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0:01 AM, 21st March 2023, About A year ago 72
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One council has revealed that it’s going to buy 300 homes, worth up to £600,000 each, in a bid to provide emergency accommodation for those being made homeless.
Councillors at Lewisham Council have been alarmed by the rapid rise in the number of families who are reporting as being homeless – or say they are at immediate risk of losing their home.
The council says that the most common reason given by people for becoming homeless was relatives or friends asking them to leave.
However, a council report also highlights that landlord evictions in the borough are also on the rise.
The report states: “There continues to be an increasing percentage of private landlords choosing to increase their rent in line with market prices or choosing to no longer rent out their properties resulting in them disposing of the properties altogether.”
The report goes on: “In 2019/20, this accounted for 19% of all [homelessness] acceptances which has increased to 26% in 2022/23 (year to date).”
Lewisham is also building 2,000 new homes from 2026 to help reduce waiting lists but now needs specific homeless accommodation.
By purchasing the properties outright, the council says it is hoping to reduce its emergency accommodation bill and deliver ‘consistent living standards’.
The council has not yet revealed how much it is setting aside to pay for the property purchases and last year spent more than £143,962 on hotels for homeless families – that was four times higher than was spent on homeless accommodation in 2020/21.
The council says that the number of people approaching it saying they have lost their home has rocketed in two years by 31% to 3,723 – up from 2,833.
In January, Lewisham says it was housing 2,780 families in temporary accommodation – a rise of 60% in seven years.
The council’s report also warns: “Many landlords report that they intend to sell their properties due to reduced cash flow caused by higher interest rates.
“Additionally, many landlords took the opportunity of the strong sales market during 2021, supported by the Stamp Duty holidays, to sell their properties.”
The report also highlights that all of London’s boroughs have average rents that are now higher than their pre-pandemic levels – with fewer landlords willing to rent properties at LHA rates.
And it adds: “This creates a funding gap that will only increase the limitation recharge unless new ways of funding and delivering services are put in place.”
Meanwhile, Lewisham Council has also decided to push ahead with its new landlord licensing scheme.
If approved by the Department for Levelling Up, Housing and Communities, it will cover an extra 20,000 households in the borough.
Lewisham says the scheme will improve the management and quality of privately rented accommodation in an area where one in four households are renting privately.
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NewYorkie
16:07 PM, 21st March 2023, About A year ago
Reply to the comment left by Tim Rogers at 21/03/2023 - 15:51
Have you seen how much their labour force charges for repairs and maintenance? Also, their 'managers' are often lazy and incompetent... when they're not working from home, that is!
Tim Rogers
16:09 PM, 21st March 2023, About A year ago
Reply to the comment left by NewYorkie at 21/03/2023 - 16:07
Once they own the properties that's their problem, if they can't run the business properly..........
Seething Landlord
16:11 PM, 21st March 2023, About A year ago
Reply to the comment left by Tim Rogers at 21/03/2023 - 15:51
One of the reasons for the original "right to buy" was that Local Authorities were unable to afford the cost of maintaining their housing stock.
NewYorkie
16:25 PM, 21st March 2023, About A year ago
Reply to the comment left by Seething Landlord at 21/03/2023 - 16:11
The big problem we have in the UK is the age of our housing stock, much of which was originally council housing. It may have been well built, but is now costly to maintain and bring up to the expected EPC standard.
Rod
17:33 PM, 21st March 2023, About A year ago
Councils like to blame the PRS for putting up rents, while forgetting that their tenancies specify annual CPI increase in rents (capped at 7% this year).
By comparison, the latest ONS index of rents in the PRS states:
"Private rental prices paid by tenants in the UK rose by 4.4% in the 12 months to January 2023, up from 4.2% in the 12 months to December 2022."
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/january2023
Complaints about city centre rent increases of over 15% ignore the fact that, unlike the social sector, PRS landlords have to respond to the market and discounted rents by up to 25% as tenants headed out to WFH in the countryside.
Taking a rent of £1,000
reduce by 25% = £750 rent for 2 years over pandemic
then raise 15% = £862.5
raise again by 15% = £992
Net increase NIL
Amazing what you can do with statistics.
I am normally in agreement with Judith's posts but can't this time.
As has been said
- being tax deductible simply means you're still paying 55% to 80% of the expense
- licencing was intended to deal with exceptional cases and offers poor value. Why are so many schemes renewed despite so few properties being inspected?
- Councils have a nasty habit of picking on those who are licenced, rather than pursuing those with poor quality hones who have failed to licence.
While the government keep telling us housing is a priority but only focusing on home owners and first time buyers, new rental supply will be minimal and rents will continue to rise.
The biggest winners from Lewisham's purchases will be HM Treasury, collecting VAT on professional fees, CGT on profits and SDLT (incl. 3% surcharge) on the deals.
JB
18:00 PM, 21st March 2023, About A year ago
Reply to the comment left by Rod at 21/03/2023 - 17:33
Do councils have to pay the 3% surcharge on SDLT?
Rod
18:09 PM, 21st March 2023, About A year ago
JB
While not definitive, it would seem that yes, councils would pay the 3% surcharge.
https://www.localgovernmentlawyer.co.uk/projects-and-regeneration/317-projects-features/47087-tax-on-development-purchases
Darren Peters
19:50 PM, 21st March 2023, About A year ago
"The council says that the most common reason given by people for becoming homeless was relatives or friends asking them to leave."
The simple answer then is to stop relatives and friends doing these no-fault evictions and require a Section 8.
Problem solved.
(Being sarcastic in case anyone didn't realise.)
Tim Rogers
11:10 AM, 22nd March 2023, About A year ago
Reply to the comment left by Seething Landlord at 21/03/2023 - 16:11
Fully accept that was one of the reasons given. Along with Maggie's drive for home ownership etc...
As I recall, the later independent analysis showed that were council maintenance run 'properly' and inspections performed on a professional schedule, then ongoing maintenance could and should be economic.
The prs, maintain and control properties as part of the process of making a living/profit. I can't help but feel that if local and /or national government actually had to do the work, that the PRS has to, there maybe a more enlightened approach adopted.
Tom C
18:02 PM, 22nd March 2023, About A year ago
Lewisham are flush with cash after record revenue from Low Traffic Neighbourhood fines and school street fines. I wonder if they will put this windfall into buying the four flats I have in Lewisham?