Housing in Wales
Mike Hedges AM
Member of the National
Assembly Wales for
Swansea East
September 2015
Introduction
Housing is the great challenge facing all of Britain
including Wales. The Post war period in terms of housing can be broken down
into two periods firstly the period 1945 to 1980. During that period we saw a
huge growth in Council Housing, the building of a large number of new estates
especially in the larger urban areas. We also saw the growth of owner
occupation and the start of the building of large private estates again
predominantly in the larger urban areas.
Since 1980 there has been a large increase in empty
properties, currently 22000 in Wales, there has been change in Housing tenure,
increase in the number of single person households, Increase in pensioner
households, Increase in young people in Houses of multiple occupation
especially students
Council Housing has declined through the sale of large number
of houses and the failure to build new ones, there has also been a substantial
growth in Housing Association properties
The decline in the private rented sector of the 1960s and 70s
has been reversed with a huge increase in private landlords both the large
scale owners and those using an additional house as an alternative to a private
pension. As a consequence of benefit changes
demand has increased for smaller size accommodation
Since 1980 we have seen almost a complete end to the building
of Council houses, the growth of owner occupation which now appears to have stalled
and the growth of Housing Associations into major landlords and the return of
large scale privately rented housing.
During the whole of this period we have seen a reduction in
the average number of adults living in each property due mainly to the growth
of single person households and also the reduction in large families.
The sale of Council housing has had a serious effect on the
housing market. The simplistic view of the political right is that the number
of properties available has not reduced only the tenure has changed.
I believe it has reduced the supply of Council housing and
that it has increased demand for both housing association houses and for
privately rented properties.
Ending the right to buy and encouraging councils to build
houses and flats would be the single most effective way of increasing
affordable rented accommodation. Whilst the right to buy remains then the
legitimate fear that any new builds will be bought by their existing tenants or
for them by members of their family remains a deterrent to building.
The Right to Buy and Right
to Acquire allows eligible social housing tenants to buy their council or
housing association home at a discount of up to £16,000.Over the past 30 years,
the policy has resulted in a huge reduction in social housing stock. Between
1981 and 2014, 138,423 council homes were sold. A 45% reduction in the social
housing available compare to when the policy was first introduced
Am I the only one that finds it strange houses on what were
wholly council owned estates available for private rent at up to three times
the price charged by the local Council. Amongst other things this is bad for
public expenditure as the cost of housing increases and housing benefit costs
continue to grow.
The
Welsh Labour Government is increasing the supply of homes and has increased its
target for the number of affordable homes from 7,500 to 10,000 over the
lifetime of this Assembly and through its innovative Houses into Homes scheme
is tackling the wasted resource that long-term empty properties represent.
The Welsh Labour Government
is on course to meet this ambitious target of providing 10,000 additional
affordable homes by May 2016. Statistics released in October show that 2,416
affordable homes were delivered during 2013-14, which is an 18 per cent rise on
the previous year and brings the total number of additional affordable homes
provided so far during this Assembly term to 6,890.
The Welsh Government is
investing a further £20 million to improve the Welsh housing stock and bring
thousands of derelict and uninhabitable properties back into use. Funding of
£10 million is provided over two years to offer interest-free loans of up to £25,000
per property, which is then recycled by local authorities and provided to
homeowners across Wales to maximise the funding and improve the standard of
Welsh housing
The 2016 Conservative
Government budget plans to reduce the benefit bill by £12 billion.#
The main changes are
- Abolishing automatic entitlement to housing benefit for 18 to 21 year olds for new claims after April 2017
- Housing benefit claims will be backdated for a maximum of 4 weeks fro April 2016
- Benefit cap will be reduced to £20,000 from April 2017
- Working age benefits frozen
- Child tax credits will be limited to two children from 2017
- The rates for work related activity group within Employment and Support allowance will be brought in line with Jobseekers allowance for new claims from April 2017
The Tory-led UK Government
imposed benefits cuts will put young people and families’ homes and jobs in
jeopardy illustrating time after time that getting people back into work or
into housing or protecting vulnerable people and families is not on their
agenda.
Housing Act 2014
The housing Act was a
major piece of social legislation s. Following the Social Services bill passed
earlier this year, this can be seen as the coming of age of the National
Assembly for Wales as a Law making institution. I am sure of two things, that
the Act has not met the hopes and aspirations of everyone and that there will
be more housing bills.
I intend to highlight, what
I consider to be, the main benefits from this Act. It is impossible to
overestimate the importance of housing for people’s health and the life chances
of children, with poor quality housing linked to ill health and children
continually moving schools as their parent(s) move from one short term let to
another failing to fulfil their potential.
There has been both a
reduction in the number of council properties and a return to large numbers of
properties in the private rented sector in recent years.
Under the Housing act , all private landlords and letting agents are required
to register, undergo basic training on their legal rights and responsibilities,
pass a ‘fit and proper person’ test ,become accredited and they must follow a
Code of Practice. This means that for the first time, tenants can have
confidence that their landlords are expected to meet certain basic standards
and that there will be measures available to them if their landlords do not. I believe the registration
and licensing of landlords and letting agents is a positive move towards
improving the management of housing in the private rental sector. As the number
of people living in private rented accommodation increases, we need to tackle
the bad behavior by a minority of landlords and the poor condition of some
privately rented properties.
In terms of dealing with homelessness the act
has two major strengths. First, the legislation outlines the key role of local
authorities, in wherever possible preventing homelessness thus making Wales
first of the UK nations to turn this principle into a legal requirement. Too
often Councils have waited for someone to present as homeless rather than
taking action when it was threatened when in many cases, early action could
have prevented the resultant homelessness. The second major strength is that
the legislation will require local authorities to offer meaningful and early
assistance to all people who face homelessness. Whilst I am not happy with the
ability of a Local Authority to discharge the homeless duty by placing people
in privately rented accommodation, the reality is that with the current lack of
social housing and increasing demand for housing such a decision is inevitable.
The legislation is also intended to
further facilitate the development of co-operative housing by allowing fully
mutual housing co-operatives to grant assured tenancies thus protecting the
interest of lenders .In some European countries co-operatives make up 20 per
cent of all housing but they only provide about 0.1 per cent in Britain. With
such a shortage of housing in Wales I do not believe that we can let the potential
for providing accommodation via the co-operative model be almost unused.
There is also a proposal to place a new
statutory duty on local authorities to provide new gypsy and traveller sites
where a need has been identified. As I know from Swansea, if official sites are
not provided then unofficial sites will be created. The legislation aims to
improve the standard of accommodation, reduce illegal sites and unauthorized
encampments. This can only be good, not just for the gypsy traveller community
but for the community as a whole.
The act allows councils the discretion to
charge any council tax premium up to a maximum of 100% for long term empty
properties. It also allows local authorities to adopt a stepping approach to
council tax with incremental increases occurring over a period of time. The
number of empty properties in Wales is one of the great scandals of the 21st
century and as the Government has already offered the “carrot” of loans to
improve dwellings for sale or rent then the “stick” of higher council tax
charges will hopefully get many more of these potential homes back into use.
The act also allows for local authorities to
charge a council tax premium on second homes occupied periodically within their
area. Whilst in most of Wales there are very few second homes, it is a problem
in certain parts of Wales. This will not stop the purchase of second homes, but
it will increase the annual cost of keeping one and will, I believe dissuade
some potential purchasers. More importantly it will put downward pressure on
property prices in areas of large scale second home ownership and thus make
more properties in these areas affordable by local people.
A
CO-OPERATIVE FUTURE FOR HOUSING IN WALES?
With the average
age of first-time buyers being 37 and expected to rise to 40, it’s perfectly
clear that the current housing system needs to be changed. Hefty deposits, the
difficulty in securing affordable mortgages from lenders, and the overall lack
of good quality housing are among the main reasons that have attributed to the
continuous rise in the average age of first-time buyers.
For many people,
the dream of buying their first home has been put on the backburner, and the
only remaining options are to either move back in with their parents or to rent
a property for many years with the aim of saving up enough money for a deposit.
Despite this, the idea of home ownership still remains the ultimate goal for
the vast majority of people in the UK.
The UK has, after
all, been traditionally dominated by two types of housing tenure models, namely
that of owner occupation with or without a mortgage and that of rented
accommodation either privately or from a social landlord. In other parts of the
World however, there is a third form of housing tenure with housing
co-operatives.
Under a housing
co-operative tenure, members of that co-operative have the collective power to
manage the accommodation between them. This involves taking responsibility for
duties such as arranging repairs, maintaining the property, and making
decisions about the rent. As the decisions are made by the members, the
principles of both community ownership and democracy are placed at the heart of
the housing co-operative model.
There are strong
co-operative housing sectors in countries ranging from Sweden, Norway, Canada, Austria and Turkey, to
name but a few. In Sweden for example, two large co-operative organisations provide
over 750,000 homes which equates to around 18% of the total population of the
country living in co-operative housing. In Canada,
which began developing housing co-operatives in the early 1970’s, there are now
over 400,000 living in Co-operative homes.
To put there
figures into a domestic perspective,
there are more co-operative housing homes in Vancouver than in the whole of UK, with housing experts estimating
that less that 1% of people in the UK live in a housing co-operative.
The idea of
introducing and developing housing co-operatives in the UK is not new one. In
fact, the idea was previously considered by the former Conservative Government
of John Major back in 1992. The then Government asked the management
consultants, Price Waterhouse Coopers,
to investigate both whether or not housing co-operatives generated a greater level of personal and social
benefits in comparison to traditional housing tenure provisions, and also
whether housing co-operatives would create affordable, long-term solutions for
the housing market.
The investigation
lead to a report being published by the Government in 1995 entitled “Tenants in Control: an evaluation of tenant-led housing management
organisations",
which, to the astonishment of many, concluded that co-operative housing models
not only were cost-effective but also provided their members with a number of
significant benefits.
Subsequent
reports and investigations into housing co-operative models have since
reinforced the findings of the originally PwC
report, as well as identified other potential benefits for its members.
For instance, being part of housing co-operative
gives members the opportunity to use existing skills or even develop new
skills. They provide members with a stake and vested interest in where they
live and can help reduce any dependency tenants have on landlords or the state.
In terms of the social benefits, housing
co-operatives can help promote community cohesion and integration as well we
play a role in reducing vandalism and anti-social behaviour. In some cases,
other community services such as child care and social activities for members
arose from being part of housing co-operative.
Furthermore, housing co-operatives give tenants
control over the property rents, building services and contractors, and also
rent arrears. Any surpluses made by the housing co-operative can then be
reinvested into the property, depending on the will of the membership.
Despite these
considerable benefits, the question inevitably remains as to why we are not
seeing co-operative housing models implemented and developed in our
communities?
The simple answer
to this question is down to our arcane feudalist land and property laws which
still exist today. Under the current system, there is what can be described as
an “inherent conflict of interest” presumption between the rights of a tenant
and landlord, and as such, does not recognise or take into account housing
co-operative tenures, where property is own jointly by members of that
co-operative. The presumption of a “conflict of interest” would hence be absent
in a housing co-operative models, as the principles of democracy and
commonality of interest are placed at the very centre of the model.
In my opinion,
the current land and property laws with the in-built perception of tenure
feudalism are not only out-dated but present a major obstacle to the
establishment and development of the housing co-operative sector in this
country. Despite the current situation, there is light at the end of the
tunnel, especially here in Wales.
It’s also worth
acknowledging the outstanding work being done across the border by the Labour
Co-op MP, Jonathan Reynolds, in the
form of his Co-operative Housing (Tenure)
Bill, which was brought before Parliament in October 2011. This promising Bill
that was introduced under the Ten Minute Rule seeks to end the feudal nature of laws that govern land and
property ownership in England by creating a co-operative model as a new form of
tenure.
What’s clear is
that more work has to be done, especially in these difficult financial times,
to help people get a foothold on the property ladder at an early age. It’s my
belief that the time has come to reach beyond the “traditional” and
“conventional” housing tenure options by looking at other alternatives and
options to satisfy our housing needs.
Co-operative and
mutual housing models provide us with a viable, sustainable solution that has
the potential to radically change the way we view and think about housing
altogether.
With the National
Assembly for Wales’ new primary law making powers, changing the law to
establish and promote a legally separate co-operative housing tenure is now
feasible.
Three things will
need to be done in order for it to be successful
Firstly there
needs to a change in the law to make the creation of housing co-operatives
easier.
Secondly lenders
need to be convinced of the security of their lending which may entail a Welsh
Government underwrite.
Thirdly it needs
to be publicised and people need to be enthused into creating and joining them.
None of these is
insurmountable with the political will to achieve it.
Empty Homes and registration of private
Landlords
According to a recent housing white paper there are 22000
long term empty homes in Wales within the private sector. The new houses to
homes programme is supported by investment to bring these houses back into use.
I believe that any house that has remained empty for over two
years which has not been actively marketed and put up for auction should each
year it is empty move up one band of council tax. This should differentiate between
the can’t sell and the won’t sell
We cannot allow these properties, many in areas of
substantial housing shortage, too remain empty.
This is the carrot- supported investment and the stick of
increased charges.
Increased council tax year on year when a house is just left
to decline and not only removing one potential home but in some areas blighting
a whole street
Planning Policy Wales requires local planning
authorities to optimise the delivery of housing to meet the requirements of all
sectors of society.
This is a matter of local delivery and the
forthcoming improvements to the planning application process and refinements to
the Local Development Plan process aim to improve this.
The Welsh Labour Government has published
guidance on how local authorities can use the planning process to facilitate
and bring forward development, whilst ensuring that they continue to deliver
the maximum possible amount of affordable housing. It is the shortage of land
designated under local development plans for building houses which is driving
up the cost of building land.
Housing Decisions
Housing is devolved to the Welsh assembly but under our
current devolution settlement like all statements on what is devolved it comes
with caveats
Firstly and crucially is funding, funding comes from the
Welsh block grant and any in year financial consequential of expenditure in
England on devolved areas. The Treasury acts as judge and jury over whether
there should be a consequential increase or decrease in the Welsh block grant. There
is no appeals mechanism, the decision and the money are sent and the Welsh
government have to work with what they are given.
An example from Outside of Housing sector, Wales had its
share of the cost of building cross rail. It is not due to have its share of the
cost of the High speed rail links. Which I consider a bizarre decision with no
right of appeal
Most of the detailed Housing Policy is decided in Wales but
there is pressure to follow key English only initiatives.For example the help
to buy scheme, where money is added to the demand side and with nothing done on
the supply side which inevitably will lead to increased prices. This started in
England and followed in Wales.
However for detailed housing Policy in Wales the Welsh Government
bills agreed by the National Assembly set housing law
There was the Housing Act l 2014 and there is the renting
homes bill 2015
Renting Homes bill.
There are two distinct rental markets. First is the high-cost,
high-quality, generally short-term rental properties, where there are usually
no problems. The second is the lower cost end of the sector, which provides
housing that, 40 years ago, would have been provided by the local council or by
halls of residence for students. The Communities Equality and Local Government committee
made 37 recommendations regarding the Housing bill, but I intend to concentrate
solely on four of them.
The first one is an issue that I raised in 2011, and that is electrical
safety. Recommendation 30 calls for provision and installation of carbon
monoxide and smoke alarms and for the periodic inspection of electrical wiring
to be mandatory in rental properties. Carbon monoxide, fire and poorly
maintained electrics can, and have, led to deaths. I believe we should support
hardwired smoke alarms. We also know that electrical sources are the biggest
causes of fires in Welsh homes. I believe we should have five-yearly electrical
safety checks in the Welsh private rented sector; it’s going to keep people
alive. This is not asking for something unusual or particularly expensive, or
onerous. Scotland has already done it.
I also have concerns regarding contracts for 16 and 17-year-olds.
Currently, when 16 and 17-year-olds have accommodation, it’s underwritten by a
responsible adult, sometimes a parent, but often social services. My concern is
that if 16 and 17-year-olds have their own tenancy and manage to organise their
own utilities, very hard-pressed social services departments and social workers
may decide that they may no longer need support; they’re looking after
themselves.
Further to contracts for 16 and 17-year-olds whilst I and I am sure many people will applaud the
intention behind this measure, and, certainly, the Minister has been very convincing
in her arguments, but I have serious concerns with the proposal. The
conclusions of the Communities equality and local government committee
described how there may well be legal issues in terms of insurance and access
to utilities for 16 and 17-year-olds, and I agree with those concerns. But
also, those people are likely, in many cases, to be very vulnerable. Those
witnesses giving evidence to the committee who supported this particular right
being extended to 16 and 17-year-olds did so with qualifications, and did so in
the context of support frameworks being in place to support and sustain those
tenancies. The Bill does not provide for any of those safeguards, and therefore
it may well lead to a situation whereby vulnerable people are made more
vulnerable.
It really does concern me that social services will say everything is
sorted, they’ve got a house and they’ve got their utilities, so why should we still
be involved? Well, for a lot of 16 and 17-year-olds, in that state, they’re
quite often very vulnerable and in need of adult support or they will be in
danger of drifting in to bad habits with the danger of eviction.
The third issue I want to discuss is retaliatory evictions. When the Communities,
equality and local Government committee first started to gather views on this,
I expected it to be wholly about tenants’ complaining about the need for
repairs and landlords then going for evictions.
I strongly support the provision of a rebuttal presumption that an
eviction is retaliatory in cases where it occurs after a contract holder has
registered a complaint with a landlord about the condition of the property? At the
Community, Equalities and Local Government Committee, we were also told that a
retaliatory eviction had taken place because the tenants gave evidence in court
against a landlord. The landlord took it upon himself then to take action
against the tenant. This has to be a cause for concern, not just in terms of
housing, but in terms of the way the law is enforced. If people feel they’re
about to lose their home if they give evidence against a landlord in court, I think the likelihood is that very many
people will not actually give evidence when they should.
Finally, what quality of homes should people expect? I have dealt with
constituents who have houses neither wind nor waterproof, which are very
expensive to heat due to poorly fitting single glazed windows, and are damp,
does this constitute fit for human habitation, because these properties help keep
the NHS busy? I have been told of a case in a in a South Wales constituency
where a tenant living in a private rented home has rent collected by an
associate of the landlord every Saturday morning, only in cash.
They have no record of who the landlord actually is no address, no
contact for that landlord. They’re living in a house that is full of damp, with
insect infestations, rotten wood, rotten window frames, broken doors and broken
windows. The family in that house are ill, what legislation must do is change
the lives of families like that wherever they happen to be in this country.
I fully support the ambition of the Bill, and if my constituents end up
in safe, warm and dry properties, then it will have succeeded in improving
their lives, and also, as a by-product, it will have reduced demand on the
health service.
Future
What are the further developments I wish to see in housing in
Wales:
Ten points for better Housing in Wales
First- I believe most importantly, is the suspension of the
right to buy and the building of new houses and flats. The provision of social
housing built and run by the Council is I believe the most efficient and cost
effective way of providing much needed housing.
The second development I would like to see is the substantial
growth of co-operative housing. We know it works across large parts of the
world including Europe and North America. We need legislation to make it easier
to built and manage co-operative housing and a commitment to its provision.
Third- whilst major progress has been made in relationship to
private rented properties there is a desperate need, especially in the major
conurbations, to introduce rent capping. The very high private sector rents are
one of the major causes of the escalation of the welfare bill. Instead of
cutting benefits, I believe we need to limit the rents being charged.
Fourth,-the current bill partially tackles this; privately
rented houses should be of a reasonable standard and safe to live in.
Fifth-Local Authorities should build houses for sale and use
the profits from the sale to support the Housing revenue account
Sixth-Secure tenancies should be the default renting
housing option
Seventh- predictable rent rises in line with inflation
unless there has been a substantial improvement I the building
Eighth- There needs
to be a ban on letting agent fees as fees are business costs, and they
ought to be paid by the business
Ninth – Ensure that privately rented properties are
routinely inspected by Environmental Health Officers
Tenth- Tenants should not be subject to unreasonable rules.
Finally substantial progress has been made in housing
legislation in Wales but there remains more to be done.
