenure.
Under the revised rules for assured tenancies, it will be possible for individuals to grant such a tenancy; landlords of assured tenancies will no longer have to be approved by the Secretary of State; and renewal procedures will be simplified.
Revisions for shortholds will mean that registered rents will not be at the so-called “fair” level but at a market level taking account of the limited degree of security. At the same time, the minimum length of a shorthold lease will be cut from a year to six months.
It is planned to remove most of the controls over new lettings by resident landlords but, aside from some changes in the succession rules, there will be no substantial amendments of the regime for existing tenancies subject to the Rent Acts.
Of the role of housing associations, the White Paper notes that they now account for some 25% of the admittedly diminished independent rented sector. However, they have been heavily dependent on the Exchequer for financial support since they have been restricted financially by the low level of “fair” rents determined by rent officers.
In future, it is planned that all new lettings by associations will be on assured or shorthold leases, which is intended to enable the associations to have the freedom and flexibility to meet the needs of private sector funding sources.
The role of local authorities as landlords is set to be markedly reduced by proposals which will give tenants the power to opt out and transfer their tenures to alternative landlords.
Tenants will be given the power to transfer their homes to the control of an approved landlord, who may be either an established housing association or a commercial body. They will also have the power to form a co-operative in association with their neighbours.
Legislation on many of the proposals in the White Paper will be included in a Bill to be introduced in the present session, but others — including reform of the local authority housing financial regime — will be the subject of further detailed examination.
(*) Housing: The Government’s Proposals. HMSO £3.30.
