Something really dangerous was announced today. The Guardian (at http://www.theguardian.com/society/2015/dec/09/council-tenants-lose-lifetime-right-to-live-in-property) gives us: ‘Council tenants lose lifetime right to live in property‘, which in itself might not have been a bad thing, yet the text “new secure tenancies with local authorities forced to review contract at end of term” might be a lot more dangerous than people are realising at present. In this I am taking a rare position, which is in support of labour. Now, it might very well be that we are both doing it for different reasons. I agree with David Cameron who stated at the time: “There is a question mark about whether, in future, we should be asking when you are given a council home, is it for a fixed period? Because maybe in five or 10 years you will be doing a different job and be better paid and you won’t need that home, you will be able to go into the private sector”, which is fine. I will not oppose that, yet instead of making the council tenancies linked to an income with a grace period, setting them to 5 years for all will give huge problems (not just logistics) down the line. In equal measure (which was my issue) is that these temporary tenancies could open up the door to hungry developers to sneakily move in and grow their influence and take over block by block. There have been too many stories (many of them not confirmed) where property developers have had too much influence in areas, not just in the UK. With the greater London area in so much turmoil, adding the dangers of diminished tenancy, those dangers will grow and grow. The problem here is that by the time people act and stop certain acts from being done, too much danger has been imposed to the people who used to live there. So I have an issue with this approach. It is clear that changes are needed, even from the governmental standpoint to grow its own portfolio of affordable housing, but this is not one of those moments as I personally see it. To emphasize on this danger I am taking a look back at the past, the year that Windows 95 became a hot topic of discussion, some regard windows as what was on a PC, but when you look through an actual window, those people in Birmingham got a little more than they bargained for. The article (at http://www.independent.co.uk/voices/behind-the-birmingham-scandal-1609640.html) gives us the dangers that could become a reality again. The quote “This year, the Birmingham urban renewal budget was £38m – for both public and private housing. The problem of matching supply and demand is complicated by the latest variation in housing legislation. Anyone who applies for a grant – on a statutory form – must receive a response from the council within six months. The Government’s object was to take the initiative for urban regeneration out of the hands of councils and their professional planners. The result was a free-for- all in which the self-confident, the articulate (and invariably the prosperous) went to the head of the queue and monopolised the scarce resources” has a front seat here. So Birmingham ended up having two problems. An abundant amount of Ashton Villa fans being the first, the second one was that the brass and the articulate got to have a free go at the Birmingham Piggy Bank. The biggest fear is not the issues that have happened, but the schemes that cannot be stopped because they are still legally valid, so to say, the options that the government did not prepare for. Is that a valid fear? That is the question that matters and my answer is ‘Yes!’. You see, until 2009 we never knew that almost Draconian law would be required to keep bankers in their place, soon we will learn in equally drastic way that tenants are placed in immediate danger, yet with people and housing the problem becomes a lot more pressing and this new 5 year tenancy limit will soon become the danger because of something a member of parliament ‘overlooked’, which is why I side with Labour this one time.
In my view, that danger could have been thwarted by offering the following
- A 5 year extension if no equal alternative would be available.
- The clear side rule that the 5 year tenancy becomes active when the income has risen more than 30% in the last 3 years (which would still give that person access to rule 1).
- An option to become the home owner, which must go to the home owner first and must be public in the second (no under the table deals for developers).
Yet when we see the quote “The new legislation forces councils to offer all new tenants contracts of between two and five years. At the end of the fixed term, local authorities will have to carry out a review of the tenant’s circumstance, and decide whether to grant a new tenancy, move the tenant into another more appropriate social rented property, or terminate the tenancy” is that not what is on the table at present?
You see linked to all this is one part that gives a little credit to Labour, specifically to Shadow Housing minister John Healey. The Financial Times reported “The national auditor is considering whether to investigate the government’s programme of subsidies for home ownership, after Labour raised concerns that it is a waste of public money” (at http://www.ft.com/cms/s/0/05703522-9dc7-11e5-b45d-4812f209f861.html#axzz3tuDm7ySX). You see, there is my issue to some extent, in light of the tenancy ruling point’s one and two always made sense, there is no argument here. My issue is that ‘buy to own’ is noble in thought, but as I see it, it is a shadowy entrance point for developers to quietly sneak in and start acquiring the area. Yes it take a fair bit of money, but the returns once the plot is complete is too massive to ignore. In my view this was the option that opened doors we tend to ignore.
There are good guys in this field, we will not deny that, but for every 5 good guys there is one that is a lot shadier than we bargained for. What happens when the overly positive calculations get some of these people to consider a BTL (Buy To Let) option, only to see in year 6 (or a little earlier) that the yields are worse than imagined, when these are ‘sold’ through, who picks up the bonus parts and who got the misrepresented losses invoiced?
They might seem like a different thing, but they are not. This is why I mentioned the issues in the same way I mentioned the Birmingham 1995 event. I believe that unless the legislation is a lot stronger here, the dangers become that these social places become reaping fields for ‘entrepreneurial’ (read exploitative) commerce and the people who always relied on a safe place to sleep will end up having no place at all.
This is where the road between me and Labour differs. You see shadow housing minister John Healey wrote to Sir Amyas Morse, The National Audit Office auditor general “a short-term windfall for builders and buyers at a long-term cost to the taxpayer”, a part I do not completely agree with. I think that the underlying text is “a short-term windfall for builders and buyers at a long-term cost to the taxpayer, which will transfer to developers at a massive loss to both the Treasury and the tax system as a whole”, which is not the same. I agree if someone states that it is my speculation and that John Healey does not go into speculation. To that person I state ‘You are correct, yet in equal measure that legislation should have been intensely tested for optional shortcomings towards developers and exploiters, has that been done?‘ It is my firm believe that it is not. We might all agree that this is not what legislation is about, yet legislation is about setting safety moments and a clear denial of transfer of ownership or a limit to the options any developers has in councils. A side we saw exposed by Oliver Wainwright (at http://www.theguardian.com/cities/2014/sep/17/truth-property-developers-builders-exploit-planning-cities) in: ‘The truth about property developers: how they are exploiting planning authorities and ruining our cities‘, you see, personally I am not convinced that this has been addressed. It is even possible that certain councils are even more toothless than they were a year ago and that is a bad thing. When you look at the article, take another look at the image with the caption ‘A scale model of London on show at this year’s Mipim international real estate fair in Cannes‘, you think that they gave a second glance at the tens of thousands of pounds that this scale model costs? The returns on that invoice are so massive it is a mere drop on a hot plate. In that environment the Conservatives changed lifetime tenancy. I agree that something had to be done, but the timing is off on both logistics and legislation surrounding this, that is what makes the event a lot more dangerous than parliament bargained for, which is at the heart of my issue here. Some will see “the Royal Mail Group has proposed a fortress-like scheme of 700 flats, only 12% of which will be affordable” as an issue. I think that the quote “The mayoral planning process is based entirely on achieving the maximum number of housing units on any given site, aimed at selling to an international market. The London-wide target of building 42,000 new units per year is predicated on a lot of very high density developments that don’t even comply with the mayor’s own policies on density” shows that the entire issue is greed driven and is not likely to yield anything affordable, which the 5 year tenancy that is likely to change even further. It is very possible that these moves allow the affordable housing to be placed on an income scale, which I would partially favour, but at present as the math does not take realistic economic values in mind, that scale will be based on 10 year old values, which means that the cost of living could be off by 35%, making food not the issue it already is. So in that view affordable housing is there for those who never need to eat, making the tenant deceased in more ways than one.
Lawrence van Rijn - Law Lord to be 