Housing Matters

The Council's survey on residents' views of Lewisham's housing priorities is now closed. Did you take part? Did you understand the options?

Firstly we were asked to comment on the council's five priorities for improving housing in the borough. What did we think was more important? Improving existing homes? Improving estates? Increasing the supply of affordable housing? Better housing for older people? Or giving residents more control?

The council said they aren't allowed to borrow enough money to do all these things properly. With a lot more money more homes could be built, and provision for older people could be greatly increased. Did we agree they should 'explore options' to do more?

Option One was to continue as is with Lewisham Homes managing our homes.
Option Two would see the Council managing the homes it owns directly.

We were told that with the above options, the Council could borrow enough money to build 250 new homes, continue to bring existing homes up to Decent Homes standard, make limited improvements to security and environments and sheltered housing, and build a flagship extra care unit for older people.

In Option Three the Council sells off its homes ('stock transfer') to a 'resident-led' operation, ie Lewisham Homes becomes a 'Community Gateway' organisation.  
Option Four is to sell off all the property to an existing Housing Association.

With these options, we were told that 600 new homes could be built, existing homes would continue to be brought up to standard, widespread improvements could be made to security and estate environments, all sheltered housing schemes could be made fit-for-purpose and the flagship extra care unit would still be built.

The Housing Matters survey asked us how well we had understood the priorities and options presented. The information was presented in several different ways – as tables, or as tranches of disconnected Q&As – in a series of newsletters. The efforts of the Tenants Participation Advisory Service (TPAS) to explain the options and, in particular, how Housing Finance works, only complicated matters. It's an extremely complex subject, and there was far too much information to digest. Without being housing professionals or accountants, how were we supposed to know what questions to ask?

We don't know, for instance, what other councils are doing. Apparently, some, such as Islington, are taking their housing back in-house, as in Option Two. This might result in a slight decline in services, but may also be around £1.2m cheaper to run. On the other hand, Lewisham Homes might save money by bringing all its services in-house (some are still run by the Council). 

Selling off the stock

The main difference between the first two options and the last two was that more 'affordable homes' could be built and housing for the elderly could be improved more than a little. Obviously we all want this. But it can only happen if the council sells off all its housing.

Options Three & Four represent the end of Council Housing as we know it – in Lewisham at least – although one could say that particular death knell sounded when Thatcher introduced the Right To Buy. (Local authorities had to spend the proceeds of sales to reduce their debt instead of being able to spend it on building new homes, resulting in a massive reduction in council housing stock – over 2m homes in the first two decades of RTB). The Labour government reduced the discount available, but the Tories have just put it back up to 75%. What is the point of building new social housing when tenants still have the Right To Buy? 

Affordable housing has been built as a result of planning agreements between local councils and private developers (Section 106), but these agreements are rarely enforced and delivered, and Boris Johnson ditched Ken Livingstone's 50% affordable target, so that it is now almost 0%. Most new-build properties in London are currently being bought by overseas investors buying-to-let. The government's response to the housing crisis is typically ideological (see Affordable Rents below).

Although Housing Association tenants only have Assured Tenancies, existing Lewisham Homes tenants with Secure Tenancies were told that under Options Three & Four they would not lose their rights in a 'stock transfer' and that rent levels would be protected for five years and then 'stay in accordance with central government's rent formula'. However, a promise by the new landlord not to use certain powers is not the same as the statutory rights ‘secure’ tenants have in law. See this report from a campaign group in Swindon.

Option Four

Option Four may not be the best, despite these promises, and for other reasons too. As it comes nearer to the choice becoming a reality and a bidding war between potential housing associations begins for what will probably be an incredibly cheap sell-off, all sorts of other promises may be made to lure tenants, such as brand new kitchens etc. – which ultimately may not be worth it when you’re faced with eviction. Even if Option Three is preferred, there would need to be the strictest guarantees of tenants rights written into any transfer agreement.

New tenants with housing associations may be subject to the Government’s new 'Affordable Rents' policy, which is part of their “Affordable Homes Programme” (see the Homes & Communities Agency webpage). This allows councils and housing providers "the flexibility to convert a proportion of social rent properties to Affordable Rent at re-let; the additional financial capacity generated must be applied to support delivery of new supply." In other words, they can let out some of their social housing stock at 80% of market value to raise capital to build more housing. Any such social housing provider would also be able to implement a range of 'end of tenancy' options (tenancies could be as little as two years).

Lewisham Council recently voted against the introduction of 'Affordable Rents' and to keep rents at 30-40% of market value. But if our buildings were to be bought by a Housing Association, existing Lewisham Homes tenants with protected rents may find themselves living next door to someone who's paying twice as much rent as themselves.
 
One of the bidders for the Council's housing stock may be L&Q. According to Inside Housing, L&Q have recently reported the largest ever surplus (£95m) generated by a social landlord, and other social landlords such as Affinity Sutton and Orbit Group are also likely to achieve sharp increases in surplus. It has been suggested that service standards might be lower – and rents higher – than they need to be to generate these 'profits', and staff cuts may be on the cards to increase profits still more. The Chief Executive at L&Q earns £218,000. Inside Housing also asked why these organisations are 'stockpiling their cash' – one suggestion is they need a fat surplus to ride out the storm of benefit changes in April 2013 when rents will no longer be paid directly to the landlord.

Option Three
 
If Lewisham Homes residents choose Option Three, they would be able to have more of a say in how their homes were managed. But the current level of "involvement" from residents is around 1%. Most people just want to pay their rent and have their homes suitably maintained in return. Why give up time to get involved on a voluntary basis to work alongside professionals who are being paid?

The example given of a 'resident-led' housing organisation was Phoenix Community Housing, which owns and runs homes in Downham, Whitefoot and Bellingham. When Crossfields TRA met their CEO, Jim Ripley, he pointed out that his organisation works well with around 6,000 properties. At that size it is still possible for him to be familiar with all of the stock and many of the tenants. They operate like a Mutual (like the Co-op) – led by tenants with the interests of the tenants at heart. They currently have a 96% satisfaction rate, apparently.

However, the Housing Matters team has said that any stock transfer would be wholesale and not in parts – over 16,000 council properties in all. Jim suggested a stock transfer of this size may create too big an organisation to function properly as 'resident-led', and it might be better to split into two different organisations. Why not three?

The large number of homes Lewisham Homes is responsible for (along with Regenter B3) might explain why, despite the efforts of the 'Get Involved' team, it has failed to engage its residents more successfully. By contrast, L&Q has 68,000 properties – far too many to manage effectively with a 'tenants first' ethos, but then L&Q isn't 'resident-led'. With Lewisham Council's remit for up to 600 new homes to be built by a new landlord, Option Three needs considerably more thought.

Of course, the same is true of Option Two, with the Council managing in-house. They admit that Customer Services might be the first thing to suffer.

Leaseholders may also wish to know that housing associations charge VAT on their management fee. Just as there needs to be thorough examination of 'assured' tenancy agreements made in any stock transfer, there is an equal need for leaseholders to be protected. Brockley Leaseholders are currently in battle with Lewisham Council over the botched PFI contract that Lewisham negotiated with Regenter B3 to manage their homes, in which they were made liable to pay up to £10K every five years for unnecessary major works, in addition to annual service charges.


Meanwhile, TPAS has published the minutes of the Housing Matters Resident Steering Group (a group of 12 residents from various TRAs) on their dedicated webpage – although November 28th's minutes are not yet available at this time. The minutes of 14th November reflect the difficulty TPAS have had in getting anyone interested in 'Housing Matters' whatsoever, although it also shows that the steering group have learned all the jargon and given a great deal of time and thought to the issues. There is also supposed to be a third newsletter from TPAS to conclude the process. Then there will be TPAS's report which must go before Mayor and Cabinet.

Perhaps the most that might be gleaned from the survey is the answer respondents may have given to the question How satisfied are you with the services you receive from Lewisham Homes? That is the only thing we can truly say we have knowledge and experience of...except of course, how even more awful it could be before they took over in 2007. But maybe it's a case, yet again, of better the devil you know...