Policy update

UK

Another PM will be along soon

Chaos piled on chaos at Westminster as Liz Truss resigned as prime minister after just 44 days with Rishi Sunak taking over.

A tumultuous few weeks had already seen chancellor Kwasi Kwarteng sacked for delivering the tax cuts that Truss had promised in the previous race in a mini-Budget that spooked the financial markets and sent mortgage costs soaring.

He was replaced by Jeremy Hunt, who cancelled most of the tax cuts and laid the ground for ‘eye-watering’ public spending cuts in a medium term fiscal strategy to be published on October 31.

The Truss agenda had also featured supply side reforms including investment zones across the UK. These were set to feature tax concessions and deregulation for development including housebuilding.

Key budget decisions for the new government will include whether to renege on a commitment by the Boris Johnson government to uprate benefits in line with prices as well as whether to continue the freezes in local housing allowance and the benefit cap.

England

Stamp duty cut for home buyers

The main England-only feature of the mini Budget was a big cut in stamp duty in a move the Treasury said would boost economic growth.

The threshold for the tax doubled from £125,000 to £250,000 for home movers and increased from £300,000 to £425,000 for first-time buyers at a cost estimated at £7 billion over the next five years.

The Treasury said this would mean 29,000 extra house moves a year, generating more jobs in property-related sectors.

The stamp duty cut was one of only two tax cuts to survive the rewriting of the mini Budget by new chancellor Jeremy Hunt.

Rent cap planned for social housing

The Department for Levelling Up, Housing and Communities published a consultation on capping increases in rents for social housing in response to the cost of living increase.

Rents usually rise each April according to a formula based on the rate of Consumer Price Inflation the previous September plus 1 per cent. This implies an increase of 11.1 per cent for 2023.

However, the preferred model in the consultation is a 5 per cent rise, a figure that an accompanying impact assessment estimated would cost £7.4 billion in lost rental income over the next five years. Tenants not on housing benefit would save £2.8 billion from the move but the biggest beneficiary would be the government itself, with the Department for Work and Pensions saving £4.6 billion in housing benefit.

The National Housing Federation and Chartered Institute of Housing both called for a higher 7 per cent cap to protect investment in homes.

SCOTLAND

Rent freeze could last beyond April

A combined rent freeze and moratorium on evictions to help people through the cost crisis was the centrepiece of the 2022-23 Programme for Government (PfG) announced in September.

The programme outlined emergency legislation which will be introduced to put in place a rent freeze until at least 31 March 2023 and a moratorium on evictions, as well as a new tenants’ rights campaign. In addition a ‘one-stop-shop’ website will be introduced to provide people with information on the range of benefits and support available to help them through the current cost of living crisis.

The Cost of Living (Tenant Protection)(Scotland) Bill passed in early October and puts in place:

a temporary cap on rent increases
a temporary moratorium on evictions (a pause on enforcement of an eviction order or decree, similar to what was in place in response to the Covid-19 pandemic) except in a limited number of circumstances
an increase to the damages which can be awarded in cases where a landlord carries out an unlawful eviction.

The Scottish Government says it intends the measures will be in place until at least 31 March 2023, but the Bill includes a duty for ministers to review the measures.

The Bill also includes a power to extend the measures for two further six month periods, if it is necessary and proportionate to do so. Ministers would need the agreement of the Scottish Parliament in order to do this.

WELSH GOVERNMENT

Hutt appeals for more hosts for Ukrainian refugees

Social justice minister Jane Hutt has appealed to more people in Wales to offer accommodation to refugees from the war in Ukraine.

She thanked households across Wales who have have already come forward as hosts but said it was ‘vital’ that more joined them.

Some 5,650 people from Ukraine sponsored by Welsh Government and Welsh households had arrived in the UK by the end of September but more than 8,200 visas have been issued to people from Ukraine who have sponsors in Wales.

The minister said: ‘Thousands of Welsh households sponsored Ukrainians to arrive in Wales and they gave a commitment to host for at least six months. As we move into the autumn, we approach the end of that initial period. We hope hosts and Ukrainians will agree to extend many of those placements, but we need additional hosts to support those who cannot continue living where they are.’

‘In order to ensure a warm welcome to Wales, I’m issuing an invitation to households across Wales, to come forward an open their homes to welcome those seeking sanctuary. We’re immensely thankful to all those across Wales who are acting as hosts to Ukrainians, but it’s vital that more households to come forward.’

Welsh Government has funded Housing Justice Cymru to provide a host support service offering expert advice and information

The minister added: ‘We still need many more households to consider whether they could provide a home for those in need. This would normally be a commitment to hosting for 6 to 12 months. If anyone is considering this we encourage them to register their interest at gov.wales/offerhome, and to attend one of the ‘Introduction to Hosting’ sessions, facilitated by Housing Justice Cymru. There will be no obligation to continue with the process if you decide it is not for you.’

Land Transaction Tax cut

Home buyers in Wales will pay no tax on homes worth up to £225,000 under plans announced by finance minister Rebecca Evans.

The threshold for paying Land Transaction Tax was increased from £180,000 from 10 October. There will also be a small increase in the rate of Land Transaction Tax for homes that cost more than £345,000.

The move is intended to ensure that the threshold for paying the tax reflects the rise in prices of homes over the last two years.

People buying homes under £225,000 will not pay any Land Transaction Tax.

Anyone buying a home costing less than £345,000 will see a reduction in the tax they pay, up to a maximum of £1,575.

People buying homes worth more than £345,000 will see an increase – up to £550 – but these only represent around 15 per cent of property transactions in Wales.

All other elements of Land Transaction Tax will remain unchanged, meaning there are no tax reductions provided to those purchasing second homes in Wales, unlike with stamp duty land tax in England.

Rebecca Evans, minister for finance and local government, said: ‘This is a change tailored to the unique needs of the housing market in Wales and contributes to our wider vision of a fairer tax system. 61 per cent of homebuyers will not pay tax on their purchase. These changes will get support to people who need it and help with the impact of rising interest rates.’

‘The changes have been brought forward as a result of changes to stamp duty land tax (paid in England and Northern Ireland) announced by the UK Government in October’s mini-budget.

The threshold for paying stamp duty in England was doubled from £125,0000 to £250,000 for all buyers on Friday and increased from £300,000 to £425,000 for first-time buyers.

New planning rules to tackle short-term lets

Local authorities gained new powers to address second homes and short-term lets under statutory instruments that came into force on October 20.

They introduce three new use classes in the planning system that will give local planning authorities the ability, where they have evidence, to make local amendments to the planning system through an Article 4 Direction, allowing them to consider whether planning permission is required to change from one use class to another and to control the number of additional second homes and short-term lets in an area.

The changes to planning legislation were part of a package of measures to address second homes and short-term lets agreed between Welsh Government and Plaid Cymru in July 2021 and were consulted on from November 2021 to February 2022.

New funding for transitional accommodation

Climate change minister Julie James announced £65 million to help people move on from temporary accommodation into a place to call home.

The money will be used to fund the Transitional Accommodation Capital Programme (TACP) which supports a wide range of projects by local authorities and registered social landlords to create much-needed extra housing capacity across Wales.

The programme will bring more than 1,000 additional homes into use over the next 18 months. Almost half will be long-term or permanent homes with the others offering good-quality homes suitable for use by individuals and families for a number of years.

The projects include use of Modern Methods of Construction homes, refurbishments and reconfiguring of existing buildings.

The funding comes as the number of people in temporary accommodation in Wales continues to grow.

The minister said: ‘Where people are in hotel or B&B-based temporary accommodation, in particular, it can be difficult for them to move on with their lives. We need more high-quality interim accommodation options – places they can call their own – to allow people to get on with their lives, while we support them to find a permanent home.’

Developers sign pact on fire safety

Nine major housebuilders have now signed up to the Welsh Government’s Developers Pact, a pledge designed for companies to confirm their intention to address fire safety issues in buildings of 11 metres and over in height that they have developed over the last 30 years.

In a written statement, climate change minister Julie James confirmed that the companies who have signed up to the pact and, in some cases, remediation work has started.

The developers who have signed the pact are Persimmon, Taylor Wimpey, Lovell, McCarthy and Stone, Countryside, Vistry, Redrow, Crest Nicholson and Barratt.

The minister said: ‘I have always made it clear that I do not expect leaseholders to bear the cost of repairing fire safety issues that are not of their making and that I expect developers to step up to their responsibilities.’

The statement follows a roundtable meeting with developers in July and a follow-up meeting in July to confirm next steps, and their plans and timescales for remediation.

She said: ‘I wish to commend them for their engagement to date and look forward to a productive relationship in the future.

‘In some cases, developers have started their remediation works, and are making the repairs necessary and I look forward to this work continuing at pace.’

However, that still leaves three developers that have not yet replied to Welsh Government.

The minister said: ‘I remain disappointed that three developers are yet to provide me with assurances that they do not have any medium or high-rise developments in Wales or, if they do, are prepared to meet their responsibilities in respect of these developments.

‘The three developers yet to reply are: Laing O’Rourke, Westmark, and Kier (now Tilia).I am urging these developers to contact my officials immediately to confirm their position. I want to make clear I am exploring all options, including legislation, to ensure that those developers will face consequences for their unwillingness to accept their responsibilities.’

WALES

Work continues on replacement for regulator

There was still no replacement for the Regulatory Board for Wales as WHQ went to press.

The social housing regulator was scrapped in July by climate change minister Julie James with immediate effect to the surprise of most in the sector.

A Welsh Government spokesperson said: ‘We are committed to supporting the housing sector through unprecedented challenges caused by the pandemic and the cost of living crisis.

‘Work to look at how the regulatory function for Registered Social Landlords in Wales is supported in light of the changing regulatory landscape and the current challenges will be forthcoming.

‘Meanwhile, we continue to engage with the sector through the Regulatory Advisory Group which includes representatives from Shelter Cymru, TPAS Cymru, Tai Pawb, WLGA, CHC, UK Finance and CIH.’

TPAS Cymru said: ‘We look forward to hearing and working with Welsh Government on how scrutiny of the social housing regulatory environment will be carried out going forward to ensure the voice of tenants is heard.’

Emergency legislation helps rough sleepers

Crisis has welcomed new temporary legislation passed in the Senedd that will mean more help for people sleeping rough.

The change in the law will mean people who are sleeping on the streets in Wales will now legally be seen as one of the groups in priority need of rehousing support under Part 2 of the Housing (Wales) Act 2014. This change, the charity says, is crucial as the cost of living soars and winter approaches.

This new legal addition represents a continuation of the approach adopted by local authorities during the pandemic, working to ensure people who are rough sleeping receive the support they were often excluded from prior to the pandemic.

Crisis believes that much wider reform of the law is needed to end homelessness for good, but says this addition to the law is a vital step in protecting many people from being forced to sleep rough while the longer-term changes are being reviewed.

Crisis convenes the Welsh Government’s Expert Review Panel for homelessness legislation, which seeks to make recommendations on long-term and wider legal changes to end homelessness in Wales.

Matt Downie, Crisis chief executive, said: ‘I would like to congratulate and thank the Welsh Government for this vital change in the law. When it comes to homelessness, time is a luxury that we don’t have – and never has that been more true than during the current cost of living crisis. That makes this legislation all the more welcome, and it is a timely and decisive step on the road to ending homelessness in Wales.’

New chair for Pobl

Pobl has appointed Julia Cherrett as its chair designate, confirming that current chair, Wendy Bourton OBE, is to stand down after serving six years in post.

She is expected to be formally confirmed in the role at the group’s annual general meeting in September. Already sitting on the Pobl board, her career began in HR in financial services and the water industry before moving to customer service and commercial roles in utility businesses in the UK and Europe.

An independent board member with Natural Resources Wales, she has experience in leading major change programmes including service improvements and IT change and brings both operational and strategic experience to Pobl.

PUBLICATIONS 10 TO LOOK OUT FOR

1) Holiday lets and the private rental sector

Bevan Foundation, September 2022

www.bevanfoundation.org/resources/holiday-lets-and-the-prs/

2) Making a house a home: why policy must focus on the ownership and distribution of housing

Joseph Rowntree Foundation, August 2022

www.jrf.org.uk/report/making-house-home-why-policy-must-focus-ownership-and-distribution-housing

3) Resilience in the housing system: market institutions from the global financial crisis to Covid-19

UK Collaborative Centre for Housing Evidence, August 2022

housingevidence.ac.uk/publications/resilience-in-the-housing-system-market-institutions-from-the-global-financial-crisis-to-covid-19/

4) Hard to decarbonise social homes

National Housing Federation and Local Government Association, October 2022