Housing Rent Policy In the UK - Essay Example

? “Housing Rent Policy In the UK”.  Document: TOWN AND COUNTRY RENT POLICY One in five households (4 million households) in the UK is part of the Social Housing Rent Policy. As of 2011, the progression of acts, bills and regulations shows the progression towards the Localism Bill in April 2011. There are 3 stages in legislation which lead up to today's Housing rent Policy: before 2002, 2002 and post 2008. The current regulatory organizations, the TSA and the HCA are important end results of the Restructuring framework of 2002. The UK has gone from uncontrolled rents and social housing to Westminster controlled to a combination of government, city council and association controlled. Each individual Rent Policy today has its guidelines from the legal Restructuring framework. It will be the basis of this essay. The Tenant Service authority(TSA) was created in 2008 as an independent body to work with social housing providers to give structure, legal verification and guidance in the day to day running of their properties including almos. (Housing and Regeneration Act 2008). The TSA replaced the regulatory functions of the Housing Corporation. The Homes and Communities Agency (HCA) took over the investment functions and delivery activities of Communities and Local Governments. These two authorities cover all types of tenants in the United Kingdom. The Town and Country housing Rent Policy was chosen arbitrarily(T&CHG 2010) The TSA requires that 3 criteria be met . (TSA, 2010) "All Rent Policies must explicitly state their objectives in order to comply with the Housing Corporation's Rent Restructuring framework of 2002 . The Rent Policy shows that the rents are accessible to all. the rent increases are in alignment with current legislation. The association is a viable entity, earning enough revenues to maintain the property standards". Town and Country have several types of housing: social housing, shared ownership, market rent and intermediate rented stock. The Housing Corporation Rent Restructuring framework of 2002 and modified in 2009 is applied to social housing in its policy though other types of housing are also dealt with in this policy. "A person must have the choice of what type of place he can afford to have. Price should not be a determinant facture in deciding where he lives but it should determine what size of property he chooses" (Wilson, 2010) Government decision making at the local level has become less appreciated in the last few years. Associations have lost the power manage their own estates because the accountability and local decision making have become the responsibility of the government Target Rent Schemes have put people in a situation where it is no longer economically beneficial to go out and get a job. Needs have changed. Population sources are different. Social demands are no longer what they were 10 years ago Establishing the rent target calculations of 2002 did not take into consideration any of the social or financial factures of the last 10 years. Financial viability is difficult to achieve when household rents rather than property rents are used to subsidize the upkeep of estates. Rent are no longer linked to free market value. If it determined by the physical value, size and manual employment of the tenant (Wilson 2002, 3) and there is high unemployment in the area, the estates can no longer be viable. In 2009, bedroom weighting factor was added trying to add more value to property values. Manual labour was change to general employment. There were still too many variations. The 10 year plan has been met in the majority of areas other than London. The Governmental controls over Social Housing does not give enough control to the local councils as it was before 2002. This has been slowly changing since 2009. Public and government subsidised landlords must be able to have a combined free market of rent pricing. There is a chronic need of affordable housing. Millions of properties in the private sector are priced too high to rent and to buy. There are a million empty homes across the UK (Policies). Many properties are over occupied. Many are forced to rent in the private sector where there are no controls as to the price and the conditions. People cannot move and are blocked in the same property. Many people remain on lists and cannot get into the system 2000: "Quality and Choice: a decent home for all". There was a great disparity between rents of the same types of properties, in neighbouring boroughs. (Wilson 2010) Tenants based their judgement either on price, or costs, or the neighbourhood. It was concluded the necessity of the changing the rent system to be fairer and more equitable. 2002: Rent Restructuring framework by the Housing Corporation Rent will be aligned and determined on value of the property; the size of the property; and the average of the income of the manual labourers of the area.(Wilson 2010) The amount of rent will be the same for similar properties for all local authorities and housing associations. The value will be well under market value. The 10 year plan will involve a complicated calculation so that all social housing estates reach target rents within the ten years. 2009: The Reform of Council Housing Finance added another factor trying to add value to properties, Bedroom Weighting Factor. Realising that the Restructuring Framework is not working, the TSA was established giving more hands on power to local authorities.(TSA 2008) The arms management length organisations help in the day to day running of the local estates. The Tenant Empowerment Programme allows tenants to take an active daily role in day to day problems. Rent Restructuring has been in effect since 2010.It is applied to all tenants who are not part of the list of exceptions. One year after signing a Rent Policy, rent is augmented the following 1rst of April. The economic and social environment of the first policy and the policy of 2009 was the difference between night and day. The motivation facture of the turn of the century was the incredible economic growth experienced in the UK. For the first time, those in Social Housing could looks quantity and quality rather than location. The government took close look at the disparity of rents of similar or identical properties of social housing and voted in regulations giving the power back to the government. This economic growth did not last and the 10 year plan was no longer adaptable to the social environment. Rent Restructuring is only applicable to those who are in the Social Housing system. Because the housing system is so overburdened in our economic times, many must rent in the private sector. They are subjugated to un-regulated prices. Home-owners are also contributing to this disparity because they price their homes too high so as not to sell or rent, creating a shortage of rentable homes. As it has been said one million homes are empty in the United Kingdom.  From April 2002 to April 2012 target rents, each tenant will have a rent increase the 1rst of April after being in his dwelling for one year until he has reached his targeted rent. Once the target rent is reached, it will be increased by the RPI + ,5% per annum. Social landlord had total control on how they used their subsidies and rents to make their organizations viable. There were large discrepancies between rents in Burroughs. Social housing was determined on rent prices and not on quality. Evaluation Objectives: The policy put its strength on the quality of rent rather than on monetary value of rent. Property values were considered intrinsic to the persons perception and not to the social values of the neighbourhood. The objective was to set up a ten year payment schedule where people of similar housing were paying within 5% of the same target rents. Page 2 of Town and Country Rent Policy gives the actual formula as in the 2002 framework: "Target rents are based on 30% of relative property values, 70% of local earnings and bedroom fitting factor" The variation of the RPI + ,5% +?2.00 each year until target rent is attained. The social landlord was no longer to have a say in establishing the level of rent but had a say in how he would implement the scheme. The conclusion was made that people would be assisted if they associated rent standards with the quality in life. It was assumed that they would be more motivated to work and or live in areas of low demand. Many who are paying higher rents receive Housing Benefits (HB) and thus do not have the incentive to go find work. Social Housing in areas of low demand because of social-economic problems still cannot motivate people to become tenants even with the restructuring.(HRS 2002) This intricate formula was a result of the rampant abuse in the 1990's of landlords across the UK of social housing. Landlords were free to establish their rent rates and allocate the funds to individual properties. There was no centralized system for the government to control socialized housing. There was no regulatory system in maintaining properties and rents. Rents were to remain constant, fairer, and less arbitrary.(HRS 2002) The tenant was to have more choice in properties and thus be more productive in society. This assumption has proven to be not adequate in today's environment. Studies have been done by different government organizations as referenced in this essay as to the implementation of this framework. In 2009, it was shown that the act need amending. The actual rent calculations has been successful and has reached in most part its goals (HRS 2002 3). In 2009, the TSA was created to allows those who wanted a more localized regulatory body could register their estate and thus be referenced for present and future tenants. People.  Quality of housing cannot be determined in monetary terms. Estates have to be managed at the local level by tenant and financed by local councils. Problems need to be handle among tenants. Though the initial restructuring framework took control of estates to the government level, amendments have created regulatory bodies giving people and estate associations the possibility of improving quality and better management of funds. People, who are in the system, remain in the system. Housing is only as secure as the people who can pay. In the current economic crisis, a more affordable scheme needs to be created which is not based on perceived value. The policy does promote fairness and equality among people on paper. We no longer live in a bureaucratic environment. There is no free market rent economy. Rents are raised according to general statistics and not individual cases; the government is deciding for the individual. there is little or no local control of the estate. The Social Housing Rent Policy has always respected exceptions in attaining target rents. Disabled people come under the exception rules. Difficulties: If we look at Town and Country, they have diversified their revenue streams to offset target rents as not being financially viable for running large estates. Other possibilities are accepting different types of tenant schemes where the tenants have options to buy. In changing the Housing Rent Policy of the UK, the government will welcome the new Localism Bill of 2011, giving power to communities and councils more in line with the needs of 2011. More people will be better housed. More housing will be freed up as people will have more mobility and those who are poorly housed will be changed. All rents will stay within the Councils to pay for all the costs. Rent Policy for each Council or Local Association has taken into account the criteria of the Rent Restructuring framework by the Housing Corporation established in 2002. Three different policies have been studies and compared. It is mostly macro-economic and has no effect on the improvement of security and quality of life of the estates. There was a Best Value act in improving Housing Services in 1999 but there is no documentation as to how it affected each estate. Some councils used it in the boroughs to improve general facilities such as fire and police protection. The government gave financial incentives to improve facilities. Today, the Social Housing Rent Policy is in disarray. The system is over burdened. Over a million homes are vacant; and estates are disserted. People either cannot find work or are not motivated because the economics of loosing housing benefits and having to pay higher rent is detrimental. One cannot move in fear of losing social housing. If one is not in the system, private rentals are overpriced and landlords often take advantage of the system. Those who have been in the system cannot be touched and suffer from the rise in inflation. Restructuring framework might have been a good idea for a thriving economy without a high level of un-employment and social problems in each council. It is in the government's immediate agenda to completely amend the Housing Rent Policy as of this year. References Department For Communities and Local Government 2011, A plain English guide to the Localism Bill, London, viewed January 2011 http://www.communities.gov.uk/documents/localgovernment/pdf/1818597.pdf Department for Communities and Local Government 2011, Local decisions: a fairer future for social housing Consultation, London, viewed January 2011 http://www.communities.gov.uk/statements/newsroom/localismbillsocialhousing Mayer, A Chairman 2010 Tenant Services Authority Decision Instrument, The Regulatory Framework, viewed January 2011 http://www.tenantservicesauthority.org/ Hanover Rent Policy 2010, view January 2011 http://www.hanover.org.uk/supporting-services/key-documents-folder/Rent%20Policy.pdf Office Use of the Prime Minister 2002, Modelling the Impact of Rent Restructuring: A Case of Study Analysis - 164, Housing Research Summary, Rotherham, viewed January 2011 http://www.communities.gov.uk/documents/housing/pdf/140765.pdf Town and Country Housing Group's Rent policy. 2010, viewed January 2011 http://www.tchg.org.uk/documents/website/TCHG%20Rent%20policy.pdf Wilson, W 2010, Renting for social housing tenancies, London House of Commons, viewed January 2011 http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snsp-01090.pdf http://www.greenparty.org.uk/policies.html Read More