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More Than 3 Million New Social Homes Needed To Tackle ‘Worsening’ Housing Crisis – Shelter

By | Social Housing

Housing charity recommends social homes be extended to those who may not qualify under current system.

Millions of social homes should be built over the next 20 years to tackle the “worsening” housing crisis and extend provision to more people in need, housing charity Shelter has said.

Some 3.1 million new homes are needed to provide for homeless households and those living in poor conditions, people living with a disability or long-term illness, and over-55s.

But the landmark report also recommends that those in need who would not qualify under the current system should also be provided for. That includes “trapped renters” – young families stuck with expensive rents and little prospect of being able to buy their own home.

The 220-page ‘Building for our future: a vision for social housing’ report was launched following the Grenfell Tower fire in June 2017, bringing together 16 independent commissioners including Labour MP Ed Miliband, Baroness Doreen Lawrence and Grenfell survivor Ed Daffarn.

Commissioners spent one year speaking with hundreds of social tenants, 31,000 members of the public, and housing experts. Shelter will present their recommendations to the Prime Minister and Labour leader Jeremy Corbyn today.

Among the proposals put forward are the construction of 1.27 million homes for homeless households, those living with a disability or long-term illness, or living in very poor conditions.

It suggests nearly 700,000 homes be built for older private renters struggling with high housing costs beyond retirement, in figures calculated using government data and figures from the Office for National Statistics.

The charity also calls for 1.17 million homes for trapped renters.

Among them is Lucie, who works full-time as a welfare case officer in a charity.

The 30-year-old rents privately and lives with her two children aged 11 and 6, but says they have had to move eight times since her daughter was born in 2007.

“I really feel that if I’d been offered social housing and I’d been able to live somewhere affordable for the last ten years, I think I’d probably be in a position now where I could buy my own property, and that social home could then go back to someone else who needs it,” she said.

“But because I’ve had to move so many times, and rents are so high – the financial implications have been devastating. It simply hasn’t been possible for me to save the money. Just that little bit of stability for me and my children would have made a big difference.”

The report found that just 6,500 more social homes were provided last year, but Shelter is calling for 155,000 to be built between now and 2039, each home partially funded by the government.

The commission suggests that the scheme is the best way to ensure the government reaches its goal to build 300,000 houses a year.

The proposals would cost nearly £11bn on average each year during construction, yet it is estimated that the benefits will outweigh the costs as some two-thirds would be recouped through housing benefit savings and an increase in tax revenue.

Research from Capital Economics estimates that the investment will have “fully paid for itself” after 39 years.

I really feel that if I’d been offered social housing and I’d been able to live somewhere affordable for the last ten years, I think I’d probably be in a position now where I could buy my own property

Alongside “essential” reforms, the charity is calling for a new “Ofsted-style” regulator to protect residents and put in place common standards across both social and private renting.

It also recommends an organisation be set up to better represent social housing tenants’ views in central and local government, and measures to be put in place to ensure enough investment to maintain social housing and neighbourhoods.

Baroness Sayeeda Warsi, one of the report’s commissioners, said: “Social mobility has been decimated by decades of political failure to address our worsening housing crisis. Half of young people cannot buy, and thousands face the horror of homelessness.

“Our vision for social housing presents a vital political opportunity to reverse this decay. It offers the chance of a stable home to millions of people, providing much needed security and a step up for young families trying to get on in life and save for their future. We simply cannot afford not to act.”

Miliband added such a vision would be a way to “restore hope, build strong communities, and fix the broken housing market”.

He said: “The time for the government to act is now. We have never felt so divided as a nation, but building social homes is a  priority for people right across our country. This is a moment for political boldness on social housing investment that we have not seen for a generation.”

John Healey MP, Labour’s shadow housing secretary, said: “Housing will be at the heart of the next Labour government’s plans to rebuild Britain, with a million new genuinely low-cost homes in the first ten years alone.”

The Ministry of Housing, Communities and Local Government has been contacted for comment.

Source: Huffington Post UK

Making sense of ESG popularity

By | Residential Property, Social Housing

The rise of ethical funds and sustainable investment brings into question just how broad and subjective the space can be  

One of 2018’s most-used buzzwords in investment has been “ethical”. The rise in popularity of environmental, social and governance investing has been widespread, and in 2017 more than £1bn of net retail money flowed into ethical funds, the highest annual inflows on record.

As of October this year, ethical funds under management reached £16bn, representing a 1.3 per cent share of industry FUM, according to the Investment Association. In the month of October alone, net retail inflows reached £91m.

So where did it all begin? The origins of responsible investing in the UK date back to efforts of investors who were Quakers, when the society prohibited its members from the slave trade in the 18th century.

The same century saw Methodist figures align their business activities with their faith.

Faith-based investing is one approach to responsible investing. It is for clients who wish to invest in accordance with their faith, and many such investment solutions are available. The most prominent type of faith-based investment is Sharia-compliant investment, or Islamic finance.

As ethical funds have been gaining in popularity, the pressure is on for advisers to be able to understand the sector, and the diverse language that goes with it.

Investing for a better world

Ethical consultancy SRI Services founder Julia Dreblow says the work she has done in the past seven years is centred on how to classify this area of investment so it makes sense for advisers.

The interest of advisers in responsible investing has hugely increased in recent years, she adds.

Heron House Financial Management founder Saran Allott-Davey has been offering advice on investments aligned with her clients’ personal beliefs for 24 years. She too has seen a “significant increase” in clients’ interest as well as the availability of funds.

“I think part of this is due to the  high profile that climate change and plastic pollution have had in recent times and people realising they have to do their part,” she says.

Offering advice on investment solutions tailored to clients’ personal beliefs could be a way for advisers to stand out from the crowd and attract new clients.

Morningstar Europe director of passive strategies and sustainability research Hortense Bioy says that it provides planners with an opportunity to have a deep conversation with clients and connect with them.

She believes that offering advice on responsible investing gives advisers a chance to truly differentiate themselves.

Women and millennials in particular are increasingly asking for advice on investment in line with their ethical principles, she adds.

When it comes to regulation, the European Commission revealed in its Action Plan on sustainable finance that it is seeking to amend Mifid II to require “incorporating sustainability when providing financial advice” over the course of 2019.

It recommended advisers should be required “to ask about, and then respond to, retail investors’ preferences about the sustainable impact of their investments, as a routine component of financial advice”.

In preparation for any potential changes to regulation, advisers will need to have knowledge of the responsible investment landscape and any available investment offerings.

Communicating responsible investing to clients

A good start to map investor preferences is via a simple fact-find. SRI Services offers a questionnaire on its website, asking clients whether they would like to consider environmental, social, ethical or religious issues when looking to invest.

Dreblow believes SRI and ESG issues should be a part of every adviser’s initial fact-find questionnaire.

Advisers should first identify what issues appeal to the client the most based on the questionnaire outcome, followed by a discussion. Allott-Davey says sometimes it is clear straight away that the client is not concerned with aligning their investments with their world views. “And that’s completely fine,” she says.

She adds that when her clients show interest, the next phase is educational. She finds that clients usually have a “basic understanding” of ethical investments. This is where the adviser can step in to help clients navigate the market and introduce what solutions are on offer.

Apart from identifying which issues are close to the client’s heart, advisers and clients should together decide on the most suitable investing style.

Dreblow notes that despite the increase in demand, this area of investing is still rather small and many advisers can get overwhelmed with it.

Similarly, Bioy says that the seemingly robust landscape with a multitude of labels and approaches can pose a barrier for advisers to enter the space. She says that her team is currently finalising a set of tools for advisers to help them learn the industry language. The whole project is set to be completed by early February.

Jargon busting

The oldest and most commonly used approach to ethical investing is to start with a negative screen. This takes all stocks available and removes the ones that do not invest in line with the manager’s strategy. It is individual to each fund manager but can cover areas such as tobacco, arms, gambling, and can exclude companies based in countries they believe to have a repressive regime.

Dreblow explains that there are many different styles of responsible investing. She says: “Someone could look at climate change and say: ‘We need to avoid oil or mining companies’. Others would say that a better strategy would be to hold shares of a company and talk to them and encourage them to reduce their emissions.”

According to Dreblow, both investing styles – negative screening as well as responsible or active ownership and engagement – complement each other.

“They can work well together. From a company’s perspective, if [the company] thinks that people might sell their shares, then it is more likely to respond to engagement.”

Bioy calls this an “ESG value contrarian approach”, in which the manager looks for companies with low ESG ratings and an assumed potential of future increase in these scores.

ESG versus impact investing
Choosing investments with ESG issues in mind is not strictly a goodwill act. It can have financial incentives too.

As Bioy points out, excluding (for example) tobacco firms can make sense from an investing perspective as changes in consumer preferences, as well as trends in regulations, suggest that these firms are on the decline and do not hold much promise of future rewards for shareholders. The same goes for oil companies, she says.

Investing in companies which score well on environmental (such as carbon footprint), social (human rights or working conditions), or governance (this can include, but not limited to, gender equality) issues can be a savvy investment decision.

Bioy says: “Studies have proved that companies with good ESG ratings provide higher returns.”

Impact or thematic investing (investing which focuses on companies actively trying to find solutions to the world’s stinging challenges like a shift to renewable energy or waste and water management) are more likely to provide shareholders with returns than past winners like oil firms. Bioy says that the future is already happening; electric cars could fully replace petrol- or diesel-engine cars in two decades.

The final step for advisers is to identify the best fund options. SRI Services offers a comprehensive list of such funds, while Morningstar has a sustainability rating which evaluates how well companies in a fund’s portfolio are managing the ESG investing factors relevant to their industries.

With inflows continuing to go through the roof and more providers creating ethical offerings, it is one area that advisers must fully understand and be prepared for when talking to clients.

Source: Money Marketing

UK house prices pick up amid ‘subdued’ market

By | Residential Property

Values rise by 0.3% in November – but few predict rapid growth in short-term

House prices inched ahead in November but Brexit uncertainty has left the property market “relatively subdued” according to Nationwide building society.

The average UK home rose in price by 0.3% month-on-month, pushing the annual rate of inflation up to 1.9%, up from 1.6% the previous month. The average home now costs £214,044.

However in cash terms the average price of a home in the UK actually fell by nearly £500 on the month, but because of seasonal adjustments used by Nationwide, its index recorded a rise.

The direction of house prices will be heavily dependent on the outcome of the Brexit vote on 11 December and what emerges after that. Nationwide said that if the uncertainty lifted, then prices were likely to spring back.

Its chief economist, Robert Gardner, said: “If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick up through next year.

“The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.”

But the Bank of England’s warning this week that house prices could tumble by 30% following a no-deal Brexit is already having an impact on the market, according to property experts.

Jonathan Hopper, managing director of Garrington Property Finders, said: “While the ‘armageddon’ scenarios run by Mr Carney will be brushed off by many as unlikely, they will further sober the thinking of over-optimistic sellers and cautious buyers.

“For now, his comments have served only to dial up the uncertainty – and the pattern of subdued business-as-usual continues.

“Despite the shortage of homes for sale, a steady stream of strategic buyers are pouncing on buying opportunities that may not be around if the market normalises in 2019.”

Nationwide highlighted how the supply of housing was improving after a decade in which Britain had not built sufficient housing for a growing population.

It said: “After falling by almost 60% in the wake of the financial crisis, there has been a significant pick-up in construction in recent years. New-build completions in England in 2017/18 reached 195,300, around 3% below 2007/08 levels.”

It added that once additional dwellings were counted – particularly from the wave of office-to-residential conversions, then housebuilding has virtually returned to peak 2007 levels. In total, 1.9m dwellings have been built in England since 2007, representing an 8.5% increase in the total stock of homes.

Source: The Guardian

Allied Healthcare to transfer care contracts

By | Social Housing

A major UK home care provider, offering support to 13,000 older and disabled people, is seeking to transfer or sell all its contracts to other providers.

Allied Healthcare was warned this month by the care regulator about its financial sustainability.

Since then, some local authorities have already taken steps to find new providers.

The company says it is working closely with councils to ensure there is no disruption to people’s care.

Allied Healthcare provides services such as preparing meals, washing and giving medication.

Last week, the Care Quality Commission, which regulates such services in England, issued a notice – warning that it had serious doubts about the future of the company.

It was the first time the regulator had issued such a notice about the financial sustainability of a social care provider.

‘Challenging environment’

The CQC said it was concerned about the viability of services run by Allied Healthcare from the end of November and was warning councils to make contingency plans.

It said the company had failed to provide adequate assurances regarding future funding and there was now a credible risk of disruption to services.

But a company spokesperson said on Friday that the CQC statement had “negatively impacted” the firm, led to some customers transferring care services to alternative providers, and disrupted staff retention and recruitment.

“These developments have intensified the impact of the challenging environment within which we operate and come immediately prior to the Christmas period, when pressures on care providers are at their highest.”

The company said it had to re-evaluate its long-term business plan and was exploring the sale or transition of services to alternative providers, including the transfer of staff.

The BBC understands it has now been able to extend its credit by three weeks from the end of November.

Graph on fees

Who’s to blame?

By Alison Holt, social affairs correspondent

The watchword coming from all involved – in what appears to be the demise of one of the UK’s largest providers of homecare – is reassurance.

Allied Healthcare, councils, the regulator and the government are focused on making sure vital care will continue as normal for the more than 13,000 people, who get visits from the company’s staff.

No one can afford to get that wrong. But once handovers have happened, serious questions will remain about the pressure on the care market. Earlier this year, Allied blamed low fees from local authorities for some of their financial woes.

Councils themselves warn of a £3.5 billion shortfall in funding for adult social care by 2025. And campaigners describe the care system as failing.

The government has promised a green paper on the long term funding of social care by the end of the year. Previous deadlines have been and gone, and with so much political turmoil, the fear is it will slip again.

But for many, the financial problems faced by Allied will have underlined just how much strain the care system is under right now.


‘Robust plans’

Andrea Sutcliffe, chief inspector of adult social care at the Care Quality Commission (CQC) said Allied Healthcare had had “every opportunity” to put together a plan for its future sustainability and “failed to do so”.

She said there had been a clear requirement for the CQC to issue the notice so local authorities could be informed about the “credible risk of service disruption to people’s care” and could make contingency plans.

Colin Angel, from the UK Home Care Association, said: “Reasonable arrangements to contract with prospective providers must be put in place swiftly.

“Fees for these services need to be set at rates which are financially sustainable for both the short and longer term. ”

The Local Government Association said it was working closely with the CQC, the Department of Health and social services to ensure continuity of care for people currently supported by Allied Healthcare.

Ian Hudspeth, of the LGA, said councils had “robust contingency plans in place”. And he added: “Councils are confident of ensuring care for people affected and are also focused on retaining the highly valued staff that deliver these services to help keep the transition in business ownership as smooth as possible.”

Source: BBC News UK

Today is Independence Day for the English social housing regulator

By | Social Housing

As the Regulator of Social Housing becomes independent today, Fiona MacGregor writes that it is essential to have a standalone, fee-funded regulator


Today is a big day for the Regulator of Social Housing, as we become an organisation in our own right.

This change in status brings into effect the conclusion of the tailored review of the Homes and Communities Agency, which began back in February 2016.

It has not been a quiet time for the regulator, or for the sector, in that period.

Among other things, the Welfare Reform and Work Act introduced rent reductions, which are now in their third year.

The roll-out of Universal Credit is building up pace, with increasing numbers of social housing tenants covered by the new regime.

Private registered providers were classified to the public sector and then re-classified as private sector bodies by the Office for National Statistics following the implementation of de-regulation measures, including the removal of the regulator’s consents powers.

Over that period, we have successfully introduced and refined our operating model, which includes the ‘in-depth assessment’ approach on which we continue to receive good feedback.

We have also recently seen the introduction of the housing administration regime although, as with our moratorium powers, our aim would be to identify and remedy issues before those powers need to be used.

Our recent experience with a number of cases that have been non-compliant has shown that although we will always be co-regulatory in our approach, we stand prepared to take decisive regulatory action when necessary.

Sadly, there has also been the tragic Grenfell Tower fire which is currently the subject of a public inquiry.

While we await the government’s response to the recommendations of the Hackitt Review, the events at Grenfell Tower have sparked a significant public debate, as well as a debate across the sector, about how best to meet the needs and aspirations of tenants.

Some of those questions are reflected in the government’s recently published Social Housing Green Paper, as well as in the call for evidenceon the Review of Social Housing Regulation.

We urge as many stakeholders as possible to respond to both of these consultations, and for landlords, to reflect the views of your tenants in doing so. You can only shape the debate if you participate.

The green paper consultation may lead to changes in the role and remit of the regulator.

We are confident that, as a standalone body, we will be able to adapt to further changes as they emerge. Indeed, one of our core values, developed by our staff, states “we are agile and react positively to change”.

In the meantime, however, we think it is a huge tribute to our staff that you will not have seen any diminution in focus in our current role, and in our effective regulation, as we have prepared ourselves to become standalone. Support for that role, and for the way we undertake it, was underlined in the results of our recent Stakeholder Survey.

Becoming standalone means changes for us, such as the Regulation Committee becoming the board of the Regulator of Social Housing.

But for the sector, and our stakeholders, we actually hope that you will see no change in the things that matter to you – effective and proportionate regulation.

There can be no doubt that the need for effective economic regulation remains, alongside an increased focus on providing good services to consumers, both of which were very much reflected in the prime minister’s recent speech to the National Housing Summit.

The changes we have seen in recent years, along with any to come, reinforce for us that it is essential to have a strong, standalone fee-funded regulator, in line with the findings of the tailored review.

Source: Inside Housing

People should be proud of their council house – Theresa May

By | Residential Property, Social Housing

People who live in council houses should be made to feel proud of their homes, Theresa May has said.

The PM announced £2bn to build new homes in England, in an attempt to remove the “stigma” of social housing.

Under the plan, housing associations, councils and other organisations will be able to bid for the money to spend on new projects, starting from 2022.

Labour said the announcement fell “far short” of what was needed for the social housing sector.

BBC home editor Mark Easton said the government hopes the money will allow local authorities and housing associations to build schemes that would otherwise seem too risky.

He said the sector’s calls to provide more confidence about future funding – so the 300,000 extra homes required in England each year can be built – had appeared to have been listened to.

Mrs May told a National Housing Federation summit in London: “Some residents feel marginalised and overlooked, and are ashamed to share the fact that their home belongs to a housing association or local authority.

“On the outside, many people in society – including too many politicians – continue to look down on social housing and, by extension, the people who call it their home.”

She will encourage housing associations to change how tenants and society view social housing.

“We should never see social housing as something that need simply be ‘good enough’, nor think that the people who live in it should be grateful for their safety net and expect no better,” she said.

“I want to see social housing that is so good people are proud to call it their home… our friends and neighbours who live in social housing are not second-rate citizens.”

In mixed developments, she said it should be impossible to tell the difference between full-price and affordable housing, which should not be “tucked away out of sight and out of mind”.

David Orr, chief executive of the National Housing Federation, said the prime minister’s announcement was “extremely welcome”.

“This represents a total step change. For years, the way that money was allocated meant housing associations couldn’t be sure of long-term funding to build much-needed affordable housing,” he said.

He said that by changing the way the funding was allocated, ministers had given “long-term confidence and confirmed that we are trusted partners in solving the housing crisis, building new homes and communities”.

But shadow housing secretary John Healey said the reality was spending on new affordable homes had been “slashed” and the number of new social rented homes built last year “fell to the lowest level since records began”.

“If Conservative ministers are serious about fixing the housing crisis they should back Labour’s plans to build a million genuinely affordable homes, including the biggest council house-building programme for more than 30 years,” he said.

The English housing survey for 2016/17 reported that 3.9 million households – about nine million people – lived in the social rented sector, which was 17% of households in the country.

The funding covers the next spending review period, from 2021 through to 2028.

Downing Street said the money was separate to the £9bn of public funding put toward the existing affordable homes programme until 2022.

Source: BBC News

UK inflation hits six-month high of 2.7%

By | Residential Property

The UK inflation rate unexpectedly rose in August to 2.7%, the highest level in six months.

Economists had expected a Consumer Prices Index rate of 2.4%. The pound rose after the data was released by the Office for National Statistics.

Wages are still rising more than inflation, with data last week showing wages, excluding bonuses, grew by 2.9% in the three months to July.

Rising prices for recreational goods, transport and clothing drove the rise.

In July, CPI was 2.5%, which had been the first jump in the index since November.

Mike Hardie, head of inflation at the ONS, said: “Consumers paid more for theatre shows, sea fares and new season autumn clothing last month.

“However, mobile phone charges, and furniture and household goods had a downward effect on inflation.”

inflation

Prices rose less sharply for furniture, household goods and communications.

The year-on-year rise in CPI in August meant that inflation was narrowing the gap with wage increases, with economists waiting for the August earnings figures.

“Today’s inflation data show the rate of price growth accelerated in August, and may well prove to have exceeded total earnings growth in the same period. Unless UK workers can increase their productivity, this trend is likely to continue – squeezing living standards over the medium term,” said Alastair Neame, senior economist at the Centre for Economics and Business Research.

Sterling rose to $1.32 following the news, its highest level since July.

“The numbers reinforce expectations that policymakers will gently lift interest rates over the next couple of years,” said Ben Brettell, senior economist at Hargreaves Lansdown.

Theatre tickets

The Bank of England raised its key interest rate for only the second time in a decade last month. The current interest rate of 0.75% is the highest since March 2009.

It has also forecast that inflation will fall back to the target rate of 2% by 2020.

“The figures won’t come as welcome news to the Bank of England, though – they’ll be desperate to leave policy unchanged until we get some clarity over Brexit and won’t want to be forced into a rate rise by accelerating prices,” said Mr Brettell.

The CPI measure reached 3.1% in November 2017, when price rises were fuelled by the weakness in the pound following Brexit vote.

In August, the largest change in prices was in the cultural services sector, where theatre tickets rose, and also games, toys and hobbies, while prices for computer goods rose after falling a year ago.

Temporary rise

The ONS said transport costs as a component of inflation increased, largely because of rises in sea and air fares. Petrol prices, though, rose by 1.4 pence between July and August, less than the 1.8 pence rise of a year earlier.

The average price of clothing and footwear rose 3.1% between July and August, faster than the 2.4% a year before. While clothing prices usually rise between July and August, the ONS said women’s and children’s clothing drove the rise.

Howard Archer, chief economic adviser to the EY Item Club, said the fact that the inflation rise was fuelled by reaction and cultural goods meant it would be temporary.

“We would expect this to unwind in next month’s release,” Mr Archer said.

The Retail Prices Index (RPI), a separate measure of inflation, was 3.5% in August, up from 3.2% in July.

Source: BBC News

 

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