Regulations on the future of social housing took pride of place in Parliament yesterday but the Government policy on social housing was left unclear as minister Grant Shapps refused to accept amendments to the localism bill which would have made the implementation of two year tenancies clear. Instead he reiterated his point that tenancies of only two years should only be issued in exceptional circumstances with the normal tenure being somewhere in the region of 5 years.
Will affordable housing become unaffordable?
The length of tenure changes came about at the same time as social landlords were given the right to charge up to 80% of the market levels in the area the homes were built in. The policy was questioned at the time with many homeless charities saying that the policy would result in no affordable housing being built in London because the rents would be unaffordable. The minister’s refusal to actually give regulatory guidance on when the two year tenancy limit can be applied will further alienate those who are opposed to the changes.
Private landlords happy with six month tenancies
Of course private landlords can offer as little as six month contracts to tenants and although this too has been questioned by charities and social groups there is little chance of this changing. Private investors who take out landlord insurance to protect themselves from a variety of happenings, including evicting anti-social tenants will fight their corner long and hard if the six month minimum is challenged.
Government policy becoming muddled
It seems as though Government initiatives such as the Welfare Reform bill and the much vaunted “Green Deal” become more complicated by the day as ministers constantly change position and priorities in their implementation.
Bank chief forecasts flood of defaulters
One thing is for sure and that is private and social landlords will be overwhelmed by the demand created if interest rates do go up in the near future. According to Richard Banks the Chief Executive of Asset Revolution, a company that deals in mortgage bail outs, there will be a “tsunami” of mortgage defaulters even if interest rates rise only slightly, a forecast that will not lighten the mood in the Bank of England as they debate what to do at the next interest rate meeting.