Housing Act: landlords and developers set to profit

Housing demo, London, 13.3.16, photo James Ivens (Click to enlarge)

Paul Kershaw, Chair, Unite LE/1111 housing workers branch

The new housing act will help property developers and landlords make profits but it will do nothing for people who need affordable secure homes.

Unless resisted, it will mean the end of what we know as social housing. Working class communities will be smashed up and the housing crisis will get worse. More people will be driven into expensive insecure private renting.

Recently, the Financial Times reported that buy-to-let assets hit a staggering Ł1.2 trillion and rental income reached a record level, much of it coming from the government through housing benefit. There is overwhelming popular support for rent control but no such move in this act.

There will be a 'tenant tax' on council tenant households. As soon as two people have a combined income above Ł31,000 (Ł40,000 in London) they will be hit by rent increases of 15p in the pound for every pound they earn, until they reach market or "near market" levels.

This 'pay-to-stay' policy is intended to push people into taking up 'right-to-buy' but would force many to move or drive them into poverty. Many tenants are already saying "can't pay, will stay" and councils should commit to not implementing this means test and not evicting tenants.

There is no legislative requirement for housing associations to introduce means testing; many will be planning to do so but campaigners and local councils should demand that they don't.

Secure tenancies will go, replaced by fixed-term agreements for new tenancies. Councils should commit to continue to give security to tenants. It is good that Islington council has given this commitment. All councils must take the same stand.

Council homes in 'higher value' areas will be sold off as they become empty. The money raised - or an equivalent levy - will subsidise the extension of the right-to-buy to housing association tenants. This will drastically reduce the supply of social housing for rent by an estimated 75,000 homes over the next five years.

Private developers will no longer be obliged to provide social rented housing on new sites, instead, they'll build publicly subsidised 'starter homes' that will cost up to Ł250,000 (Ł450,000 in London). Such prices are unaffordable to most workers.

Councils will be required to compile a "brownfield register" of all development sites sufficient for five homes or more. This would include open space on council estates, 100 of which have been described as "sink estates" by David Cameron.

Combined with a weakening of planning controls making it harder for communities to challenge developers, it is clear that council estates are being targeted for clearance as untrammelled money making opportunities for developers.

Housing associations, which now manage about 60% of social housing in England, will be further deregulated. They will be free to sell off homes or switch them from social rent to market rent without seeking consent. They are increasingly driven by undiluted commercial motives; some have already declared their intention to move away from social housing. Many are also moving to cut jobs and services.

In April, three big housing associations agreed to join the trend to mega-mergers of what were once small local social housing providers. L&Q, Hyde and East Thames will be worth Ł30 billion and will manage 135,000 homes. They boast they will be one of the biggest house builders in the UK but they aren't planning to build social rented homes. Homes for sale and market or near market rents are their priority. Last year, East Thames told tenants to either buy their homes or leave. For remaining social tenants their message is blunt. Elaine Bailey, who will be number two in the new organisation, says housing associations have been responsible for a "dependency culture" and, in future, they will be doing less for tenants.

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