It’s a been a confused week for any keen observers of the housing market here in Britain. On one hand housing minister Grant Schapps and the Prime Minister are talking about ending lifelong tenure for council house tenants. They want to see tenants moving to the private sector and away from social housing when they’re better off and can afford to.

And then we hear senior Liberal Democrat, Simon Hughes, saying that his party opposes that.

If we’re being generous, we’d say that such bumps are inevitable in a coalition government. The more cynical commentator would say that the government is in disarray with the PM making up policy on the fly.

But perhaps the most astonishing revelation that comes out of this debate is the fact that social housing, indeed housing in general, did not form a part of the Coalition Agreement drawn up by the two partner parties to help them manage their relationship.

It seems to us at Upad that this government is looking to the private sector to take the strain of dealing with the housing problems the country faces. Needless to say, we don’t object. But if that’s the government’s policy, there needs to be a quid pro quo. One example: private landlords are struggling to get finance and we’d like to see improvements there.

If that's the policy - and that's where we question whether there's really any coherent policy behind the government's recent announcements. The Emergency Budget handed landlords an enormous disincentive to keep dealing with social tenants. We'd hoped that LHA payments would be speeded up and made directly to landlords; but these issues remain unaddressed, and instead, rates have been cut. Many landlords are now considering abandoning the social sector altogether.

Most of all, and it is true of business people the world over and in different sectors other than housing, what we need is stability and enough certainty to plan. This brings confidence. At the moment we’re concerned that ongoing uncertainty and a lack of a coherent housing policy is proving to be a bad thing for private landlords.

7 Responses to “Does the coalition government have a housing policy?”

  1. Sue @ Upad says:

    And what IS the point of Pilates? ;-)

  2. [...] This post was mentioned on Twitter by Pimlico Flats (Nick), said: New blog post: Does the coalition government have a housing policy? [...]

  3. It is very interesting what you say about there being no actual agreement between the partners in the coalition.
    I agree very much with you that the lack of available finance and the margins over base that the lenders want for buy to let mortgages are way too high. Our view is that this clearly reflects a lack of competition in that sector and that these high rates cannot be justified by the arrears expereince of the banks in buy to let lending.
    On Housing Benefit I think the gravy train that some landlords enjoyed has been watered down a bit - the last government's decision to set LHA rates at the median of local rents was wrong and correcting it to 30th percentile will do no harm (and actually help drive down rents overall)
    The cap on LHA rates is a different story and how local authorities manage this in London will be interesting. (So far I've only seen much hand wringing from councils and no research into what landlords in C London will actually do when the caps kick in. Some landlords will inevitably stop doing lets to those on Housing Benefits, but how many is a big question.)
    We have written extensively on this matter at our own blog.

  4. Mark Garner says:

    Over the last 10 years I feel the current Government have relied on the private sector to house the UK's growing population.This is clearly seen from the ONS statistics below:-
    Now looking forward the coalition government has made a good start to address the financial mess the UK is in but they do need a housing policy which will attract more private money to help house the growing UK population.
    The UK banks have very little capital so not keen to lend unless they can achieve a huge margin + charge high admin fees. The banks willingness to lend however will increase over the next 2-3 years as their balance sheets improve and the coalition government ideally plans to sell their banking shares back into the private market before the next general election.
    I have been a full time private landlord for 15 years and like many fellow landlords one of the greatest concerns we have is the time it takes to get repossession of your property when a tenant stops paying their rent. In some areas it now takes 3 months to get a court hearing as the courts say they are 'too busy' so in total you can be looking at 6 months to get your property back. I suggest the Government takes all rented housing issues like the deposit disputes out of the county courts and use housing tribunal's to deal with all issues including repossession . This will greatly speed up the process and reduce the cost to everyone involved.

    The other area which could be greatly improved to attract more private investment is if for taxation purposes landlords could be treated like a business. Landlords act like businesses and they should be treated like a business. I am very surprised that no one has successfully made this point to Government yet.

    If my two areas were successfully addressed this would result in more private money entering the PRS and providing the much needed housing the UK needs to house it's people. This would give tenants more choice and provide the flexible labour force the UK needs.

  5. Dan @ Upad says:

    @Mark Garner

    "Landlords act like businesses and they should be treated like a business. I am very surprised that no one has successfully made this point to Government yet."

    I'd be interested in a few details on what you mean. It's a critical point.

  6. Tony Atkins says:

    Dan@Upad: Landlords aren't treated as businesses because their houses are taxed as investments, not business operations. They gain none of the advantages enjoyed by companies in terms of the taxation of income, VAT, capital gains and dividends. Contact the National Landlords Association and they should give you a package of materials with their arguments on this issue.

    As regards council house tenure, it is hard to defend a situation where tens of thousands of people are running successful and highly profitable businesses out of their council houses, or are in good employment, and they are paying the super-low rents charged by local authorities. At the very least, council rents should reflect ability to pay, or should be set at proper market rates, with anyone on a low income claiming benefits to cover the rent, just as a private-sector tenant on housing benefit does.

    As regards tenure, it makes no sense for council housing to be in a parallel universe to the private sector: councils need to have the power to manage their own tenancies, just as private landlords do. Inheritable lifetime tenancies are an incomprehensible socialist-era restraint on councils' ability to manage their housing stock, to reflect local supply and demand, and to place constraints on the anti-social behaviour of their tenants, as private-sector landlrods are obliged to do.

  7. Mark Garner says:

    Dan@Upad: Regulated tenancies are also as Tony Atkins would state an 'incomprehensible socialist-era constraint' on improving standards in the PRS. After many years of successful campaigning by founder president Mrs Lillian Cline of the Small Landlords Association ( now the National Landlords Association), Assured Tenancies then Assured Shorthold Tenancies became the backbone for the PRS replacing the unfair Regulated Tenancies.

    Following on from my previous thoughts above I am surprised that the 3 main landlord associations who as they state ' promote and protect the interests of private landlords' have not gained enough support to make a winning case to government yet on the issue of unfair taxation of landlords. Lillian Cline's actions did more to improve the standards in the PRS than anything else and now we need to encourage more investment in the PRS by recognising the taxation of landlords must be looked at so it fairly treats them like a business for taxation purposes. This will be the next major development since Lillian Cline's actions to improve the standards in the PRS. Standards can only be improved by attracting money which will give tenants more choice.

    The problem landlord associations have is that their membership only represents about 5% (at most) of all UK landlords and the Government know that. To make a difference Landlord Associations may wish to work with other like minded groups/organisations to help landlords and improve the standards in the PRS.