The spending review - key challenges
Some Key Spending Review announcements:
• Affordable homes funding doubled to £2bn a year in 2018/19 and 2019/20
• 200,000 Starter Homes pledged, of which 60,000 supported through a £2.3bn fund
• Right to Buy pilot launched with five associations
• Planning changes including relaxation of planning regulations on green belt land for starter homes
• No increase in social housing rent cut or change to Universal Credit taper rate
• Housing benefit for new social tenants capped at Local Housing Allowance rate
• New domestic energy efficiency scheme to replace the Energy Company Obligation
• Pledge to release enough public land for 160,000 homes
• Relaxation of rules on shared ownership, including councils’ ability to set additional criteria
• Stamp duty increases 3% for buy-to-let and second home buyers
The NFTMO Executive is keen that members are aware of the key areas of potential difficulty and planning for them.
In particular, in the context of planned rent reductions for Social Housing. The reduction is 1% per year over the next 4 years. However, remember that Housing Associations and Local Authority landlords assume rent increases above inflation in their business plans so this could mean a bigger impact overall. Savings needed amounting to 10-16% over the 4 year period are being talked about and that might influence Landlords negotiating Management Allowances with TMOs.
Higher Rents for Higher Earners - 'pay to stay' details are not finalised on this but the suggestion is that households earning over a certain amount (£30,000 a year or £40,000 in London) would have to pay higher 'market' or near market rents.
These proposals are working their way through parliament in the Housing and Planning Bill. The NFTMO has been involved in consultation - challenging on the practicalities and seeking assurances that the particular circumstances and worth of the sector are taken account of.
Universal Credit rolls out - current plans are for claims to existing benefits to close during 2016. So, all new benefit claimants across the country will claim Universal Credit instead of the benefits it replaces - Jobseeker’s Allowance, including those with existing Housing Benefit and Working Tax Credit claims.
Most existing benefit claimants will be moved over to Universal Credit during 2016 and 2017. It has now been acknowledged that at least 700,000 claimants will not be on Universal Credit by the end of 2017. Decisions on the later stages of the Universal Credit roll-out will be determined by the completion of the new IT system.