Queen’s Speech: Focus on care for vulnerable and tenants’ fees

A low-key Queen’s Speech has set out plans for major consultation over social care and outlined a draft tenants’ fees bill.

 

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As the prime minister struggles to regain control of the political agenda, the Queen’s Speech was used to show that her ministers will be focusing on the most vulnerable in society.

The speech directly referenced the Grenfell Tower disaster with confirmation of a full public inquiry and the creation of a public advocate to ensure victims are represented.

The biggest step forward for the housing sector will be the consultation on the Social Care Green Paper. The plans to protect £100,000 of individual savings from care costs was a flashpoint in the general election campaign that arguably cost the prime minister the majority she wanted.

It presents a fresh opportunity for the National Housing Federation and others to lobby against the cut in supported housing.

The Department for Work and Pensions is known to be ‘alive’ to the issue, having already run a consultation of its own.

But it is the Department of Health which will influence the final decisions.

The consultation is the first big decision by former housing minister Gavin Barwell on becoming the prime minister’s chief of staff.

He set out his thinking during the general election in his exclusive interview with 24housing. He gave a warning that the social care crisis was due to complex problems that no single solution would solve.

He said: “It’s an important cross-government problem. It’s getting the system to work together. One issue is that the planning system isn’t creating enough suitable housing for older people. The White Paper is pretty clear on that.

“I’m really interested to hear people’s views as to whether people need a financial incentive that helps that decision, or it’s the lack of suitable alternatives or it’s that emotional connection. That’s an issue we need to understand.”

Responding, Age UK said it very much wanted a Social Care green paper to be developed and its proposals to succeed – but not on the basis of propositions advanced in the Tory manifesto.

In a statement Age UK said it particularly  opposed the inclusion of housing wealth as a means test with it being right to continue to incentivise home care over residential care – with the fear that some older people would be put off home care if they thought the value of their house would come into play.

Also outlined was the draft Tenants’ Fees Bill to ban charging tenants ‘letting fees’ to improve transparency, affordability and competition in the private rental market.

The main benefits of the Bill are pitched as:

  • Increased competition in the private rental sector, resulting in lower costs overall and a higher quality of service for renters.
  • Reduced upfront costs for tenants.
  • Delivering on the manifesto commitment to ban letting agent fees and make renting fairer and more affordable for millions of tenants.

Banning letting agent fees is seen as improving transparency for renters – currently, these fees are not explained clearly, meaning tenants are charged very different, and sometimes very high, fees for similar services.

The main elements of the Bill are:

  • Measures to ban landlords and agents from requiring tenants to pay letting fees as a condition of their tenancy.
  • Measures to enforce the ban with provision for tenants to be able to recover unlawfully charged fees. Territorial extent and application.
  • The ban would apply to England only. However, some minor amendments to the Consumer Rights Act 2015 may apply to England and Wales.

The English Housing Survey 2014-15 found that the average letting fees charged per tenancy is £223 and that median fees charged by agents increased by 60% between 2009-10 and 2014-15 – 14% increase in mean.

Shelter found that 1 in 7 tenants pay more than £500.

Citizens’ Advice Bureau found that 64% of tenants experienced problems paying letting agents’ fees and 42% had to borrow money.

An eight-week consultation on banning letting fees paid by tenants closed on June 2 – responses will be used to inform the draft Bill.

Julian Goddard, head of residential at London property consultancy Daniel Watney LLP said government should focus on tackling high rents and weak wage growth rather than banning lettings fees if it really wanted to help renters.

He said: “Tenant fees have been held up by the media and politicians as emblematic of a broken rental market run by greedy landlords and lettings agents.

“But a few rogue agents charging rip-off fees do not represent the vast majority in the sector who charge for making sure inventories are provided, tenants pay on time and properties are filled promptly.

“The real issue for many renters is that soaring demand coupled with a lack of supply has pushed rents up, while weak wage growth over the past few years has meant rent eats more and more into people’s pay packets.

“This is what the government should be looking to tackle.”

The speech included a pledge to create a more open and transparent housing market – reforms to the rules on house sales. the commitment to build 1.5m new homes also got a reference.

On leasehold reform, the speech committed government to a related consultation “in due course”.

DCLG estimates there were 4 million residential leasehold dwellings in England in the private sector in 2014/15 and that 1.2 million of these were leasehold houses.

Land Registry figures show leasehold made up 43% of all new-build registrations in England and Wales in 2015, compared to 22% in 1996.

In addition the percentage of residential sales that were leasehold grew in every English region between 2011 and 2015.

Direct Line for Business research in 2016 suggested that the average annual ground rent was £371 for new builds and £327 for older properties.

Other key plans include measures to toughen domestic violence legislation, changes to the mental health laws and a new focus on technical training and apprenticeships.

A return to the Prevent agenda on tackling extremism will impact on the community work done by housing associations.

Lib Dem peer Olly Grender had promoted changes in a private members’ bill.

He said: “We know from the tragedy of Grenfell Tower that tenants’ rights have been ignored for far too long.

“It’s time we made them a much greater priority, including by introducing a public register of rogue landlords.”

 

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