Our reliance on new build to solve the housing crisis fails us. Walk through most new housing estates and you will discover cheaply constructed flats that are unsuitable for families and children or houses that are largely unaffordable, whose price is inflated by a shortage of supply and not by the cost of house building – but credit availability. New build comes at a huge environmental and social cost, with implications for the well-being of our communities. The conventional response is to set targets for new build, ones that are never met; a case of setting the wrong measure to drive the wrong policy. It ends with the disgrace of algorithms determining how we build communities.
Seen through a societal lens promoting the common good, exclusive reliance on new build is wrong. We need to seek complementary solutions, ones consistent with our core Lib Dem values, policies whose outcome is not determined by privately owned companies or the State.
Our largest, physical, social asset is our existing housing stock. By encouraging homeowners to create social tenancies, providing separate areas for living for tenants at affordable, freely negotiated, social rents we can increase the supply of homes. Social rents include the provision of household services: energy, council tax and water charges which become costs shared between homeowner who pays them and tenant through the rent they pay. There are no shared living areas, with homeowners and tenants only sharing access ways. By sharing services there is no cost for converting metered services keeping internal conversion works to a minimum, works that are reversible. Energy use becomes a shared resource. Every single house in the UK has the potential to provide what I refer to as a “home within a home”.
In a pilot project, I observed that just half the saving from a “homes within homes” rent reduces the proportion of income taken up by rent for tenants from over a third to 23%. The income from the project’s modest, one bed living area exceeded the state pension; a valuable source of income particularly for asset ‘rich’, income poor homeowners.
Homes within Homes tenancies can be secure and long-term, integrating tenants into existing local communities and social infrastructure. HMRC registration to receive tax incentives encouraging affordable tenancies can be linked to Local Government certification to ensure accommodation meets pre-determined quality standards and that standard social tenancy agreement terms protect landlord and tenant.
With imagination we can link ‘Social Care Contracts’ into the registration process, enhancing homeowners income or giving a contribution to the cost of conversion, for landlords wishing to provide suitable, semi-independent living areas and / or providing defined, regulated, monitored support for tenants requiring social care assistance.
A Lib Dem government can offer the electorate meaningful reform, a better deal, elevating societal justice, societising reform for the collective good distinct from the coarse individualism expressed through Conservatism or the Groundhog Day politics of Statism. Our clear blue water! We must not underestimate the electoral opportunities this presents. To start a manifesto with a commitment to make homes more affordable, increase social care provision and using other practical, societising interventions to eliminate food poverty and provide sustainable energy supply for consumers sharing their purchasing power through state sponsored for-profit trust companies is, in my opinion, a good start!
Photo by PhotoMIX Company from Pexels
* Peter Ellis is a new member and the founder of a not-for-profit organisation, homeswithinhomes.org, proposing the use of existing housing stock to create affordable tenancies.
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11 Comments
On first reading I am not sure that this is clearly enough thought through or explored, or that there is actually anything here that does not exist already within the rental zoo of exclusive possession, HMO, lodger, small shared house (think Hinge and Brackett), or part flat conversion.
Or is the aim a “shared house” with a less formal agreement. But if it is less formal how do you make it stable in the long-term? How will you give the tenant security?
I’d be interested to hear a little more.
This is an excellent idea & fits very well with our Green comittments. We should be looking at changing the Planning Laws so that both Demolition & New Building are discouraged. This isnt just a matter of the existing Housing Stock either, after the changes accelerated by Covid we are likely to have a lot of unused Office & Retail space which could be converted to other uses.
We should also have a long-term aim of driving Property Prices down, our Inflated Prices dont just have damaging Social & Enviromental Effects, they contribute to Our Economic Problems by diverting Investment into Property.
Kudos Peter for putting this initative together. One suggestion on the website might be to include a little more detail on the breakdown of conversion costs in the pilot projects. Is this a project that can be carried forward in collaboration with existing libdem local councils?
@Matt Wardman, has the idea been explored and does it differ from existing forms of rental? Yes on both counts, Matt. The idea, applied in the pilot conversion is now over 5 years old, with a single tenant having occupied their separate area for living since then. Unlike existing tenancies and lodging arrangements, the HwH tenancy is a social market one, sharing housing service costs (for the tenant through the rent they pay) but NOT living space. In practice many households are doing similar work to accommodate elderly relatives.
It’s important:
1. to embrace a systemic alternative to new build, a new sector, that
2. has electoral significance because its context is standing up for the individual in society through collective but not-state interventions.
Is it based on formal agreements? Yes, to link into HMRC registration for tax incentives and Local Government certification, also to give security for landlord and tenant on terms that ensure the letting is a social, affordable rent.
@Paul Barker. You are right it could be extended to cover any unused space but existing houses are a readily identifiable source of supply in the first instance, with rents benefitting the general population not those owning commercial space.
@Joseph Burke. Lib Dem Local Councils can drive this idea. I believe it can be self-financing. I think that its commercial viability means councils could work through social finance mechanisms like the Impact Investment bond market; a new paradigm of societal enterprise funded by social fund markets for our common good.
Peter, isn’t there a problem with Council Tax? Any independent living space has to be registered as a dwelling in it’s own right surely? This is the “granny anex” problem.
@HughW – is council tax a problem? The position is unclear currently although the nature of the arrangements suggest it would not be a separately taxable area, more akin to defined, separate living pace for a lodging tenant. It’s what makes the tenancy unique, making the idea of having a lodger work by allocating a separate living area – it’s what make the rent an affordable one.
Further, it only remains a problem if councils and government do not have the will power to support social tenancies by including it as a cost homeowner and tenant can share through the rent. In other words its within the power of a government and we as Lib Dems to set out how these tenancies would operate. It’s all about political engagement and will.
Alternatively, council tax can be considered a red herring. Homeowner and tenant decide what is covered by the rent currently. If council tax is not included then l have no doubt there would be marginal adjustment to rent levels.
Peter
Thanks for replying. I very much appreciate that.
Can you point me to an example of a “social market tenancy” – ideally the sample text of a tenancy agreement. Thanks. My concern is that I do not know what this is in law, and I am not clear what you are creating.
I agree with you that the application or not of Council Tax to a separate living area where some facilities are shared is a black (add somewhat random) art, changing on a case-by-case and turns on whether a Council has decided to ask the VOA to apply it in a particular situation, or not. That would perhaps be a function of how much a particular Council needs to raise revenue at any point.
There is plenty of history of HMOs being wrecked by Councils suddenly having assessments that each single room is a Band A property, which means that an extra liability of several thousand per annum appears out of thin air if your rental agreement is inclusive of bills.
Equally the definition of HMO in Scotland could catch your idea, if for example the couple lodging with you break up and both have nowhere else to go:
“A house in multiple occupation is a property rented out by at least 3 (unrelated) people who share the bathroom or toilet and kitchen. It can also be known as a house “.
And abracadabra the full glory of HMO regulation kicks in. And if you don’t notice or tell them you are suddenly a criminal.
Which means that your scope is circumscribed by existing law, and I am slightly worried that your (to me) nebulous concept of “social market tenancy”, which afaik does not exist in law, will cause a problem or two.
If it is a branch-off of another sort of tenancy *with added assumptions*, then you should be calling it that – or a wheel will come off at some point.
Example: what happens in England if your 5-year-lodger mentioned above has a breakdown in the relationship with you. How do you make them leave?
What sort of tenancy is it?
If T is a lodger in your house, then it is “reasonable notice to leave”, which means a week or two.
But if T has exclusive possession of his bedroom (ie you have no right in law to go in there, or have accepted such in practice), and it is Ts main residence, then it is an Assured Shorthold Tenancy and you have to give your T notice of two months plus the rest of a rental period. And in law it is determined by the circumstances in your house, not by what your agreement says.
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If it is an AST in Scotland, I have no idea what the situation is as they threw all their laws up in the air a few years ago so you need to ask someone who knows the law there.
Do you have all this stuff covered?
If you are aiming to create a “Third Way” of tenancy, not a variation on the existing concepts – and to create all the new laws to facilitate it – then you need to be very very clear about that.
Lack of clarity in tenancy arrangement always ends up in tears for someone.
Peter Ellis. The Council Tax, as far as I know would be a problem. Once registered for tax the space would become chargeable if void as well. The solution is to change the rules to exempt the tennancy arrangements you suggest. Overall I feel your suggestion is a good idea. When I left home some four decades ago I was a traditional lodger on and off for four years. It was a miserable time. There was no way I could afford anything else.
@Matt W and @HughW.
Many thanks for your contributions.
HwH is, as Matt describes a ‘third way tenancy’. At this stage it is largely conceptual though the pilot project shows it is a practical idea to make rents affordable. I will respond to your observations but the most pressing need is for people with expertise or an interest in this issue to coalesce round the HwH idea if they think it has merit, at this stage perhaps in the form of a working group to begin to consider more fully the legal, commercial and governmental framework for it.. Perhaps you would consider working with me on it or indeed anyone else who has read our discussion and would like to get involved..
The tenancy agreement l have adopted is the assured shorthold tenancy. though in practice the scheme requires a new form, social market tenancy, which at this time, like the scheme itself does not exist. This will eventually require political engagement too.
The tenancy does not fall within HMO governance because there are no shared facilities although this may become an issue requiring further resolve. I mention HMRC registration and Local Authority certification, which will incentivise homeowning landlords and give Councils the opportunity to enforce pre-determined quality standards as an essential element of HwH, within a new policy framework for HwH outside existing HMO governance and tenancy forms.
As Hugh says “the solution is to change the rules…”. This is true. HwH should be seen as a new sector, requiring new forms of governance of a uniquely, identifiable and distinct tenancy type. It will require us in the early stages of HwH to look beyond existing law and its circumscription to avoid being driven by current orthodoxy towards existing reform leading to inevitable failure; to focus on the simplicity of form and outcome and do all we have to in the detail to make it happen.
Finally, we may not see it yet but l sincerely believe the challenge to use a new model for dealing with the need for affordable housing is an exemplar of how hard it is to challenge fixed systems (Plato talks of this) but in its relevance it speaks to radical change, a societal view that can transform how our economy works and may even be the political, ideological narrative that our party needs.