Andrew Brookes, Partner, Anthony Gold and Nick Billingham, Partner, Devonshires
Introduction
The Smith Institute Report, Rethinking Social Housing¹, has created a debate in the housing press about the possibility of ending security of tenure for tenants of social housing.² This debate is continued in this article with an exchange of views from two members of the Journal’s editorial board.
Dear Andrew
I know it is several months since they were published, and I am wondering if you have had a chance to read the Smith Institute Report published in the summer. I would be keen to hear your views from the other side of the housing law divide, so to speak.
For my own part, as a housing lawyer acting in the main for Registered Social Landlords (RSLs), I was very interested in the themes developed in the essays which made up the Report, central to which was the key issue of mixed tenure and flexible tenure in place of mono-tenure estates and the so-called ‘‘social’’ tenancy.
Acting for RSLs around the country as we do, Devonshires have inevitably been closely involved with the development of mixed-tenure schemes and the introduction of flexible tenure. Indeed, we were heavily involved with the then ODPM in developing flexible tenure options and advising on Social Homebuy. And like most of the contributors to the Report I do believe (from my own experience as a housing lawyer) that mixed tenure provides one part of the answer to historical problems of social deprivation and ghettoisation of social housing tenants. On a daily basis my housing team deals with possession claims against RSL tenants for breach of tenancy, anti-social behaviour and rent arrears (although less so these days given the widespread use of DIY proceedings). The vast bulk of our work is concentrated on enforcement action against tenants—particularly on grounds of antisocial behaviour. On the other hand, instructions to take action for breach of tenancy and anti-social behaviour against shared owners and leaseholders are much less prevalent. The numbers involved are obviously much greater on the tenant-side but it is fair to say that from my experience of possession claims, having a stake in their home makes RSL residents less likely to breach the terms of their lease.
But what of the more radical proposals, particularly contained in the conclusions to the Smith Institute Report? I have to say in passing that the conclusions put forward by Tim Dwelly and Julie Cowans did not seem to me to spring directly from the various essays. However, the two proposals of ending the long-term social tenancy and rethinking homelessness to break the link between the link between the temporary need for a home and long-term rights to a social tenancy do raise some thought provoking (and provocative) issues and some of the arguments put forward in support do find echoes within my own experience.
In the early 1990s, I recall dealing with private sector leasing cases and one of the things that surprised me was the way in which private sector leasing (and to a lesser extent its replacement schemes HAMA³ and HALS4) created poverty traps where very high rents made it impossible for tenants to come off benefit and go into work. Matters were exacerbated by long delays in local authorities finding permanent offers of accommodation and intended stays of one to two years could last five or six years. By that time, I have little doubt that many tenants had become virtually unemployable and long-term dependent on benefits.
I suppose the question is twofold. First, what opportunities can be put tenants’ way to allow them to move into employment and then onto/up the property ladder (and certainly to prevent them being caught in a poverty trap where access to benefits provides the only answer to housing)? Secondly, should there be some element of compulsion on long-term social tenants to move on so as to release property for short-term housing assistance, i.e. dismantling the notion and reality of social tenancies for life?
In their conclusions to the Report, Dwelly and Cowans talk about scaling back the single tenure reforms proposed by the Law Commission in the draft Rented Homes Bill from two tenancy types to one, i.e. getting rid of the public/private sector distinction (interestingly the draft Bill seems to put RSLs back in the public sector as ‘‘community landlords’’ with local authorities) and have one form of single tenure akin to the current assured shorthold tenancy. Less security means more opportunities to persuade people to take up offers of flexible tenure, particularly if that means both greater security and a stake in their home.
I am not suggesting that people should be evicted for not going to work, but on the other hand as things stand at the moment I agree with the Report’s conclusions that there is still more that could be done to encourage tenants who can clearly afford to buy on the market to do so and move on. Some RSLs have taken a lead on this with innovative forms of flexible tenure for example tenants taking equity shares in their homes by increased rent payments and rent credits for being ‘‘good’’ tenants.
From my own experience of unlawful sub-letting cases, there is still a significant minority of social tenants who consider it their right to retain their social tenancy and sub-let after they have moved out and bought a home. Equally, we know that succession rights can encourage sons and daughters who have long-since moved out and bought their own home to move back with mum, dad or granddad in order to claim rights of succession. There is a significant ‘‘business’’ in dealing with social tenancies in this way which makes me think that something is not right.
Of course, for secure tenants we have ground 11 of Sch.2 to the Housing Act 1985 which enables a charitable RSL to seek possession against a tenant where the tenant’s continued occupation of the property would conflict with the objects of the charity. However, I have never seen the ground used and, when I raised it as a possibility a long time ago, I was met with the answer that its use would open up a huge can of worms given the numbers of RSL tenants who were no longer in housing need and for whom purchase on the private market was well within their means.
And what about under-occupation? Current grounds for possession against secure tenants allow action against under-occupying members of the family following succession where suitable alternative accommodation is offered by the landlord and ground 9 provides a suitable alternative accommodation ground for possession against assured tenants. However, both grounds are ‘‘reasonableness’’ grounds and, in my experience, they usually end in a contested trial (at some considerable expense to the landlord). If social landlords had more control over their properties, they might be able to take on a more proactive role of ensuring family houses were available to families and people were encouraged away from social tenancies and not to treat them as homes for life (with succession rights, well beyond that).
Quite rightly, a number of the contributors to the Smith Institute Report focus on welfare dependency and the inflexibility of the housing benefit system. Is the fact that 60 per cent plus of all RSL tenants are on long-term housing benefit indicative of RSLs fulfilling their role of housing the most disadvantaged or is it also evidence that those on housing benefit often get caught in the dependency trap? Having gone through the PSL experience in the 1990s, I agree with those contributors who said that the existing housing benefit system is far too inflexible and militates against tenants moving into ownership. A housing allowance would bring much more flexibility and could work much better in conjunction with equity share forms of tenure. As Professor Maclennan says in his essay replacing ‘‘housing benefit subsidy’’ with a ‘‘means tested housing allowance’’ is ‘‘. . . the great reform waiting to happen’’.5
Of course, if there are concerns that encouraging all these people to take on the burdens of home ownership (as well as the benefit) will result in failure and repossession, some of the authors rightly make the point that there is no reason why equity shared tenures and shared ownership should not allow tenants to staircase down as well as staircase up. Indeed, some RSL clients of ours have already implemented staircasing down as an option in times of hardship.
Welfare dependency is reflected in other ways. We both know that disrepair remains a significant source of litigation in the county court against social landlords. Needless to say, many disrepair cases involve genuine problems faced by tenants but so often we come across an assumption on the part of tenants that they have no responsibility for the upkeep of their homes. The tenant’s telephone request that his landlord send somebody around to change his light bulb is not apocryphal. One of our RSL clients has initiated a scheme whereby tenants can build up an equity share in their home by receiving rent credits for undertaking their own minor repairs and not calling out the Association’s contractors. Rather than a stake in a home leading to less dependency, this is an example of less dependency leading to a stake in the home.
Fewer disrepair claims, less anti-social behaviour and lower levels of possession proceedings — it does seem to me that this would be one possible result of more tenants being encouraged to have a stake in their home and to move up the property ladder. It may be not good news for you and me as housing lawyers, but it would be good news for the social housing sector.
As I say, I would be very interested to hear your own reaction to the Smith Institute Report. As someone acting for tenants you will have a better idea than I do what their expectations and aspirations really are.
Kind regards,
Nick Billingham
Partner, Devonshires
Dear Nick
The Smith Institute Report was most thought provoking, but I am afraid I found some of the recommendations unpalatable. Like you, I am not sure that some of the ideas really followed from the thoughtful chapters that made up much of the Report.
The two most controversial aspects are the proposals to remove or reduce security of tenure, and to remove the link between homelessness acceptances and access to social housing.
Before I comment on these two proposals, as a general point I was struck by the assumption that social housing was some sort of awful failing sink where no one could ever succeed and from which everyone wanted to escape. This is certainly not my experience of social housing tenants in 14 years working for Anthony Gold. Nor is it how registered social landlords and local authority housing departments view their tenants and their housing stock. Very recently the Joseph Rowntree Foundation published a study called ‘‘Twenty-five Years on Twenty Estates; Turning the Tide?’’6 This is the latest instalment of a long-term project. Having now tracked changes in 20 estates over 25 years, the Report concluded that there were signs of ‘‘significant and sustainable improvements’’, including the creation of virtuous circles and normalisation. Yes, of course problems remain and are deep seated. Yet the Joseph Rowntree Report concludes that with concentrated effort and investment by both landlords and tenants, estates can improve.
As far as the Smith Institute Report is concerned, the first controversial idea is the idea of reducing security of tenure for social housing tenants. I use the word ‘‘reducing’’ advisedly because, although the report does not use the term explicitly, that is what they mean.
In my view the authors have confused the idea of diversification of tenure with reduction of security of tenure. As far as diversification is concerned, at least in local authority estates, the ‘‘right to buy’’ has diversified tenure, as have a host of other initiatives.
The Report holds up the ‘‘assured shorthold tenancy’’ in the private rented sector as an unqualified success and the model to follow. Yet, studies by Shelter7 and others show that one third of homelessness is caused by the ending of assured short-hold tenancies. Is that type of tenure really appropriate for the most vulnerable in our society? Some of the worst problems of anti-social behaviour have been in assured short-holds in the private sector, sometimes involving those evicted from social housing.
The second point is whether it is really necessary to reduce security of tenure still further? Would it cement communities together? Landlords now have a formidable array of rights to enforce tenancy terms:introductory/starter tenancies, anti-social behaviour injunctions, a beefed up ground 148 (ground 2 for secure tenants9), demotions, ground 8.10 There is enough there already. Far from recommending a reduction in security of tenure, after exhaustive consultation, the Law Commission’s ‘‘Renting Homes: the Final Report’’11 came out in favour of increasing security of tenure by abolishing ground 8 in the social housing sector. I would endorse that view. Reducing security of tenure may only have the effect of de-stabilizing already fragile communities.
The second controversial idea is to ‘‘break the link’’ between the temporary need for a home and homelessness. The report appears to look upon homelessness as a single, discrete life event through which applicants undeservedly obtain a social tenancy for life. However, studies show that homelessness is usually just a symptom of wider social vulnerability. This approach has been championed by Shelter for decades. Even the Legal Services Commission, which is responsible for delivering legal aid, has endorsed this in its own research which found that legal problems were clustered and that homelessness was only one aspect of wider social problems including debt, family break up and unemployment.12
Even now, homeless applicants are only afforded a reasonable preference in the allocation of social housing.13 The problem is not the link between homeless applicants and social housing but the chronic shortage of social housing, particularly in London and the Southeast.
In my view, the biggest reason for so-called welfare dependency is the poverty trap. This still exists despite the introduction of tax credits and the minimum wage. Time and time again I still see tenants thrown into crisis when they start work. The housing benefit doesn’t process their new claim properly, the tax credit payments are late, and the arrears start to accrue.We should reform the housing benefit system and improve tax credits first. That is what would really make the difference to social housing tenants and to their landlords.
In passing, I note that in his chapter in the Smith Institute Report, ProfessorMaclennan suggests social tenants being given a ‘‘route to buy’’, sharing the annual gain in the value of their home with their landlord. Now that is an interesting proposal.
On a broader level, the lessons of the Joseph Rowntree survey is that improving the lives of people in social housing is hard work but not impossible. Much depends on factors completely outside the housing arena, including education and levels of employment in the general economy. However, investment both in the physical housing stock and estate regeneration has paid off. Tenant-bashing initiatives such as reducing security of tenure or the rights of the homeless are not the answer, indeed they may simply destabilise already fragile communities. The answer is to roll our sleeves up and persevere with long-term initiatives, which are the only way forward.
Kind Regards
Andrew Brookes
Partner, Anthony Gold
For further information email Andrew Brookes or call 020 7940 4000.
1. T. Dwelly and J. Cowans (eds).
2. See further the editorial by Andrew Arden in this issue, ‘‘New Cover; New Ideas’’, above.
3. Housing Association Management Agreements.
4. Housing Association Leasing Schemes.
5. ‘‘UK Housing Policy Reform—An International Perspective’’, p.21.
6. Rebecca Tunstall and Alice Coulter (November 2006).
7. ‘‘Safe and Secure? The Private Rented Sector and Security of Tenure’’ (Shelter publications, May 2005).
8. Housing Act 1988, Sch.2, ground 14.
9 Housing Act 1985, Sch.2, ground 2.
10 Housing Act 1988, Sch.2, ground 8.
11 Law Com. No.297 (2006).
12 See Professor Pascoe Pleasance, ‘‘Causes of Action: Civil Law and Social Justice’’ (Legal Services Research Centre, March 2006).
13 Section 167(2) of the Housing Act 1996, as amended by Homelessness Act 2002, s.16.
