We look at plans to extend the CMP deadline for letting agents yet again, debates on Universal Credit and Housing Benefit and research from the RLA and LGA.
CMP regulations published
The draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) (Amendment) Regulations 2020 and explanatory note have now been published.
Rules were introduced making membership of a Client Money Protection scheme compulsory in April 2019. This required agents to hold client money in a client money account at an FCA authorised bank or building society.
However, agents were given a ‘grace period’ of 12 months to set up a client account, following technical issues. As long as agents could prove they had made genuine efforts during this time they were protected.
The deadline for compliance has now been extended to 1st April 2021 – although no reason has been given as to why.
RLA research quoted in housing conditions paper
This House of Commons Library has published a briefing paper providing an overview of housing conditions in the private rented sector.
It explains the legislation regulating standards in the sector and identifies some of the key issues with the current legal framework.
- Details of the RLA’s FoI data on local authority enforcement against criminal landlords.
- The RLA response to the recent funding made available for councils from MHCLG to improve enforcement.
- The RLA’s research on the number of laws affecting the sector.
Call for end to five-week Universal Credit wait
Work and Pensions Minister, Will Quince MP, yesterday answered an Urgent Question on the reports in the BBC that the roll out of Universal Credit was being delayed.
In it, the Minister confirmed that the completion date is being extended to 2024. He went on to say: “Our planning for Universal Credit relies on assumptions about the number of people whose circumstances will change each day, thereby naturally migrating.
“Our forecasts to date have relied on 50,000 households experiencing a change in circumstances each month.
“Based on this, we had predicted that the process of natural migration to Universal Credit would be completed by December 2023.”
He continued: “Information collected on changes to people’s circumstances suggests that natural migration is happening less frequently than we expected.
“This suggests broad stability in people’s lives and can be attributed to a number of reasons, including the robustness of the labour market.
“We now estimate that 900,000 fewer households will naturally migrate between now and December 2023 than we had forecast.
“Given that we expect to manage about 100,000 households to Universal Credit each month, it necessarily follows that if we are to protect the interests of claimants and move them to Universal Credit safely it will take a further nine months to complete the implementation of Universal Credit.”
Concluding his statement, he told MPs that: “claimants will not lose money from their Universal Credit award owing to this forecasting change.”
Responding to accusations from the Shadow Work and Pensions Secretary, Margaret Greenwood MP (Labour) about people being scared to move to Universal Credit, the Minister told the House: “Perhaps if members of the Labour party desisted from their scaremongering and spent more time in our jobcentres speaking to work coaches, they would have a better understanding of universal credit and how well it is working.”
The new Chair of the Work and Pensions Select Committee, Stephen Timms MP (Labour, East Ham) called on the Government look urgently at “drastically cutting the five-week delay” for the payment of Universal Credit.
The Minister responded: “I take all issues around policy in my department, in the areas in which I have control, very seriously and I am happy to work with him. Are there improvements that we can make to Universal Credit? Yes, of course there are, and I look forward to working with him find some of those solutions.”
Calls to end the five-week wait were also made by eight other MPs.
The Minister argued: “It is important to state that nobody has to wait five weeks for an initial payment, which can be done on day one. It is repayable over 12 months but, as of next year, that will be extended to 16 months.”
The full transcript can be accessed here.
A similar debate on the issue in the Lords can be accessed here.
Minister wants LHA rate raised
Dr Caroline Lucas MP (Green, Brighton Pavilion) yesterday initiated her short Westminster Hall debate on the Local Housing Allowance for young people.
Opening the debate, she said: “Private renting is expensive, but because there is not enough social housing, young people are forced into the private rented sector as the only alternative to homelessness.
“The House of Commons Library points to evidence that in many areas, especially areas of high housing demand such as Brighton and Hove, there is a growing gap between the lowest private rents and the amount of Local Housing Allowance (LHA).
“Young people in Brighton and Hove have a particularly hard time because the amount of LHA is calculated by lumping our city in with other towns in the locality where the cost of housing is much lower. The amount of housing support is therefore artificially depressed, leaving young people in an even more desperate position.”
Addressing the recent decision to increase the LHA rate in line with inflation, she argued that “it locks in the freeze of the past four years”, going on to press the Government to set the LHA “at the 30th percentile of local rents, as it was until 2012.”
She called also for the young homeless people and care levers to be exempt from the shared accommodation rate.
Responding, the Work and Pensions Minister, Will Quince MP, called to begin with for efforts to tackle the root cause of the problem namely “massive supply and demand issues.”
As a result of this problem, he noted: “although there are parts of the country where the ambition was to have the local housing allowance rates set at the 30th percentile, there are many parts of the country where the local housing allowance is sub-5%. That represents an issue.
“The root cause of that—my officials will not like me for saying it—is that successive governments have failed to build enough houses, in particular affordable housing and homes for social rent. That is something we need to look at.”
Responding to an intervention from Stephanie Peacock MP (Labour, Barnsley East) who highlighted figures from Crisis showing that “cuts to housing benefit mean that in 94% of areas across the country, only one in five private-rented properties are affordable to young single people” the Minister said: “The solution is not just about local housing allowance.
“We can continue to pump money into housing benefit, which unfortunately in many parts of the country lines the pockets of private rented sector landlords.
“But if we are to tackle this in the long term, it is about affordable housing and a mixture of tenure between ownership of affordable housing, which is up to 80% of market rent, and homes for social rent, which is significantly lower.
“It is about addressing the supply issue as well as the demand issue, to ensure that we tackle the problem for the medium to long term.”
In highlighting the 1.7% increase in the LHA, the Minister went on to say: “Of course, the ambition is to go further, and I personally would like to see it go back up to the 30th percentile.”
The full transcript of the debate can be accessed here.
The debate comes as the Local Government Association (LGA) today publishes research suggesting that more than 100,000 people would be protected from financial hardship and homelessness across the country if LHA rates were lifted to cover the cost of renting.
The LGA is calling on the Government to use the Budget to lift LHA rates to help provide people with “more stable housing and tackle in-work poverty, homelessness and rough sleeping.”
The research for the LGA by Policy in Practice suggests that the LHA rate now available for nine out of 10 private renters across 279 local areas across the country is lower than their rent.
If LHA rates were restored to pre-2016 levels on average, the research for the LGA estimates that:
- An average council would need to house 300 fewer people in temporary accommodation across the country, or 101,000 nationally, and the average cost of using temporary accommodation for a council would reduce by between £1.4 million and £3 million.
- The average council would see 650 more households able to cover the cost of their rent with their LHA payments, or 220,000 nationally. This would help reduce financial hardship on them when trying to meet their housing costs.