The Scottish Government Consultation on Affordable Rented Housing

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1 Briefing paper The Scottish Government Consultation on Affordable Rented Housing Creating flexibility for landlords and better outcomes for communities A briefing paper from CIH Scotland February

2 The Chartered Institute of Housing The Chartered Institute of Housing is the professional body for people involved in housing and communities. We are a registered charity and not-for-profit organisation. We have a diverse and growing membership of over 22,000 people both in the public and private sectors. CIH Scotland has more than 2,500 members working in local authorities, housing associations, housing co-operatives, Scottish Government and Government agencies, voluntary organisations, the private sector, and educational institutions. The CIH aims to ensure members are equipped to do their job by working to improve practice and delivery. We also represent the interests of our members in the development of strategic and national housing policy Prepared by: The Policy and Practice Team Chartered Institute of Housing Scotland 125 Princes Street Edinburgh EH2 4AD For more information on the contents of this paper, please contact the Policy and Practice Team: t e. w. Your work is our business 2

3 A briefing paper on the Scottish Government Consultation on Affordable Rented Housing Introduction On 6 February 2012 the Scottish Government launched its consultation to look at how a greater level of flexibility can be provided to social landlords, with the consultation period due to close on 30 April. The consultation contains ten proposals, many of which are aimed at reducing the impact of anti-social behaviour and supporting better outcomes for communities. This briefing will summarise each of the proposals, look at some of the proposals the Scottish Government decided not to include, make some initial observations and suggest some new proposals for consideration. The comments made by CIH Scotland in this briefing represent only our very preliminary observations at an early stage of the consultation period. We will be consulting members over the coming weeks and will amend our final response accordingly. For the Scottish Government consultation and accompanying questions please see Proposal 1- Create more flexibility for social landlords to decide who should get priority for housing In 2011 the Scottish Government published research into the reasonable preference categories, which concluded that priority groups which have remained the same for the past 45 years were out dated and did not necessarily reflect current housing need. Landlords have been asking for more flexibility to decide who gets priority for their housing. The Scottish Government is therefore proposing: to remove the current reasonable preference groups and replace them with a requirement on all social landlords to give reasonable preference to people whose needs are not met by the private housing market, or to other applicants where this would release housing for such people Your work is our business 3

4 The Scottish Government would still retain the power to specify some priority groups that every landlord must use: this would include homeless or threatened with homelessness. Within these constraints landlords would then be given the responsibility to decide, in discussion with their communities, who should get priority for housing. Comments This seems a very well intended proposal, but might not actually be the radical change that the Scottish Government thinks it is. If the proposal were to replace one set of criteria under reasonable preference with another, then the impact on flexibility would be minor. The Scottish Government would need to be minimally prescriptive in this area (i.e. there may be no need to go beyond homelessness only). Landlords do currently exercise flexibility in their allocations policies, but this proposal could make it easier for landlords to exercise flexibility without the usual nervousness around what the regulator might say. Although not one of the current proposals, we consider that there would also be strong support for the Scottish Government to consider going further on flexibility in allocations by relaxing the age barrier, so that for example, it would not be unlawful for a landlord to take age into account in specific situations and when allocating specific property types. Proposal 2 create the flexibility for social landlords to consider an applicants income when deciding their priority for housing Currently social landlords cannot take income into account when considering priority for, or allocating, housing. The Scottish Government considers this to be a barrier for social landlords wanting to develop mid market rented housing, and the current ban is inconsistent with the European Commission s definition of social housing. The Scottish Government is therefore proposing: Your work is our business 4

5 removing the current ban on social landlords taking into account the income of an applicant and their family and allow social landlords to take into account the financial resources available to an applicant and their family to meet their housing costs. This proposal would not exclude people from applying for housing or joining a list for social housing based on their income, but would allow income to be one of the considerations when assessing an applicant s need for housing. It is intended that landlords decide on how they use this flexibility. It could be used to create mixed income communities or just simply restricted to allocations for mid market rented housing. Comments This does seem like a very sensible approach which is consistent with a proper housing options approach and also enhances a landlord s ability to promote or create mixed income communities where they feel this is needed. The proposal is not saying that social housing cannot be allocated to people on decent incomes; it leaves it up to landlords to decide what is appropriate locally and to mix income in certain areas. CIH would also suggest that savings and other assets should be included as income here. Landlords would need a good financial inclusion approach and try to assess actual disposable income to take account of legitimate outgoings/debts and not just income alone. In the proposal the Scottish Government refers to the income of the applicant and family. Is this supposed to mean household? The proposal needs to be clearer as we would imagine that it is not the intention to take into account the income of family members who live elsewhere. Proposal 3 Create flexibility for social landlords to consider whether an applicant owns property when deciding their priority for housing Currently the law does not allow social landlords to consider whether an applicant or their immediate family own property when considering their means to meet their Your work is our business 5

6 housing need. The Scottish Government has cited concern among the public about the fairness of allocating rented housing to people with access to alternative accommodation. It is therefore proposing to: remove the current ban on social landlords taking into account whether, or to what value, the applicant or any of their family owns or has owned property in the UK. Removing the ban would give social landlords flexibility to take account of whether an applicant owns a property that they can access, when deciding their priority for housing. There would still be safeguards in place in situations where it would be considered unreasonable for them to occupy a property, for example if they were fleeing abuse, the property is overcrowded or it may endanger the applicant s health. This is consistent with the definition under the homelessness legislation. Comments This is a very welcome proposal as the well-intentioned 2001 Act ban was not supposed to stop landlords taking into account people with genuine access to other property. It would need to make clear that this flexibility must not lead to penalising owners facing a genuine difficulty (e.g. fleeing abuse). The proposal talks only of property in the UK, whereas homeless legislation now refers to UK and elsewhere. This proposal should be consistent with homelessness law. Again there is reference to family in the proposal. We would assume that it is intended to refer to household, and that landlords would not be required to take into account property owned by a wider family member where this property could not realistically be accessed by the applicant. Proposal 4 Change the law to stop living rooms being considered as rooms available for sleeping in As the current law on overcrowding stands, a room is considered to be available as sleeping accommodation if it is normally used either as a bedroom or as a living Your work is our business 6

7 room. The Scottish Government considers this to be unacceptable and is inviting views on: Changing the legal definition of overcrowding to stop living rooms being counted as sleeping accommodation. The Scottish Government recognises that the impact of this change would be limited in the social sector as social landlords would not ordinarily let properties where the living room was going to be used as a bedroom. This is partly down to health and safety restrictions where gas appliances are in the living room. Although the proposals may have minimal impact in the social sector the change could be more significant in the private rented sector and the Scottish Government is concerned about how changing the law could affect future demand for housing. Comments This is a very well intended proposal, but CIH has some initial concerns around the potentially detrimental impact that this could have on the private rented sector. Given that the Scottish Government already knows that social landlords discount living rooms as bedrooms, perhaps it would be best to well alone if it were to cause difficulties in the private rented sector? Proposal 5 - Create a qualifying period before anyone can succeed to the tenancy Currently the position is that only a non married partner must meet a minimum 6 month qualifying period before being considered for succession to a social rented tenancy. The Scottish Government proposes to re-introduce a qualifying period for all others who would qualify to succeed, and are seeking views on: Whether we should introduce a length of time that any qualifying person must have lived at the property before they have a right to succeed Landlords have reported that they have experience of family members who abuse the current position by moving in with tenants just a few days before the tenant dies. Your work is our business 7

8 The introduction of a qualifying period for family members and carers, as well as for partners, would help to limit this. Comments This seems a sensible move. However, the argument for extending a qualifying period to married or civil partners, who have made a legal commitment to each other and have particular legal rights associated with their status, is less strong and one CIH Scotland would be unlikely to support. It is also worth remembering that the qualifying period prior to the Housing (Scotland) Act 2001 was 12 months. Whilst there doesn t appear to be a particular appetite in the sector to increase the existing period, the Scottish Government is interested in hearing the sector s views on time periods too. CIH believes there may also be scope here to introduce a qualifying period before creating a joint tenancy. Would it be reasonable to ask that a prospective joint tenant too has to have resided with the tenant for a minimum period? The Scottish Government has chosen not to consult on limiting succession rights where it would result in under occupation. They informally canvassed opinion on this in the summer of 2011 and have come to the conclusion that it may be reasonable for under occupation to occur where children or others stay on a regular basis, and that in any event, suitable alternative accommodation is not always available. Whilst this is a pragmatic response, CIH believes it would perhaps be appropriate to limit succession rights where this would result in under occupation by two or more bedrooms. This would allow for flexibility but also provide landlords with the choice of making alternative accommodation available instead, where that was an option, thereby reducing significant under occupation and making better use of stock. Some matters do not feature in the consultation at all that CIH thinks are worth exploring. Whilst succession is discussed in detail, no reference is made to the tenant s right to assign the tenancy. There is a 6 month residency period that applies for this to occur but landlords cannot unreasonably refuse a request. With the pressures on the social housing stock so high, is it reasonable for a tenant to Your work is our business 8

9 effectively take on the landlord role and determine who will live in their former tenancy after they move? Another area that would benefit from clarification and that many succession cases hinge on, is a definition of what constitutes a principal home. At present the court s view often derives from case law which does not focus on residence, but on whether the person has a tangible and substantial connection with the house in question. A clear definition would limit the possibility of apparently bizarre decisions which have seen succession pass to someone who has not lived in the property for many years and has a home elsewhere. Proposal 6 Create the flexibility for social landlords to consider previous antisocial behaviour when deciding an applicant s priority for housing There is nothing in law to say that social landlords can take the behaviour of applicants into account when allocating housing. Whilst recognising that landlords can currently suspend applicants from receiving offers of housing, this change is designed to make it clearer to both landlords and tenants that antisocial behaviour can be taken account of and can impact on the ability to obtain social rented housing. The Scottish Government is seeking views on: allowing social landlords to take into account whether an applicant or a member of their household has acted antisocially, when deciding on priority for housing Comments In many regards this doesn t appear to be a major change. Landlords can and do operate suspensions policies and these often include reference to antisocial behaviour. This proposal is a welcome signal that acting in an antisocial manner will have consequences. However, as yet it is unclear what deciding on priority actually means. Is it simply stating the fact that landlords can suspend applicants from an offer of a tenancy on the basis of antisocial behaviour? Or is it suggesting that landlords can demote an applicant s priority (points, band or however priority is determined?) so that they are unlikely to be offered a tenancy or may only be considered for a tenancy in a low Your work is our business 9

10 demand area? CIH does not consider the latter option as one which it would support, and so the intention of this proposal does need to be clarified. It is important to remember, as currently applies when suspending applicants, that the type and quality of evidence required to make a decision on suspending an applicant can be difficult to acquire. In addition, an applicant who is homeless and not intentionally homeless, would not be subject to this proposal. Proposal 7 - Create the flexibility to allow Short Scottish Secure Tenancy to be granted in more cases of antisocial behaviour The current legislation only allows for a Short Scottish Secure Tenancy (SSST) to be granted in very specific circumstances: Following an eviction for antisocial behaviour in the last 3 years An antisocial behaviour order (ASBO) is in place In both cases the landlord also has a duty to provide support. A SSST allows a landlord to provide a reduced security of tenure for a fixed period of time. The tenant does not have the right to buy, succession doesn t apply and the tenancy may be ended when certain criteria are met. This proposal is looking to increase the opportunities for landlords to either grant a SSST or convert an existing SST to a SSST and is asking: Do you think Short SSTs should be an option for social landlords in tackling antisocial behaviour? Do you think housing law should continue to focus only on antisocial behaviour that occurs in and around a tenant s property? The proposal will enable landlords to grant SSSTs on a much reduced level of evidence where antisocial behaviour has occurred. The Scottish Government would consult separately on what would be in the Regulations that directed the landlord on the type of behaviour and level of evidence required in granting a SSST. Your work is our business 10

11 Comments This proposal is well intentioned and not one CIH would oppose, but there could be enormous difficulties in framing the Regulations on what conduct may or not be taken into account, with the potential scenario of landlords facing many legal challenges. In addition, if the duty to provide support applied in more cases, this may add an extra demand on support services that is difficult to meet. Clarification is also required on what the position is for a landlord that provides or offers support, but where the tenant has not engaged with or refused the support. There is also a need to be aware of the possibility of malicious accusations that are without genuine foundation, both prior to the SSST beginning and during its course. This proposal may not be required for new tenants if the proposal for probationary tenancies for all new tenancies is carried through, although it will still have a place for those existing tenants that carry out antisocial behaviour. The Scottish Government has decided not to consult on whether the provision of a SSST could be made in other circumstances. Changes originally considered had been to allow landlords to provide a SSST where: They provided accommodation that partly alleviated overcrowding, until such time as something larger became available The accommodation had been adapted and the applicant did not require the adaptations. CIH agrees that a SSST would not be appropriate for households who require larger properties. Applicants need to make informed decisions when being offered property that does not wholly meet their needs, as part of a housing options approach, and be aware of the realistic possibility that an offer of a more suitable alternative may not happen quickly. It would not seem appropriate to give a Short SST, given the potentially indefinite nature of the period in question. Your work is our business 11

12 However, CIH would like to see the inclusion of the power for landlords to provide a SSST when letting an adapted property to a household that does not require it. There is a ground for possession available to landlords to bring a SST to an end where there is no longer a person with special needs occupying the house. However, it is possible that this ground could be challenged if it was used to bring a SST to an end when there had never been a person in the household with special needs. The ability to use a SSST may be a useful tool for landlords to use in these cases. There should also be consideration given to allowing a landlord to convert to a SSST where some other serious misconduct has happened and where the landlord wants to try to avoid eviction: greater flexibility is needed so that a Short SST can be given for any breach which would have justified eviction action, including rent arrears. Proposal 8 Simplifying the eviction process where another court has already considered antisocial behaviour by a tenant or their household This proposal refers to suggestions the UK Government is considering in order to make eviction more straight forward, and the Scottish Government is asking for views on whether further consideration should be made of some of these suggestions. They are asking: Do you think we should examine ways of making evictions simpler where another court has already considered serious antisocial or criminal behaviour committed in the house occupied by the tenant or the locality? Any changes would still need to have regard to Human Rights legislation. Comments At this stage, CIH is unsure what this might entail. A landlord can already apply for possession on grounds linked to antisocial behaviour and some criminal activities. It may be reasonable for conviction to lead to automatic eviction only in cases where the conduct led to serious distress/harm being caused to neighbours: in some cases, neighbours are not aware that there is criminal activity taking place. Your work is our business 12

13 CIH believes that in cases where criminal proceedings are ongoing, it may speed up the process if landlords could serve a notice on the tenant whilst the criminal case is progressing, but only act upon the notice if and when the case is proven. Related to this is a new proposal which CIH is recommending. That is to see evictions based on antisocial behaviour accompanied, where requested by the landlord, by an exclusion order. This would prevent the evicted household reappearing at a relative s house in the same area and provide respite to the neighbours who have suffered. One case we are aware of involved an eviction for drug dealing which took three years, during which neighbours had to be moved away, but resulted in the evicted household reappearing at a relative s home a few doors away. This option appears to be already available, and has been used successfully, in England. Apart from the positive impact this would have on the victims of antisocial behaviour, it is also more likely to encourage witnesses to come forward. There may be scope to limit the use of this power to specific evictions, for example to those relating to dealing in Class A drugs. Proposal 9 Creating an initial tenancy for all new affordable rented housing tenants In this proposal the Scottish Government would compel social landlords to provide all new tenants (except transferring tenants) with an initial or probationary tenancy. This would be a Short Scottish Secure Tenancy which automatically converted to a Scottish Secure Tenancy after 12 months if no action had been taken to repossess the property. The rationale behind the proposal is to encourage positive behaviour and a more sustainable let. The Scottish Government is asking: Do you think all new affordable rented housing tenants should be given an initial tenancy? In suggesting this proposal the Scottish Government envisages landlords and tenants having a better shared understanding of the rights and responsibilities at the beginning of the tenancy and enabling early intervention to deal with matters that could result in breach of tenancy. Your work is our business 13

14 Comments This proposal is arguably the most controversial of all of the proposals in the consultation and, as a consequence, the sector needs time to fully consider the implications. CIH s initial thought is to question why the proposal is a duty, as opposed to a power? Do all landlords, including landlords of specialist accommodation such as sheltered housing, want to be forced to provide a SSST to all new tenants? In England landlords have the power to provide an introductory or starter tenancy, but if they do choose to do so, it must apply to all new tenants. That said, it may seem confusing and overly complex, particularly where Common Housing Registers exist, if some landlords do and some landlords don t use probationary tenancies. There are a number of arguments that have been suggested by some against the use of probationary tenancies, such as that they stigmatise the sector. But CIH s initial view is that this argument holds little water when one considers that social housing tenants are, in the main, provided with high quality property and service at very reasonable cost, as compared to tenants in the private sector. Neither is the term probationary pejorative: it is standard practice for employees to have a probationary period before being provided with the full terms and conditions. There is also an argument that by only offering a probationary tenancy, all social housing tenants are automatically mistrusted. However, to counter that it could also be argued that it sends the message out that social housing is something to be valued. Another view is that a 12 month probationary period could be unsettling for tenants, but a counter to this is why should it be unsettling if the tenant is planning to keep to the terms of the tenancy agreement? Employees on probation don t find it to be unsettling. Indeed, for probationary tenancies there would be a stronger justification for levering in support where it is clearly needed, at an earlier stage. However, if probationary tenancies are to apply it is important that a landlord is able to take action within the 12 months, if seriously poor conduct warranted it. Your work is our business 14

15 In terms of homelessness, whilst the advent of probationary tenancies is unlikely to affect the discharge of duties, there may be a need to revisit the homelessness legislation and amend accordingly. CIH would be concerned if voluntarily giving up a probationary tenancy, where the tenant has made an informed decision that it is not the right option for them, would normally result in a subsequent decision of intentional homelessness. There are times and circumstances where this may be appropriate, for example if the tenant leaves immediately before action was due to be taken for some significant breach of tenancy. But in the main tenants should be encouraged to see probationary tenancies as an opportunity to test the water. On a practical level, some concern has been raised that probationary tenancies may lead to what would amount to two sign-up processes, one at the beginning for the SSST and one after 12 months for the conversion to the SST. However, it would not seem unreasonable for the sign up for both tenancies to happen at the beginning, with the SSST effectively tacitly relocating to a SST after 12 months. This appears to be what happens in reality in England. However, it may be good practice for landlords to make contact with tenants at the end of the 12 months anyway as a way of keeping up to date with their needs and circumstances. CIH will be carrying out some research into the English experience of using starter or introductory tenancies and will use this inform our full consultation response in due course. Proposal 10 Allow social landlords to use short SSTs to let intermediate rented housing This proposal seeks to create more flexibility for social landlords to develop and manage mid market rent housing (MMR). With most MMR (including that developed through the National Housing Trust), there is a requirement to sell the property after 5-10 years. Allocating such properties on a Scottish Secure Tenancy would therefore be unsuitable. Some landlords have already told the Scottish Government that they would welcome more flexibility to develop and manage properties for mid market rent. The Scottish Government is therefore seeking views on: Your work is our business 15

16 Whether to allow social landlords to let houses using Short SSTs for intermediate rented housing. This proposal is aimed primarily at local authorities, as many RSLs have set up subsidiaries to develop and manage MMR. Comments There are some initial concerns with this proposal and CIH would want to avoid anything that might lead to an English style blurring of the social rent/mid market rent boundaries. It will be important to ensure that if there are separate tenancy arrangements for mid market rent, the provision in question must very clearly be mid market rent and not simply existing social housing let at a higher rent on a SSST. Social landlords already have flexibility to charge higher rents for properties in certain more popular areas or for ones that have been developed to a higher standard. They can do this without reducing tenancy rights. To provide clarity, the Scottish Government would need to legally define MMR, as the consultation s current definition of MMR as being somewhere between social and private rents would not be adequate as a legal definition. One option would, therefore, be to limit the legal definition of MMR to provision where sale after a fixed period is required. Your work is our business 16

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