Local decisions: a fairer future for social housing

1. Local decisions: a fairer future for social housing Neil McDonald Director – Housing Standards, Homelessness & Support

2. Drivers of change • Localism • Fairness • Flexibility • Reduce dependency • Better use of resources • Protect the vulnerable

3. Case for reform • Waiting Lists • 1.8 million households on waiting lists • There are around 50,000 households living in temporary accommodation in England • Unemployment • Fewer than half of social tenants of working age are in work • Overcrowding • A quarter of a million social homes are overcrowded, while over 400,000 are under-occupied • Mobility • Fewer than 5% of social sector households move within the social sector each year compared to almost a quarter of private renters

4. Declining supply of lets

5. Tenure New local authority flexible tenancy: minimum two years. The existing tenants rights protected Flexible tenants get RTB & right to exchange Right to one succession for partners; landlords can give additional succession rights LAs to publish a strategic policy on tenancies Secretary of State to direct on the tenancy standard

6. Tenure – key issues Tenancy strategies and tenancy policies Basis for renewal or non-renewal of fixed term tenancies Minimum terms and local discretion

7. Affordable rent • Affordable Rent set at up to 80% of local market rents • Local Authorities will continue to have a role in nominations • Tenancies reviewed after a min 2 years • Affordable rent tenants will be eligible to apply for housing benefit. • Written Statement on 9 December • DCLG and HCA will be setting out further details on affordable rent early next year.

8. Social Housing Allocations • Local authorities to determine who should qualify for housing waiting lists. • Rules on eligibility set centrally. • Existing tenants not in housing need - out of the allocation rules. • Protection for the vulnerable provided by the statutory ‘reasonable preference’ criteria

9. Homelessness • New flexibility to end the main homelessness duty with a PRS offer • Applicant consent not required • Minimum 12 month fixed term tenancy • Must be suitable • Right of review /appeal • Duty recurs if unintentionally homeless within 2 years • LAs can still end duty with social housing

10. Empty Homes • The New Homes Bonus • Inclusion of empty homes to give LAs incentive to bring home back into use. • Removes one of the arguments against new housing – that local authorities should first fill empty homes before building new. • £100m capital to tackle empty homes • Providing renovation works and management support to bring over 3,000 empty homes back into use.

11. Reform of social housing regulation • The TSA will be abolished and its functions transferred to the HCA • Stronger mechanisms for tenants to hold landlords to account and drive up service delivery • Local mechanisms will be used to address routine problems • Regulation will in future be refocused on: • proactive economic regulation • reactive consumer regulation – setting clear standards and responding to serious failures against them

12. Council housing finance • HRA Subsidy replaced with a 'self-financing' system from 2012 • Need for annual subsidy ended by one-off reallocation of housing debt between councils • In future, councils fund own stock from own rents • All councils get more to spend on services than under current system • Policy document in early new year setting out detailed policy and financial parameters

13. Affordable rent – resources • Most challenging CSR settlement in living memory • Despite this, we will still invest over £6.5bn in housing over the CSR period, including over £2bn to make homes decent and £4.5bn to fund new affordable homes • That covers existing commitments under the NAHP and new approvals under affordable rent.

14. Social Rent Rents at c 50% of market rent Life time tenancies Grant at c£80k per unit Limited use of existing assets Affordable Rent Rents at up to 80% of market rent Fixed term tenancies Grant as part of wider subsidy Asset Management strategies involving conversion of voids and sales. The former and the new models

15. Affordable Rent • Affordable rent may be charged at up to 80% of local market rents • Independent valuation based on method recognised by RICS • Uprated at RPI+1/2% for the period of a tenancy • Available to providers who commit to reinvest extra revenues in new supply

16. Who is affordable rent for? • Associations will co-operate with local authorities in their strategic housing role to allocate affordable rent properties. • Affordable rent properties will be allocated in the same way that social rent properties are now • Framework already allows for a good deal of local discretion • Opportunity to support diverse range of people on waiting lists, • What responds best to local needs and suits local circumstances?

17. The complete affordable housing package • The settlement for affordable housing also includes: • Low Cost Home Ownership; • Places for Change; • Mortgage Rescue; and • Empty Homes;

18. Next steps • HCA will issue the Affordable Rent prospectus during January • Providers prepare proposals January to March • April 2011 – new programme starts

19. Conclusion • Change was inevitable • This model is about unlocking providers’ potential and local initiative • Email address: AffordableRent@communities.gsi.gov.uk