The Social Housing Time-Bomb

by Paul Shamplina

8:10 AM, 1st February 2014
About 6 years ago

The Social Housing Time-Bomb

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The Social Housing Time-Bomb

With social housing more reliant on the private sector than ever before, it must be time for the government to start building council houses as a priority. Council waiting lists for housing according to Shelter are approaching 2 million and waiting times to get re-housed are running at 9-20 years in some areas, it’s no wonder we are in crisis.

Currently we are struggling to build over 100,000 homes a year. A recent report by the Institute For Public Policy Research says it we continue to build at the current levels by 2025 England will have built 450,00 fewer homes than are needed to meet current demand. Paul Shamplin of Landlord Action

At present a staggering £23 Billion is being spent on housing benefit. Yes some landlords have benefited, and in a minority of cases have charged over-inflated rents. However with an ever changing system starting with direct payment to tenants (introduced in 2008, and which we actively campaigned against) to the introduction of rent-capping, and now the much maligned Universal Credit, the private rental sector is needed more than ever. This is a big concern to us at Landlord Action. A recent story featured on the BBC, that I was involved in, highlighted dramatically some of the key issues. A tenant in receipt of benefit deliberately withheld payment and refused to pass it on to the landlord. We have subsequently been instructed to evict this tenant and collect the arrears. This type of situation is becoming all too common and is bad for anyone.

One of the key issues I have identified in speaking to landlords on a daily basis,especially small landlords, is that more and more of them are now experiencing arrears and this is causing a lot of frustration. Many landlords are fed up of persistent payment problems and have subsequently decided they no longer wish to rent their properties to housing benefit claimants. This ultimately means less property for rent and also tarnishes the reputation of the majority of housing benefit tenants who manage their finances responsibly and may need to move to new properties as their circumstances change.

To me is a no-brainer. The government needs to start building social housing again as soon as possible to promote growth, jobs and equality.

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.



Comments

8:27 AM, 1st February 2014
About 6 years ago

Paul,

Thanks for this. However, I think the problem is far more complex than just building new social housing.

I think more landlords could easily be encouraged into the sector if two things happened:

1. A guarantee of housing benefit paid direct to the landlord.

2. An easier eviction process.

Currently, as you are well aware, both councils and CAB are telling tenants in rent arrears to remain in their properties until eviction.

This anti-landlord stance is putting off a lot of landlords renting to LHA imho.

With rising house prices, the smaller landlord might think it's time to exit the market, and this will put even more upward pressure on rents.

The PRS provides a great deal of choice to people looking to rent and this should be encouraged, not crippled.

Matthew Sands

10:12 AM, 1st February 2014
About 6 years ago

Reply to the comment left by "Vanessa Warwick" at "01/02/2014 - 08:27":

Hi there....I too am unsure about supporting more council housing, for many reasons, including the fact that many tenants would like the freedom and choice to be in the private rented sector.

Public sector housing completes with the PRS by providing accommodation at less than the market rent, possibly even at less than cost, with subsidised rents being available to tenants regardless of need. This is at a cost to tax payers, whereas the PRS makes a profit and pays taxes.

I feel that the PRS should be more of a focus of government policy and that greater competition and increased supply would keep rents at a reasonable level. In particular, landlords should be treat as businesses (after all they supply homes and have 4m customers).

Do not be swayed by the likes of Shelter (who I would most dearly love to feel more supportive of) saying that there are 2m people on housing waiting lists. Remember that anyone can put themselves on these lists and many thousands of people are on them without knowing it. Many councils put PRS tenants on housing waiting lists when they claim housing benefit, as though having a council house is the default desired destiny of any tenant. I'd also point out that public sector tenancies are handed out without checking whether the prospective tenant already has a tenancy elsewhere and without asking whether the applicant owns a property.

For the first time ever, with the removal of the spare room subsidy from public sector tenant's housing benefit claims, housing associations will now find it necessary to find ways of using their portfolios efficiently.

The business of paying rent monies to tenants not landlords is a difficult one. I can see that the government want benefit claimants to manage their own financial affairs as they will have to do when they obtain employment. On the other hand we must remember that many such people are in severe financial hardship and further are wholly inexperienced in personal financial management. It also opens the door to all sorts of antagonistic activity on the part of unscrupulous tenants, so some effective safeguards are needed to avoid evictions where ever possible.

My belief that what we need is greater competition, though further development of the PRS, would, I feel, ease many of the problems between some tenants and their landlords.

I would welcome further comments on my views.

andrew jones

10:41 AM, 1st February 2014
About 6 years ago

The idea of paying rent to tenants and not direct to landlords is the major deterrent for letting to housing benefit tenants.When unemployment benefit is around £60 a week,coupled with reductions if the claimant is found not to trying hard enough to find work,it doesn't take a genius to see that some will subsidise their income with rent money

Mark Alexander

11:33 AM, 1st February 2014
About 6 years ago

My view is that we need more housing of all types, whether it is for owner occupation, PRS or social housing. Increase supply, reduce demand and give people choice. That's the only way that I can see to improve availability and quality of housing. The problem in the UK is lack of supply of housing, hence lack of choice. Nobody would choose to live in cramped, mouldy, unsafe conditions. They do so because there is no choice. They don't speak up because they are in fear of losing their homes and having nowhere else to go.

I agree that housing benefits should be paid directly to landlords and that that would encourage more landlords to consider letting to the benefits sector.

No one measure will totally solve the problem. UK housing is in a very big mess and a whole variety of measures, including tax breaks and further ease on planning permissions, are required to address the issue.
.

Adam Hosker

14:06 PM, 1st February 2014
About 6 years ago

I don't see the corilation that rent arrears requires the construction of social housing. It does show we are lacking adiqute insurance protection and landlords failure to negate risk with guarantors and lha safeguads.

Councils don't own houses these days, all owned by social housing providers. its their lack of investment and funding in which I don't follow. ... Are they unwilling or unable to meet their demand?

Neil Robb

18:34 PM, 8th February 2014
About 6 years ago

Reply to the comment left by "Vanessa Warwick" at "01/02/2014 - 08:27":

Hi Vanessa

I agree with you but instead of changing thing a little here and a little there. The government should look at the whole system and revise it by talking to the landlords as well as tenants.

They should make it an act of theft / fraud not to pay rent or refuse to move out a property when they should. Go to a hotel take a room don't pay criminal offence. What is the difference.

Those people advising tenants not to move should be consider in aiding and abetting in a criminal offence. See how many CAB or council workers work advise this practise then.

I have some tenants were I get direct payment in Northern Ireland the Assembly (local Government) refused to give payments to the tenants as they believed this would cause a bigger problem.

One of my concerns is if a tenant has committed housing benefit fraud they can chase the landlord for the money to repay this could be years of rent paid. I think this should not be allowed unless the landlord actively is involved.

So when the landlord got the rent benefit then paid the bank for mortgage. Rates insurance and was left with a small amount of profit he could find himself paying back tens of thousands of pounds.

If a tenant does not pay council tax it is a criminal offence and the can be prosecuted in court. Yet don't pay rent Government says it is a civil matter.

I love hearing about these huge rents private landlords get I believe that is mainly in London and Down south of England. What the landlords get there a week I get no where near that a month. Although I don't pay anywhere near the amount for my properties..


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