Today in politics: NRLA research, EPCs and cladding

16 Jul 2020 02:26 PM

Today we look at a new report on affordable housing, IPPR calls for minimum EPCs of B by 2021 and the latest on cladding removal in the PRS.

NRLA research quoted

The Affordable Housing Commission chaired by Lord Best has published a new report. The document highlights issues with the supply of affordable homes.

In respect of the private rented sector it says:

• “Without urgent action to increase the supply of affordable housing the gap between housing need and the supply of low-cost housing will widen over the coming years. More households will have no choice but to live in the private rented sector, which as the Commission’s work has shown, is ill suited to housing low income households.”
• “The [COVID-19] pandemic has exposed the structural weaknesses in the current housing system, especially the high cost of housing for many vulnerable households and concerns over housing insecurity and suitability. It has also placed the spotlight on poor housing quality – not least in new build private rented housing – and the importance of amenity space.”

In respect of PRS rent levels it says: “Private rents – which the ONS figures show to have reached record levels prior to Covid-1920 -are also expected to fall slightly in the short term, but most analysts expect a bounce back in 2021.”

In a section on rent protection in the PRS, it says: “Government actions to protect renters during the pandemic have been widely supported. But the blanket safeguards – notably evictions protection – may need to be reviewed. Introducing temporary non statutory pre-action protocols to encourage “fair and transparent discussions” between landlords and tenants over rental payments are likely to be hit and miss and ineffective with rogue landlords.

Rent holidays 

“Some landlords will allow ‘rent holidays’ and show forbearance, but others that rely on rents for all or part of their income may have no option but to evict if tenants can’t clear their arrears and the benefit system falls short. According to a recent survey by the National Residential Landlords Association 29% of landlords expect to face some level of financial hardship as a result of the pandemic.

“The government’s commitment to banning Section 21 evictions will help new tenants but this alone will not protect those who have been unable to pay their rent. Making Ground 8 of the Housing Act (1988) mandatory grounds for eviction discretionary in court proceedings where the arrears are Covid-19 related may be one way forward.

“Irrespective of the immediate situation, a landlord could increase rents dramatically, pricing out the occupier and undermining the enhanced security. To counter this, the Commission recommends the proposed Renters Reform legislation – linked to ending Section 21 – should introduce caps on unjustified rent rises by limiting annual increases to an index of income growth for a fixed period (e.g. of four years). This would be similar to the proposed ‘Fair rents’ cap in Scotland and the Rent Standard formula for social housing in England.

“Effective enforcement and compliance is key to the success of rent stabilisation. As such, the Commission recommends that charging more than the permitted rent increase would be an offence, with the landlord facing a fine and having to return the excess rent to the tenant. Enforcement will be needed where the law is broken with proposed rent regulation by the First-tier Tribunal (or new housing courts if these are established).”

The role of the PRS

In a section on the role of the PRS the commission says:

“The Commission notes there are serious and growing problems of affordability for tenants in the PRS, which is now the second-largest tenure after owner occupiers and accounts for a quarter of all households with children, compared with 8% in 2004.51 A third of private renters are living in poverty and the majority of those are spending over 40% of their income on housing costs.

“Younger households seeking to access home ownership continue to face competition from private landlords who – with large cash deposits – have been able to obtain buy-to-let (BTL) mortgages. Reductions in tax relief and related tax changes have led to some private landlords leaving the sector, but overall volumes of BTL lending could increase as many would-be buyers have no alternative but to rent for longer. Indeed, the government is being encouraged to consider rolling back recent reforms.

“The Commission believes reversing BTL tax changes would be a mistake. It recommends that the government reviews BTL lending with a view to giving the Bank of England’s Financial Policy Committee additional powers to limit the use of interest-only buy to let mortgages. This would create more of a level playing field between owner occupiers and BTL landlords.

“The Commission sees an important role for the PRS, particularly for young, mobile, households on incomes that can cover market rents. The Commission is also keen to see more new homes delivered by the new breed of ‘Build to Rent’ developers who bring professional management and extra finance into the rented sector. But it is unfair to expect small private landlords to take the place of social landlords and provide secure, affordable homes for those on lower incomes.”

Think tank calls for minimum ‘B’ rating for EPCs 

The Institute for Public Policy Research (IPPR) has published a policy paper on improving the country’s housing stock. 

Of note, it says: “Incentives should be matched with new regulation and enforcement actions to ensure compliance. 

For the private rented sector, Minimum Energy Efficiency Standards (MEES) should be gradually brought up to at least B by 2030, with an exception of C for hard-to-treat stock.

These MEES standards should also be applied across all private residential properties, including for owner-occupied properties, at the point of sale or when other renovations are carried out. The target standards could be increased over time. There will need to be exemptions for certain households and properties.”

Almost half private buildings are removing cladding

MHCLG has published the lasted Building Safety Programme monthly data release for England. 

The latest data shows that as of 30th June:

• Remediation works to remove and replace Aluminium Composite Material (ACM) cladding systems on high-rise residential and publicly owned buildings in England have been completed on 35% of buildings. 158 buildings have completed remediation – an increase of three since the end of May.
• A further 11% (51 buildings) have had their ACM cladding systems removed but are yet to complete remediation. Overall, 209 buildings have either completed remediation or have had their ACM cladding systems removed, 46% of all identified buildings.
• 94% (145) of social sector buildings have either completed or started remediation. 78 of the 155 (over 50%) social sector buildings have now completed remediation with 72% in total having removed the ACM cladding.
• 48% (99) of private sector buildings have either completed or started remediation. Of these, 42 have had their ACM cladding removed.
• 246 high-rise residential and publicly owned buildings still carry ACM cladding systems unlikely to meet Building Regulations in England. Of these, 104 buildings have started remediation.
• As of 30th June 2020, the Social Sector ACM Cladding Remediation Fund has approved £270 million of funding for the removal and replacement of unsafe ACM. The Private Sector ACM Cladding Remediation Fund has approved £37 million for the removal and replacement of unsafe ACM.