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Seaside towns ‘need rent controls’

by: Heather Greig-Smith
  • 02/05/2017
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Seaside towns ‘need rent controls’
Government should introduce rent controls in seaside towns to kick-start a renaissance, according to a housing report.

Housing and Finance Institute report Turning the Tide says time limited and localised rent controls are needed in the poorest coastal communities. It has identified a “toxic trio” of poor quality housing, an abnormally high proportion of people renting and a lack of job creation.

The Institute said a new ‘Fair Value Rents regime’ would repair damaged housing markets in coastal communities.

The report also calls for a new “one-stop shop” to allow councils to clamp down on rogue landlords and drive up housing standards.

In addition it wants greater financial and skills support from central government for deprivation hotspots that have become ‘house building not-spots’ – places where house builders, developers and financiers don’t want to build and invest.

The Housing and Finance Institute (HFI) was launched by the housing and planning minister in June 2015. It supports councils and businesses delivering homes for their communities.

 

Dysfunctional markets

Natalie Elphicke, chief executive of The Housing & Finance Institute, said: “There is a toxic trio of abnormally high proportions of rented housing, for that rented housing to be of poor quality, and a lack of job creation. Dysfunctional housing markets are proving fundamental to the spiral of decline in many of Britain’s coastal communities – and something radical must be done to turn the tide.”

She said the proposals can help to break up the concentration of housing poverty and attract new high quality building and investment.

“In particularly, a new fair rents regime would significantly speed up the renewal of the most deprived areas, drive a fairer deal for tenants and taxpayers – and kick-start much needed regeneration.”

The paper highlights government findings that show nine out of ten of the most deprived smaller areas are by the sea. Private rented housing in coastally deprived areas within Blackpool, Margate, Hastings and Jaywick sometimes exceeds 80% of housing on a street – and it is often expensive and of extremely poor quality.

HFI said too often tenants overpaid for housing which just isn’t worth the rent being charged. Rents are also inflated because they are underpinned by benefit rent allowances which are excessive for the location and quality of the property.

It recommends that a time limited local application of a fair value rents regime is introduced. This would set, by law, a locally-assessed fair value rent for the property, reflecting the location and quality of the property, within the existing local housing allowance.

The report claims this would adjust markets where rent levels are defective, and reward landlords who invest in better quality properties and appropriate management standards.

The renewal period would create a window to repair the most extreme economically dysfunctional housing markets where rental markets have warped and damaged ordinary capital values for homes.

 

Backfire

In the past, housing charity Shelter has concluded that rent caps are risky and can backfire, resulting in worsening conditions and rising evictions.

Chris Norris, head of policy, public affairs and research for the National Landlords Association, said the private rented sector is not the sole solution to meeting housing need.

“The answer is more housing, particularly at the affordable rent end of the spectrum, and we agree that local authorities should be empowered and encouraged to add to their local stock,” he said.

“Unfortunately some areas suffer from poor conditions and are at times blighted by anti-social behaviour, but applying rent controls based on property condition and location would do little more than compound problems. Prior to the abandonment of traditional rent controls in the UK in the late 1980s it was common to find tenants preventing their landlords from making much needed home improvements because of the fear that it would lead to rent increases.”

“Instead local authorities should be encouraged to use the enforcement powers they already have to make sure that everyone, irrespective of how much they can afford to pay, can expect a safe and decent quality home.”

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