RLA : RPI : Byers 'entices' investors with HB conditions

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the August / September 2001 issue

Byers 'entices' investors with HB conditions - August / September 2001

Housing benefit could be linked to 'a selective licensing scheme'. Secretary of State for Transport, Local Government and the Regions Stephen Byers (right) told the Social Market Foundation earlier this month.

Addressing 'the modernisation and reform agenda for housing', the recently appointed minister endorsed the role of the private rented sector which now, he said provided 12 per cent of housing compared with 60 per cent prior to the Second World War.

'Home ownership has never been a solution for everyone', he said. 'A healthy private rented sector can help enormously to oil the wheels of the housing market and the labour market too. And private renting is often the only realistic option for those who cannot yet buy, but do not qualify for priority access to social housing.

'We want to see more of it'.

But Byers said 'too much of what we have got is of poor standard and badly managed'.

His solution is 'to persuade investors that private renting is a worthwhile business to be in, to help well-intentioned landlords, and to ensure all landlords provide decent accommodation'.

The Government could not continue to pay out £4.5bn a year in housing benefit to landlords who fail to provide a proper quality of accommodation, he said. 'The payment of housing benefit to landlords is an important lever that we have to drive up standards in the private rented sector.

'I believe that it might be appropriate to attach conditions to the payment of housing benefit. One such condition could be a requirement to improve the state of the property so that it meets our definition of decency'. Landlords in receipt of housing benefit also had a responsibility 'to make sure their tenants behave in a civilised manner'.

While there would 'always be a place for small landlords', investment from financial institutions along the lines of the US and Dutch markets was also needed. Institutions had nothing to fear by investing in the private rented sector, said Byers. 'This Government is not about to reintroduce across the board controls or give private tenants lifelong security.

'We want long term commitment from investors who recognise that building for rent can be an intrinsically sound business proposition with reasonably low risk'.

Byers' speech, which included a commitment to 'help the renovation of 200,000 poor condition private sector properties between 2001 and 2004' (partly by ensuring 'money spent by local authorities goes further'), received a mixed response. The Chartered Institute of Housing welcomed the measures whilst landlords reacted more cautiously.

In support of them, Richard Lambert of the British Property Federation said: 'defining and policing the areas where landlords would have to be licensed would be unworkable, while withholding housing benefit would further shrink the private rented housing available to those on benefit'.

other artilces from the August / September 2001 issue