Policy update

Policy developments in other parts of the UK

UK

Gove bids to fix fire safety crisis

UK levelling up secretary Michael Gove has pledged to give leaseholders legal protection from the costs of fire safety work.

The promise came as he unveiled a plan to force developers to pay an estimated £4 billion bill to remediate cladding on mid-rise buildings between 11m and 18m tall. Amendments are now promised to the Building Safety Bill to give ‘statutory protection for leaseholders’.

Gove also promised a proportionate approach to fire safety risks in buildings below 11m in a bid to tackle risk aversion among surveyors and lenders that has rendered tens of thousands of flats unmortgageable and unsaleable.

He is due to hold talks with developers and others to come to a voluntary agreement on paying the £4 billion bill.

A leaked letter from the chief secretary to the Treasury authorises him to use the ‘high-level threat of tax or legal solutions’ if developers do not agree but says the final decision is up to the Treasury. It also insists that the deal only covers cladding and not non-cladding issues that estimates suggest will cost as much again or more to fix.

The Treasury also says his department’s existing budget is the ‘backstop’ if the voluntary agreement fails and the tax and legal action do not raise enough money.

The impact of the new plan outside England remains unclear, with different parts of the Bill applying to England only, England and Wales and different UK nations. Gove referred to the tax as being UK-wide but previously this has caused disagreement between different governments over consequentials.

A spokesperson for the Welsh Government said: ‘We strongly believe that people living in affected buildings should not be left to pay to put right safety standards, nor breaches of building regulations.

‘We are adopting an holistic approach to building safety which goes beyond cladding to include compartmentation, fire alert, evacuation and suppression systems in buildings of 11 metres and above.

‘We welcome the UK Government announcements, some of which will support our work here. We will continue to engage with developers and press them to take responsibility and action. We commend those developers which have already set aside funds for remediation in Wales – they have set an example for others to follow.

‘The minister’s statement in December set out the significant progress being made on the building safety agenda, including a commitment of £375 million in the draft Budget over the next three years.’

ENGLAND

Spending review confirms existing commitments – and LHA freeze

The first multi-year spending review in England since 2015 contained few new commitments on housing but contained a sting in the tail for housing benefit.

Chancellor Rishi Sunak confirmed £5 billion for cladding removal and £11.5 billion for the Affordable Homes Programme plus £10 billion in loans to support housing supply but these had all been previously announced.

Also confirmed was a Residential Property Developer Tax that will be levied at 4 per cent on profits above £25 million and is expected to raise £200 million a year towards cladding removal.

However, the small print of the Budget Red Book also confirmed that Local Housing Allowance (LHA) rates will be frozen again for 2022/23 across the UK.

This is the second annual freeze in succession since LHA rates were restored to the 30^th percentile of local rents in 2020 and it means that shortfalls between benefits and rents will continue to rise.

SCOTLAND

Consultation launched on ‘new deal for tenants’

The Scottish Government is consulting on what it calls a new deal for tenants to deliver a fairer rented sector.

Proposals include:

increasing penalties for illegal evictions and stronger enforcement
restricting evictions during winter
giving tenants greater flexibility to personalise their homes and keep pets
developing a national system of rent controls for the private rented sector
introducing a new Housing Standard to apply to all homes
establishing a private rented sector regulator to uphold these standards and ensure the system is fair for both landlords and tenants
setting minimum standards for energy efficiency, making homes cheaper to heat while contributing to Scotland’s climate change targets

The proposals take forward several commitments made in the co-operation agreement with the Scottish Green Party and wlll feed into the final version of the Housing to 2040 strategy. Elements will be included in a Housing Bill in 2023.

NORTHERN IRELAND

New strategy aims to deliver 100,000 homes

Communities minister Deirdre Hargey set out plans to deliver over 100,000 homes in the next 15 years in a new draft Housing Supply Strategy.

At least a third of the homes are intended to be social housing and she said the plans as a whole should deliver on a wide range of needs including those of an ageing population, people with disabilities and children and young people.

The minister went on: ‘Transforming housing supply will require a collective response from the Executive and real collaboration. It must major on engaging with those people who are in housing need. This approach is built on the principle that those who are most affected by poor housing are best placed to help design or redesign it.’

The consultation runs until February.

WELSH GOVERNMENT

Budget sets out commitments for housing

New social housing, decarbonisation and a second phase of the Building Safety Fund all feature in Welsh Government’s three-year Draft Budget published in December.

The plans announced by finance minister Rebecca Evans set out spending plans for 2022/23 and indicative spending plans for 2023/24 and 2024/25.

Key headline measures for housing and regeneration (quotes come from the Budget narrative) include:

£1bn capital for social housing up to 2024/25 to support Welsh Government’s commitment to 20,000 low carbon social homes for rent
£580m capital for decarbonisation of social housing up to 2024/25. ‘This includes funding of our flagship Optimised Retrofit Programme, designed to improve the energy efficiency of our existing social housing stock.’
£375m capital for building safety up to 2024/25 plus £6.5m revenue. ‘This funding will enable long term investment in remediation of blocks of flats through a second phase of the Welsh Building Safety Fund, alongside supporting delivery of the Building Safety Passport Scheme, establishment of the Joint Inspection Team and supporting work on long term reform and remediation.’
£100m up to 2024/25 for Warm Homes Nest + successor schemes
£60m for market housing to address housing needs and boost housebuilding plus £8.5m for Homebuy to support equity home ownership
£27.5m revenue support up to 2024/25 to boost investment in homelessness prevention and housing support across Wales. ‘This includes work to meet our objective to fundamentally reform homelessness services to focus on prevention and rapid rehousing.
£3.5m to lease private rented sector properties for local authorities to discharge their homelessness duties.
An additional £3m revenue and a total £100m capital up to 2024-25 ‘to support the sustainable growth of towns and cities and their transformation into places of living, working, learning and leisure’.
£1m revenue for Unnos, the national construction company to support councils and social landlords that is part of the Co-operation Agreement with Plaid Cymru.

Co-operation agreement spells out radical changes for housing

A right to adequate housing, rent control and radical action on second homes are on the agenda for Wales following a wide-ranging Co-operation Agreement signed by the Welsh Government and Plaid Cymru.

First minister Mark Drakeford and Plaid leader Adam Price said the policies in the agreement fulfilled the ‘promise of a new kind of politics’ and would enable ‘a stable Senedd, capable of delivering radical change’.

Joint priorities in 46 policy areas also include a National Care Service, a national construction company, a second phase of the Building Safety Fund, reform of homelessness law and council tax reform.

The parties will also commission independent advice on pathways to net zero by 2035 rather than 2050 and work towards the creation of Ynni Cymru, a publicly owned national energy company for Wales to expand community-owned renewable energy generation.

And they want widespread action on Welsh language education and standards, tackling poverty and inequality and diversity and equality.

The commitments most closely related to housing come under the headline of ‘radical action for testing times’, with the parties highlighting rising household bills, the housing crisis and care for older people. They include:

Future of Social Care – Set up an expert group to support our shared ambition to create a National Care Service, free at the point of need, continuing as a public service. We will agree an implementation plan by the end of 2023. We will continue to better integrate health and care and work towards parity of recognition and reward for health and care workers.
Second homes – Take immediate and radical action to address the proliferation of second homes and unaffordable housing, using the planning, property and taxation systems.
Actions being planned include a cap on the number of second and holiday homes; measures to bring more homes into common ownership; a statutory licensing scheme for holiday lets; greater powers for local authorities to charge council tax premiums and increasing taxes on second homes. We will explore local authority mortgages.
National construction company – Establish Unnos, a national construction company,
to support councils and social landlords to improve the supply of social and affordable housing.
Building safety – Significantly reform the current system of building safety, which has allowed
a culture of cutting corners to the detriment of public safety. We will introduce a second phase of the Welsh Building Safety Fund.
Property and Fair Rents – Publish a White Paper to include proposals for a right to adequate housing, the role a system of fair rents (rent control) could have in making the private rental market affordable for local people on local incomes and new approaches to making homes affordable.
Homelessness – End homelessness. If people are made homeless it should be brief, rare and unrepeated. We will reform housing law, enact the Renting Homes Act to give renters greater security and implement the Homeless Action Group recommendations.
Council tax reform – Reform one of the most regressive forms of taxation – which disproportionately impacts poorer areas of Wales – to make it fairer.

Minister reveals action on second homes

Climate change minister Julie James has revealed more details of a pilot scheme to tackle the impact of second home ownership on some Welsh communities.

Speaking in the Senedd, the minister confirmed the pilot will bring together a range of actions to address the impacts of large numbers of second homes and short-term holiday lets. Dwyfor had been chosen for a pilot to launch in January with support from Gwynedd Council.

The first phase of the pilot will build on the practical support Welsh Government is already providing to address affordability and availability of housing and will be tailored to suit the needs of people in the area. More details will be confirmed following the Budget, but the minister is keen to look at shared equity schemes, rental solutions and what can be done with empty homes.

Two dedicated posts will support delivery of the pilot in the areas to link the interventions, engage with communities and maximise the impact.

The minister also launched a consultation on proposed planning changes. This will seek views on the use of ‘class order’ in planning which would allow local planning authorities to require planning applications for additional second homes and short-term holiday lets in areas where they are causing significant difficulties for communities.

The consultation will shape the second phase of the pilot which could involve making changes to planning, taxation and tourism systems.

In addition, Jeremy Miles, the minister for education and Welsh language, has announced the launch of a consultation on additional measures tailored specifically for those communities in which the Welsh language is widely spoken.

This will form the basis of the Welsh Government’s Welsh Language Communities Housing Plan and will play an important part in maintaining Welsh-speaking communities as places that facilitate the use of the language.

Over the summer, Welsh Government launched a consultation on potential changes to local taxes to help local authorities to manage the impact of second homes and self-catered accommodation. This closed on November 17.

Work is also underway to explore establishing a statutory registration or licensing scheme for holiday accommodation operators in Wales.

Consultations

Open consultations of interest to WHQ readers include:
Amendments to permitted development rights – responses by 15 February
Planning legislation and policy for second homes and short-term holiday lets – responses by 22 February
Second homes: local variation to land transaction tax rates – responses by 28 March
Proposals for the next iteration of the Warm Homes Programme – responses by 1 April

For more details see gov.wales/consultations

WALES

Wales ‘can lead the way’ on right to housing

The Back the Bill campaign has published the first phase of research into the social and economic impacts of a right to adequate housing in Wales that highlights the potential benefits for the country.

Focusing on international comparisons – including examples from Finland, Canada and South Africa – the research, undertaken by Alma Economics, has found both good practice and valuable lessons across a range of approaches.

In Finland, for example, the right to housing is set in the Finnish constitution. Highlighted in the report as having made significant progress on fully realising the right, Finland’s adoption of a number of policies, including its Housing First approach, has helped reduce homelessness by 50 per cent – and is on course to eradicate it by 2027.

Canadian legislation, meanwhile, recognises the right to adequate housing via its National Housing Strategy Act. The legislation also created three accountability bodies to promote and protect the right, but stopped short of introducing judicial mechanisms.

In South Africa, the right to access adequate housing features as part of its constitution and allows people to legally challenge a breach of the right in court; however, a long-term lack of investment in housing supply has negated its progress.

Commissioned by the Back the Bill partners (Tai Pawb, Shelter Cymru and CIH Cymru), the research demonstrates that Wales can lead the way as an international exemplar in its approach to housing as a human right. The paper also reinforces the cost of inadequate and inequitable housing, with significant impacts on health, education and life chances as well as a disproportionate impact on those with protected characteristics.

Investment boost for Sero

Insurance company Legal and General and Welsh bank Hodge have invested £5.5 million in energy technology and services company Sero Technologies.

The equity agreement gives than a stake of just under 30 per cent in the Cardiff-based company that has developed digital tools and expertise to design and deliver cost effective low carbon solutions for both new build and existing homes.

Sero has initially focused on working with social housing providers facing major challenges around regulation and funding, as they look to meet net-zero targets. Legal & General and Hodge’s investment will support Sero in its next stage of growth, as well as its aims to support the delivery net zero financial products with institutional partners.

Through its alternative asset arm Legal & General Capital, the insurer is one of the UK’s largest housebuilders by volume, with a commitment to deliver net-zero operational emissions from 2030 across its residential portfolio, there are significant opportunities for Sero to work with its existing housing assets and businesses.

Hodge, which is 79 per cent owned by the Hodge Foundation, is a specialist in mortgages, commercial finance and savings. Sero is seen a natural fit for Hodge as it looks to ensure that it continues to play its role in making society better but supports and invests in businesses which are closely aligned to this goal.

Sero works with landlords, mortgage lenders, housebuilders and more, to plot a pathway to net zero for their homes, providing the option of ongoing optimisation to ensure a good outcome for customers. Later this spring it will be launching its Building Passport, a digital app that allows homeowners to gain a greater understanding of the carbon footprint of their home, how they can make it more energy efficient, and track the progress of the home on its pathway to net zero.

Two new directors with links to Legal & General and Hodge were appointed to Sero Technologies in December. The deal does not include housebuilder Sero Homes, which is a separate company.

New group chief executive at United Welsh

Richard Mann was confirmed as the new group chief executive of United Welsh from January 2022.

Formerly deputy chief executive and group director of operations, his appointment is seen as pivotal in United Welsh’s growth. The association currently provides over 6,300 homes across South Wales and plans to build 1,300 more in the next five years.

Richard takes over the post from Lynda Sagona, who announced her plans to retire after leading United Welsh as group chief executive for five years and working for the organisation since 2009.

PUBLICATIONS 10 TO LOOK OUT FOR

1) The right to adequate housing in Wales – the evidence base

Alma Economics for Tai Pawb, CIH Cymru and Shelter Cymru, December 2021

sheltercymru.org.uk/policy_and_research/the-right-to-adequate-housing-in-wales-the-evidence-base/

2) The Homelessness Monitor: Wales 2021

Crisis, November 2021

www.crisis.org.uk/ending-homelessness/homelessness-knowledge-hub/homelessness-monitor/wales/the-homelessness-monitor-wales-2021/

3) A snapshot of poverty in Winter 2021

Bevan Foundation, December 2021

www.bevanfoundation.org/resources/poverty-in-winter-2021/

4) Barely breaking even: the experience and impact of in-work homelessness across Britain

Crisis, December 2021