Inquiry into Housing in Northern Ireland

VOLUME 1 - REPORT, MINUTES OF PROCEEDINGS AND MINUTES 
OF EVIDENCE OF THE COMMITTEE RELATING TO THE REPORT

COMMITTEE FOR SOCIAL DEVELOPMENT

1. The Committee for Social Development is a Statutory Committee of the Northern Ireland Assembly, established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement and under Assembly Standing Order No 46.

2. The Committee has a scrutiny, policy development and consultation role with respect to the Department for Social Development and has a role in the initiation of legislation.

3. The Committee has power:

    • to consider and advise on Departmental budgets and Annual Plans in the context of the overall budget allocation;
    • to approve relevant secondary legislation and take the Committee Stage of relevant primary legislation;
    • to call for persons and papers;
    • to initiate inquiries and make reports
  • to consider and advise on matters brought to the Committee by the Minister for Social Development.

4. The Committee was established on 29 November 1999 with 11 members including a Chairperson and Deputy Chairperson and a quorum of 5. The membership of the Committee is as follows-

    • Mr F Cobain (Chairman)
    • Ms M Gildernew (Deputy Chairperson)
    • Sir John Gorman
    • Mr T Hamilton**
    • Mr B Hutchinson
    • Mr G Kelly
    • Mr D McClarty*
    • Mr D O'Connor
    • Mr E ONeill
    • Mr M Robinson
    • Mr J Tierney
  • Mr S Wilson

5. All correspondence should be addressed to the Clerk to the Committee for Social Development, Room 419 Parliament Buildings, Stormont, Belfast BT4 3XX.

* Mr McClarty was removed from the Committee on 6 February 2001.

** Mr Hamilton was appointed to the Committee on 6 February 2001.

TABLE OF CONTENTS

Volume one
Report and Proceedings of the Committee

1.0 Principal Recommendations
1.1 Private Sector Renewal
1.2 Houses in Multiple Occupation and Regulation of the Private Rented Sector
1.3 The Right to Buy for Housing Association Tenants
1.4 Large Scale Voluntary Transfers and the Role of the Housing Executive

2.0 Methodology
2.1 Background
2.2 Terms of Reference
2.3 Specialist Advice
2.4 Written Submissions
2.5 Oral Evidence

3.0 Introduction

4.0 Private Sector Renewal
4.1 Background
4.2 Consultations
4.3 Principal Recommendation
4.4 Some Further Ideas to be considered in relation to Private Sector Renewal

5.0 Houses in Multiple Occupation (HMO) and the Regulation of the Private Rented Sector (PRS)
5.1 Background
5.1.1 Law and Policy
5.1.2 Regulation of the Private Rented Sector
5.1.3 Regulated and Restricted Properties
5.1.4 Uncontrolled Furnished Sector
5.1.5 More Expensive Dwellings
5.1.6 Lower Cost New Build and Sold Housing Executive Dwellings
5.2 Consultations
5.3 Principal Recommendation
5.4 Some Further Ideas to be considered in relation to Houses in Multiple Occupation and the
Regulation of the Private Rented Sector

6.0 Right to Buy (RTB) for Housing Association Tenants
6.1 Background
6.1.1 Concerns and Questions
6.1.2 Why do we have Right to Buy
6.2 Consultations
6.3 Principal Recommendation
6.4 Some Further Ideas to be considered in relation to the Right to Buy for Housing Association Tenants

7.0 Large Scale Voluntary Transfers and the Role of The Northern Ireland Housing Executive
7.1 Background
7.1.1 What Other Approaches are Available?
7.1.2 What are the Main Features of Arms Length Arrangements?
7.1.3 What do Other Regional Assemblies propose?
7.1.4 What are the Key Issues for Northern Ireland?
7.2 Consultations
7.3 Impact of LSVT on the Role of the Housing Executive
7.4 Conclusion
7.5 Principal Recommendation
7.6 Some Further Ideas to be considered in relation to Large Scale Voluntary Transfers
and the Role of the Housing Executive

Minutes of Proceedings relating to the Report
Minutes of Evidence relating to the Report
List of witnesses who gave oral evidence
List of written evidence submitted to the Committee
Glossary

Volume Two - 
Written Submissions Relating to the Report

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REPORT

1.0 PRINCIPAL RECOMMENDATIONS

1.1 Private Sector Renewal

The Social Development Committee considers that the introduction of a grants system based on a largely discretionary, rather than a mainly mandatory, approach should facilitate finer targeting and offer more options in helping those in poor housing conditions (4.3).

1.2 Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector (PRS)

The Social Development Committee considers that there should be a transfer of responsibility for this function from the Department for Social Development to the Northern Ireland Housing Executive and that the Housing Executive should be responsible for introducing and operarting a licensing scheme.(5.3).

1.3 The Right to Buy (RTB) for Housing Association Tenants

Whilst the extension of the statutory right to buy to housing association tenants should proceed at this stage, the Committee considers that a complete review of the scheme should be initiated along the lines suggested by the Chartered Institute of Housing (6.3).

1.4 Large Scale Voluntary Transfers (LSVT) and the Role of the Housing Executive

The Social Development Committee believes that there is a need for a body to take a strategic role in relation to housing provision in Northern Ireland. The Committee recommends that the Northern Ireland Housing Executive should have an enhanced strategic role and that the proposed Housing Bill should address the conflict between such a role and the part the Housing Executive plays as the largest social landlord in Northern Ireland (7.5).

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2.0 METHODOLOGY

2.1 Background

The Social Development Committee decided, at a Committee meeting on 11 January 2001, to investigate the content of the proposed Housing Bill to allow identification of suitable topics for inclusion in the Future Work Programme. The Committee considered the matter further at its meeting on 18 January 2001.

On 25 January 2001, following detailed considerations and an explanation from the officials of the policy intentions behind the legislative proposals, the Committee agreed to investigate six main areas:-

 

    • Private Sector Renewal

 

    • Houses in Multiple Occupation and the Regulation of the Private Rented Sector

 

    • Large Scale Voluntary Transfers

 

    • Housing Association Tenants - Right to Buy

 

    • Anti - Social Behaviour

 

  • Homelessness

The Committee agreed, at a meeting on the 22 March 2001, that Private Sector Renewal, Houses in Multiple Occupation and the Regulation of the Private Rented Sector, Large Scale Voluntary Transfers and Housing Association Tenants - Right to Buy be the subject of a single report. Two further and separate inquiries into 'Anti-Social Behaviour' and 'Homelessness' would be conducted.

2.2 Terms of Reference

The following Terms of Reference were set for the initial part of the Housing Inquiry:

1. Private Sector Renewal

"To investigate current Northern Ireland proposals to move from mandatory to discretionary grants schemes and group repair schemes and, if appropriate, conduct comparisons with the United Kingdom and the Republic of Ireland".

2. Houses in Multiple Occupation (HMO) and Regulation of Private Rented Sector (PRS)

"To (1) examine current Northern Ireland law and policy in relation to the above, conduct comparisons with the United Kingdom and the Republic of Ireland, summarise existing Northern Ireland practice in relation to HMO's and the PRS; and (2) identify benefits / disbenefits of new proposals".

3. Large Scale Voluntary Transfers and the NIHE

"To investigate current proposals in Northern Ireland for 'Large Scale Voluntary Transfers'; to identify the social benefits and disbenefits of such proposals and to examine the effects on, and future for, the Northern Ireland Housing Executive".

4. Rights of Housing Association Tenants to buy their Properties

"To investigate current proposals in Northern Ireland relating to the Rights of Housing Association Tenants to buy their own properties; to examine the social benefits and disbenefits of such proposals".

2.3 Specialist Advice

The Committee, at a meeting on 5 April 2001, considered and selected a Special Adviser to assist in its deliberations.

2.4 Written Submissions

The Committee considered 46 written submissions in relation to its Inquiry.

2.5 Oral Evidence

Oral evidence was heard from:

 

    • Department for Social Development

 

    • Chartered Institute of Environmental Health

 

    • National Union of Students (UK) and the Union of Students in Ireland

 

    • The Northern Ireland Tenant Action Project

 

    • The Northern Ireland Co-ownership Housing Association Limited

 

    • The Council of Mortgage Lenders

 

    • Chartered Institute of Housing in Northern Ireland

 

    • The Northern Ireland Federation of Housing Associations

 

    • Northern Ireland Housing Executive

 

  • Belfast City Council

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3.0 INTRODUCTION

The Social Development Committee is grateful to everyone who took the time to make written and oral submissions. These submissions have had a significant bearing on the principal recommendations made in this report. The Social Development Committee is particularly grateful to its specialist adviser, Paddy Gray, Senior Lecturer in Housing, University of Ulster for the contribution he made towards this Report and the recommendations contained in it. These recommendations are made on the premise that there should be local solutions to local problems. However, a contextual account of what is happening in Great Britain and the Republic of Ireland is also provided.

The Social Development Committee recognises that elsewhere in the United Kingdom the delivery of housing management services for social housing has gone through many changes since the early 1980s. There has been a shift away from the comprehensive housing authorities of the 1970s to a more diverse range of new social landlords, particularly housing associations, where the majority of new build for social housing is developed. In Northern Ireland, however, housing provision and management has been highly politicised and controversial and there has been little change in the way social housing has been managed for over 25 years. The Northern Ireland Housing Executive has dominated the sector throughout the period since power was transferred to it from local authorities in 1971. The Committee commends the Northern Ireland Housing Executive for the sterling work it has undertaken, since its inception, not only in the housing field but also in terms of the role it has played in improving the social well-being of the people of Northern Ireland. Housing associations, on the other hand, have grown slowly to account for just 3% of the housing stock in 1999.

In July 1996, after widespread consultation, the then Department for the Environment for Northern Ireland published its Housing Policy Review Document, "Building on Success: The Way Ahead." This was the first major review of housing policy since the setting up of the NIHE in 1971 but the review document did emphasise that it was based on the acceptance that the Housing Executive was to remain the single regional housing authority for Northern Ireland. Since then there have been many developments in the political process, notably the establishment of the Northern Ireland Assembly.

Since the early 1970s, the former DOE (NI) played a major role in deciding directions for housing policy under the framework of Direct Rule. Many policies that were introduced in GB in the 1980s, particularly those that encouraged the growth of alternative registered social landlords, were not introduced here. Whilst much of the existing housing legislation has mirrored legislation passed in GB, there are also many provisions that have not been introduced due to the special circumstances that exist in Northern Ireland. These include Large Scale Voluntary Transfers, Housing Action Trusts, Compulsory Competitive Tendering for Housing Management and recent changes in GB to the Homeless Legislation. It is important, however, that any understanding of change in Northern Ireland must reflect both the particular features of the Northern Irish housing scene, and the wider influences affecting housing and public services throughout the United Kingdom. It is also important to recognise that future housing policy must consider the needs of the local population and that it is not always necessary to bolt on to legislation that has been passed in Great Britain.

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4.0 PRIVATE SECTOR RENEWAL

4.1 Background

Grant aid to private owners to enable them to repair and improve their homes has been part of housing renovation policy in the UK for the past 40 years and has been a major component of policy since 1969. Until 1990 the broad elements of policy in this area were consistent across the UK, although subject to significant differences between countries, but since that date England and Wales, followed by Northern Ireland, have made significant changes to the framework for grant provision. In Scotland there are three main types of grant available to private homeowners. Standard amenity grants which are available as a right for the provision of missing amenities; improvement grants which are discretionary unless an applicant has been served with an improvement order from a local authority or the dwelling is in a Housing Action Area including improvement; and repair grants which are discretionary unless an applicant has been served with a notice from a local authority requiring works to be carried out.

In England, and Wales a new system of grants was introduced in 1990 matched in 1992 in Northern Ireland. Renovation grants were introduced to assist with the improvement or repair of dwellings. These grants were mandatory for work to bring dwellings up to the standard of fitness for human habitation.

In England and Wales the Discretionary Grants Scheme has been operative since December 1996. In March 2001, the DETR set out in detail the government's proposals for reforming the legislation governing private sector housing renewal for England and Wales. The basis of the reforms are to provide:

 

    • More discretion for authorities to address specific needs in their area.

 

    • More opportunity to target help effectively on those most at risk from poor quality housing.

 

    • More effective use of resources, allowing people to be helped more than at present.

 

    • Less dependency on grants, and better reinforcement of homeowners' responsibilities towards their properties.

 

    • More choice for homeowners and disabled people, e.g. between a grant or a loan, or between help with improvements or help with a move.

 

    • Better tools to tackle obsolete and surplus housing as a result of more scope for providing more help with moving house.

 

  • More consistency with wider Government objectives, including those of Modernising Government.

In the Republic of Ireland there are two strategic initiatives:

Improvement of works in lieu of Local Authority Housing:

This allows local authorities to improve or extend privately owned houses occupied or intended to be occupied by an approved applicant for housing as an alternative to the provision of local authority housing. Persons qualifying for this scheme include those whose application for local authority housing has been approved; those who occupy a local authority house or who have bought under the tenant purchase scheme and who wish to move to a privately owned house and return their existing dwelling to the local authority as well as a tenant of a voluntary housing body who has been a tenant for more than one year and who wishes to move to a privately owned house.

The local authority can also carry out improvement works under this scheme to privately owned houses which are owned by the applicant, where the house is defective or overcrowded for the needs of the applicant or owned by a relative of the applicant; and where the house is defective or would be overcrowded when the applicant moves into the house. The local authority may carry out any works to eliminate defects in the house or to provide additional accommodation where this is necessary to eliminate overcrowding or to accommodate a person not residing in the house who is approved for local authority housing.

The local authority will pay the full cost of the works carried out to the house. Participants will pay a reasonable weekly or monthly charge in respect of outlay of costs over a maximum of 15 years.

Disabled Persons Grant:

Local authorities may pay a grant for the provision of additional accommodation or necessary works of adaptation to a private house to meet the needs of a member of the household with a disability. Costs of the work must be more than £200 and grant aid is available for up to 90% of the works approved by the local authority normally up to a maximum of £14,000 although there is discretion to exceed this amount. There is no means test.

In Northern Ireland there are a number of grants which are currently paid to the private sector and which are either mandatory or discretionary.

 

    • The main private sector home improvement grants are set out in Part 111 of the Housing Order (NI) 1992 which are mandatory and discretionary and designed for a specific purpose.

 

    • Renovation and Replacement grants which are primarily mandatory and which are designed to help homeowners and tenants to make their homes fit for human habitation.

 

    • HMO grants serve a similar purpose, but are targeted at houses in multiple occupation. HMO grants are discretionary but become mandatory once a relevant statutory notice has been served.

 

    • Disabled Facilities grants are both mandatory and discretionary depending on the specific nature of the relevant works.

 

    • Minor Works Assistance grants that are available for minor works of improvement, repair, adaptation and safety/security measures.

 

  • Repairs grants are mandatory but only available when the local authority serves a statutory notice.

4.2 Consultations

Responses were received from 25 organisations. Whilst there were conflicting responses there was a general welcome to the proposed move from mandatory to discretionary grants schemes given that the current regime has not always resulted in the appropriate targeting of public funds and it has created some operational difficulties for Environmental Health Departments. There was concern that levels of unfitness in Northern Ireland are still unacceptably high at 7.3% and that unfitness levels in Fermanagh, Cookstown and Down are running at 17.5%, 13.0% and 10.6% respectively which suggests that the Housing Executive's present approach to area improvement, linked to their reluctance to implement certain of their statutory powers for dealing with individual unfit dwellings, runs contrary to their strategic objective of reducing unfitness.

Another concern that has been raised is that the experience of local authorities in England was that the move to discretionary grants, whilst allowing targeting of low-income home owners, led to the total grant budget not being spent and money being redirected to other spending priorities beyond housing services.

There has been a call for the statutory standard of unfitness in Northern Ireland to be revised to include more measures of condition and to provide an effective measurement of non-traditional stock. The Housing Executive could then draw up local strategies for all housing in Northern Ireland to deal with unfitness. There was also a call for the setting of clear targets for the reduction of unfitness in Northern Ireland over a ten year period.

An equivalent scheme which operates a percentage grant aid incentive scheme to encourage development in the public sector to 'lifetime homes' standard should also be introduced to the private sector.

Alternative sources of finance have been called for by reviewing the whole system of grant giving powers. The capacity for levering private finance should be investigated to make the existing mandatory grant funding go further than it currently does in meeting home owners' repair and improvement needs. At the one end of the spectrum, lower income households with very limited equity need grant assistance whilst, at the other end, homeowners on higher incomes and with equity in their homes should be encouraged to unlock and use that capital to pay for repairs and improvements. The NIHE should have the ability to make interest-bearing loans and also award grants which are repayable. Grants should only be given where no other option is available or practicable. Grants could be made recyclable by insisting that the grant is repaid once the property is sold.

Although there was support for Group Repair Schemes there was a call to widen the eligibility criteria and the scheme should be made more attractive. There was concern expressed, however, that many contractors have found difficulty in receiving payment and would not be prepared to engage in this type of work again.

Finally a view was taken that it does not make sense to make a switch now from mandatory to discretionary grants which stemmed from the Housing Policy Review 1996 as a different grants climate exists now where there is a robust grants budget and an absence of lengthy queues. In view of this, a better grants system could be tailored towards meeting the strategic needs of our local communities, harnessing the best from the GB experience and reflecting the changes in unfitness standards.

4.3 Principal Recommendation on Private Sector Renewal

The Social Development Committee considers that the introduction of a grants system based on a largely discretionary rather than a mainly mandatory approach should facilitate finer targeting and offer more options in helping those in poor housing conditions.

However, and in order to avoid allegations of unfair discrimination, such a system requires the support of well researched local strategies, good marketing, and clear targets which are subject to public scrutiny in the Draft District Housing Plans. The Social Development Committee has concluded that such an approach underscores the importance of the Housing Executive continuing to fulfil its comprehensive and strategic role in housing matters. The Social Development Committee acknowledges that housing policy has moved on from the days of very large targets (and public funding) together with an expectation of long time scales in tackling them. Now targets are expected to be tackled more quickly and at area level in tandem with other social and economic goals.

4.4 Some Further Ideas to be Considered in Relation to Private Sector Renewal

 

    • It is important to identify the housing conditions in Northern Ireland that need to be tackled and how the current grants regime has not tackled those conditions.

 

    • Discretionary Grant aid should be available to ensure the promotion of high standards and they should be targeted on an area basis.

 

    • The rules and regulations associated with the current schemes are due for an overhaul as they are working against the system by being administratively cumbersome.

 

    • The role of grants should be primarily for the elderly and disabled and to provide adequate security and heating in the home.

 

    • It is important to adopt a 'blank page' mentality in drawing up an appropriate scheme.

 

    • Grants are not properly targeting the elderly whilst means tested grants have excluded those on the margins.

 

    • There has been a focus on unfitness rather than disrepair and it would be useful for the Housing Executive to set targets on an area basis.

 

    • Too little private money has been attracted to assist with repair and improvement in the private sector. Commercial loans are expensive and there is a need to reinvestigate how low cost loans could be awarded.

 

    • More use of equity is needed to attract alternative forms of investment.

 

    • Group repair schemes have not sufficiently been spread out to tackle rural areas.

 

    • Local grants are needed to suit the needs of the region on an area basis. The Department would then be in a position to scrutinise how discretionary grants are awarded rather than make or defend them.

 

    • Relocation grants should be made available if the property is not worth improving.

 

  • The regular review of the effectiveness and targeting of private sector grants should be part of a wider appraisal of housing strategy. It requires continued access to the sort of research function associated with the exercise of a strategic role.

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5.0 HOUSES IN MULTIPLE OCCUPATION (HMO) AND THE REGULATION
OF THE PRIVATE RENTED SECTOR (PRS)

5.1 Background

In Northern Ireland the Housing Executive has estimated that there are 9,700 Houses in Multiple Occupation - housing 30,000 people. These are mainly to be found in Belfast, Londonderry and Portrush/Portstewart. HMO can include premises in the private rented sector, social rented sector and owner occupation although policy and enforcement concerns about HMO tend to focus on private rented premises. HMO play a vital role in the housing market by providing affordable flexible accommodation in areas of high demand where rents are high. In the light of the growing numbers of single person households and changing lifestyle patterns, demand for single person housing is expected to grow in Northern Ireland and HMO will therefore remain a significant feature of the housing market for the foreseeable future.

Physical conditions and management standards are often worse for HMO, and they pose the most significant fire risks to occupants. There is also public concern in some areas not just about the conditions to which HMO residents may be exposed but also about the impact of the residents themselves on the area and its amenities.

According to the Housing Executive some growth of HMO activity has been noted in a number of district towns in Northern Ireland and although this growth is small in terms of the total housing stock, single persons are moving into private rented sector properties in areas such as Dungannon, Omagh and North Down.

5.1.1 Law and Policy

The Committee acknowledges there are difficulties in finding an agreed definition of a House in Multiple Occupation. As currently defined in housing legislation a 'house in multiple occupation' means 'a house which is occupied by persons who do not form a single household'. There is a considerable amount of case law as to what constitutes a 'house' and what constitutes a 'household' for HMO purposes. There have been a number of legal cases about whether the mode of living of particular groups of people sharing a house constitutes a single household or not and doubts still remain over how the definition is applied.

The Committee noted that in England, the law on houses in multiple occupation is provided by the Housing Act 1985, as amended by the Housing Act 1996 which introduced certain new schemes at the discretion of local authorities, however, these have not been taken up. As mentioned above the current legal definition of a HMO is "a house which is occupied by persons who do not form a single household". In Barnes v Sheffield City Council (1995), the Court of Appeal significantly muddled this definition by overlaying it with nine separate non-exhaustive considerations which local authorities were required to take into account in assessing whether a dwelling was an HMO within the statutory definition.

 

    • Whether the persons living in the house came to it as a single group or whether they were independently recruited.

 

    • What facilities are shared.

 

    • Whether the occupants are responsible for the whole house or just their particular rooms.

 

    • Whether individual tenants can lock other tenants out of their rooms.

 

    • Whose responsibility it is to recruit new occupiers when individuals leave.

 

    • Who allocates rooms.

 

    • The size of the property.

 

    • How stable is the group composition.

 

  • Whether the mode of living is communal.

This has led to local authorities restricting the types of property which it will include. For example, many authorities will no longer regard student lettings as HMO. Once a property has been defined as an HMO, the local authority may set up a registration scheme through which it essentially controls the standards in it. Other than this, there is a duty on the person managing the property to keep the premises fit for the number of occupants.

The regulatory systems appear to be broadly similar between Northern Ireland and England. Indeed, recent Consultation Papers issued by the DETR (1999) have been mirrored by similar documents issued by the NIHE (2000). The major difference is that mandatory grant is no longer available in England and the level of use varies from authority to authority.

The Housing Act 1996 gives local authorities in England discretion to adopt registration schemes for HMO making it a duty for houses to be registered for which the scheme applies. There are three types of scheme:

 

    • Simple Notification Scheme: This allows the authority to obtain information about HMO in their area and to enforce standards using the powers available to them. The registration fee is £80 per property.

 

    • Scheme with Control Provisions: Allows the authority to refuse an application if the house is unsuitable and incapable of being made suitable for the number of occupants stated in the application or if the manager is not a fit and proper person. The registration is £60 per habitable room (bedrooms and living rooms).

 

  • Scheme with Special Control Provisions: Allows the authority to refuse to register the property where the house is adversely affecting the amenity or character of the area. The authority can take in the number of HMO in the area in deciding the outcome of the application.

There are now proposals to introduce a mandatory licensing scheme for HMO in England and it is intended that the following will be included:

 

    • A statutory definition of HMO to include shared houses and current student exemptions.

 

    • Each licence will have a named individual licensee who will be a 'fit and proper person'.

 

    • Uniform standards will be set out in legislation which will apply across all local authorities.

 

    • Licensees will contribute to the cost of the scheme.

 

  • There will be more severe penalties for failure to comply.

The Committee noted that in Scotland, local authorities have a wide range of powers available to take action on HMO under existing primary and secondary legislation. The Housing (Scotland) Act 1987 empowers local authorities to control HMO by imposing 'management orders' which apply a code of management set out in regulations obliging landlords to keep the HMO in repair and good order; 'works orders' which can be used to compel works to ensure compliance with the management code; and 'notices' to require other improvements to rectify defects and to require the provision of means of escape from fire and 'notices and directions' to limit or reduce overcrowding.

Local authorities have had discretionary powers since 1991 to establish a licensing scheme for HMO in their area although many have still not introduced a scheme. In 2000 legislation was introduced to implement a mandatory licensing scheme for all HMO properties in Scotland. Under the scheme owners of HMO are required to apply for a licence which can be refused by Councils where there are concerns over factors such as fire safety, physical conditions and bad management standards. Councils also have powers to search properties suspected of operating without a licence and instigate prosecutions in such cases. Only properties owned by local authorities and residential and nursing homes are exempt as they are already subject to an equivalent regulatory scheme. The licensing scheme is being phased in, with a threshold set for licensing those properties with more than five occupants for the first year. This threshold is being reduced each year until properties with more than two occupants will require a licence by 2003.

The Committee noted that in the Republic of Ireland, legislation does not distinguish between HMO and other private rented properties. The main provisions applicable to the private rented sector are contained in the following regulations:

 

    • The Housing (Rent Book) Regulations 1993.

 

    • The Housing (Standards for Rented Houses) Regulations 1993.

 

  • The Housing (Registration of Rented Houses) Regulations, 1996 (and amended in 2000).

In summary these regulations provide for a registration scheme, similar to the Scheme with Control Provisions in England, to be applied by the local authorities. The standards in this scheme, however, are acknowledged to be basic and local authorities have not been active in enforcing statutory regulations.

There is also no grant available for owners to carry out works required to bring properties up to standard. There is, however, a form of tax relief available for new build properties and for providing student accommodation. Tax relief is currently available to both tenants and landlords.

The Private Rented Sector in the Republic of Ireland has traditionally consisted of unfurnished dwellings - which were formally rent controlled - and uncontrolled accommodation, generally furnished. Up to the 1980s legislation in the Republic virtually mirrored legislation in Northern Ireland with regulated, restricted and controlled tenancies.

In July 1999 a Commission on the Private Rented Residential Sector was set up with the following Terms of Reference:-

"To examine the working of the landlord and tenant relationship in respect of residential tenancies in the private rented sector and to make such recommendations, including changes to the law, as the Commission considers proper, equitable and feasible with a view to:

Improving the security of tenure of tenants in the occupation of their dwellings.

Maintaining a fair and reasonable balance between the respective rights and obligations of landlords and existing and future tenants.

Increasing investment in, and the supply of, residential accommodation for renting, including the removal of any identified constraints to the development of the sector."

The Commission reported in July 2000; its and conclusions were as follows:

 

  • Legislation should be introduced within two years to establish a Private Residential Tenancies Board (PRTB) to deal with disputes between landlords and tenants. It will be mandatory for landlords and/or tenants to refer such disputes to the Board. Registration of properties will be to the Board rather than to local authorities although enforcement will continue to be a local authority responsibility.

The Board will have a quasi-judicial role, in that its findings in the event of a dispute can only be appealed to a Court, and even then only on a point of law.

The Board will also provide research, monitoring, policy advice, model leases, good practice guidelines and general advice.

 

    • The legislation will also improve security of tenure for tenants so that, where the tenancy has lasted a minimum of six months, the tenant is entitled to continue in occupation of a dwelling for four years.

 

  • Set rents at no greater than the market rate, with rent reviews no more frequently than once a year. For low income tenants there will be a system of refundable tax credits.

It is also proposed that the facility to write off construction costs or refurbishment costs against rental income for tax purposes should be extended to all types of private rented sector properties.

In Northern Ireland, responsibility for overseeing the management of HMO is in the hands of the NIHE which sets certain standards similar to those in place in England. The same definition of HMO is used, with the same complications. Current NI law in relation to HMO is covered by the Housing (Northern Ireland) Order 1981, the Housing (Northern Ireland) Order 1992 and the Housing (Management of Houses in Multiple Occupation) Regulations (Northern Ireland) 1993.

5.1.2 Regulation of the Private Rented Sector

Concern over the quality of housing in the private rented sector has been growing over recent years. Whilst data exists on unfitness, it is more difficult to assess what has been happening with disrepair, largely due to changing definitions and problems in measuring likely costs of repairs. Homes that are most likely to be affected often belong to those on the lowest incomes like single parents, the unemployed and the elderly. There has been a proven correlation in the past between inadequate housing conditions and poor health.

The statutory standard of unfitness in England, Wales and Northern Ireland is based on a minimum habitable condition as defined in the Local Government and Housing Act 1989 with its detailed implementation set out in the DoE Circular 17/96. Structural stability, freedom from damp, adequate heating, lighting and ventilation, the piped supply of wholesome water and adequate drainage, facilities to prepare and cook food and a WC and bath/shower and hand basin with cold and hot water are all statutory requirements. Failure to meet just one of these criteria, making the property 'not reasonably suitable for occupation', renders it unfit for human habitation and requires the local authority's environmental health officers (EHOs) to use cost benefit analysis to decide on repair, deferred action, closure or demolition.

In Scotland there is the 'below tolerable standard (BTS)' defined in the Housing (Scotland) Act 1987; it closely resembles legislation for the rest of the UK but also requires satisfactory access to all external doors and outbuildings.

Levels of enforcement of the existing fitness standards are low, perhaps because of the problems, both political and for the individual, which can follow the serving of a notice. The DETR is working on a new Housing Health and Safety Rating System (HHSRS). Its underlying principle is that any dwelling should be a safe and healthy environment both for its occupants and visitors, and has identified 24 hazards (compared to nine in the fitness standard); it covers houses, flats and bedsits, including any shared access areas. Legislation is required to enact its provisions but the new system will be employed alongside the fitness standard for the time being.

The current legislation affecting the Private Rented Sector in Northern Ireland dates primarily from 1978, although the history of the sector goes back to the beginning of the 20th Century and, in 1939, about 90% of the housing stock was privately rented. The current make-up of the sector is unique and has not followed developments experienced in other parts of the UK or in the Republic of Ireland.

The private rented sector can be divided into four different market sectors:

5.1.3 Regulated and Restricted Properties

The Rent Register, held by the Department for Social Development for properties controlled under the 1978 Rent Order, recorded, earlier in 2001, a total of 6,498 properties: 6,109 regulated tenancies and 384 restricted tenancies. There is no compulsion for landlords to register their properties.

5.1.4 Uncontrolled Furnished Sector

This component tends to be dominated by young upwardly mobile tenants mainly in the form of HMO. These tenants tend to move into the owner occupied sector in the longer term.

5.1.5 More Expensive Dwellings

There have been a number of city centre and water edge developments as well as apartments in areas like Belfast, Derry/Londonderry, Fermanagh, the North Coast and North Down for the purposes of letting.

5.1.6 Lower Cost New Build and Sold Housing Executive Dwellings

This relies on lower cost new dwellings and Housing Executive Right to Buy properties being bought as an investment. These dwellings are providing for a group which would normally have been housed in the social rented sector.

The Rent (Northern Ireland) Order 1978 applies to older properties in the lower end of the private rented sector, with the aim of ensuring that rents reflect house conditions and that tenants have a considerable security of tenure. The DSD is responsible for setting rents for controlled regulated tenancies, for maintaining a register of these rents and for reviewing these rents as appropriate. The Rent Order also defines the role of the Rent Officer who is confined to assessing rents on controlled regulated tenancies when these are the subject of appeal by either tenant or landlord. District Councils have powers to investigate cases of harassment or illegal eviction or to deal with issues of disrepair. Environmental Health Departments can issue Certificates of Disrepair on Regulated Tenancies, or Public Health notices on all types of tenancies. The Northern Ireland Housing Executive's responsibilities lie in the administration of housing benefit and the private sector grants schemes.

The most notable effect of the subsequent Housing (NI) Order 1983 was to introduce shorthold tenancies, to extend rent regulation to certain unregistered housing associations and to modify the regulated tenancy standard. The regulated standards have again been revised in the 1992 Housing Order and now correspond to the NIHE fitness standard.

The Social Development Committee understands that there may be provisions in the proposed Housing Bill in Northern Ireland to transfer the Department's responsibilities for the Rent Register to the NIHE.

5.2 Consultation on Houses in Multiple Occupation and the Regulation of the Private Rented Sector

Responses were received from 25 organisations. One of the major concerns expressed was the lack of clarity of definition of what is a HMO (see also 4.2). This of course has been a problem in the legislation in England and some responses called for the introduction of the DETR proposed definition in their consultation paper 'Licensing of Houses in Multiple Occupation - England'. There was particular concern that houses occupied by students were, in many cases, excluded from the definition.

Another major concern was the lack of a landlord registration system and many responses called for the introduction of a mandatory licensing scheme as they felt that the proposed voluntary scheme to be introduced by the NIHE will not go far enough. Some Councils called for the regulatory role of HMOs to be placed with District Councils rather than the NIHE. It was suggested that District Councils are, in many respects, better placed to fulfil the role of regulator of housing standards than the NIHE due to their greater accessibility, democratic accountability and their independence from owners of the property. Councils have wide ranging and extensive enforcement and regulation experience and therefore are well placed to regulate and enforce housing standards including the assessment of unfitness.

It was suggested that applicants for a licensing scheme should be compelled to sign up to an independent ombudsman service as a condition of receiving a license. Properties should also be inspected before a license is issued although different arrangements may be appropriate for larger numbers of properties. There was a call for inspections of properties once they become vacant as well as random inspections. Basic training should also be introduced as a requirement for a license being issued as suggested in the DETR consultation document on mandatory licensing.

Some responses called for selective licensing as there was concern that powers should not be used to reduce the provision of HMO. Many organisations were in favour of licensing the whole of the Private Rented Sector although a light regulatory system might be more appropriate for those parts of the sector that pose the least risks to residents. It was suggested that any Licensing Authority and any Review panel should be widely representative of the community and include representatives of local Councils. Any inspecting body, however, should be independent of the Licensing Authority.

There was a call for the linking of housing benefit payments to housing standards. A 'Certificate of Market Rent', setting the maximum rent on which to pay housing benefit, should be issued with the granting of a licence. Many organisations also called for an accreditation system and one suggestion stated that something equivalent to a 'star' system should be introduced so that people would know the standard of accommodation and the standard of management they could expect. This could be linked to the amount of housing benefit paid and the level of rent charged.

There was a general welcome that the Rent Register should be transferred from the DSD to the NIHE. There was also a general consensus that the 1978 Rent Order should be reviewed and updated given its cumbersome nature; this work is currently underway.

5.3 Principal Recommendation Houses in Multiple Occupation (HMO) and on Regulation
of the Private Rented Sector (PRS)

The Social Development Committee considers that there should be a transfer of responsibility for this function from the Department of Social Development to the Northern Ireland Housing Executive and that the Housing Executive should be responsible for introducing and operating a licensing scheme.

This would recognise the value of local knowledge for successful interventions in this small, but increasingly dynamic, sector in which many vulnerable tenants are located.

The Committee acknowledges the need for regulation of the sector but contends that regulation must not force people from investing in it. Houses in Multiple Occupation play a vital role in the housing market by providing affordable, flexible accommodation, in areas of high demand where rents are high. In the light of the growing numbers of single person households and changing lifestyle patterns, demand for single person housing is expected to grow in Northern Ireland and Houses in Multiple Occupation will therefore remain a significant feature of the housing market for the foreseeable future. The Committee supports the view that standards of accommodation and housing management are set and that a licensing scheme should be introduced to benefit both the demand side and the supply side of this sector.

5.4 Some Further Ideas to be Considered in Relation to Houses in Multiple Occupation
and the Regulation of the Private Rented Sector

 

    • The transfer of responsibility from the Department to the Housing Executive for the Rent Register makes sense as the NIHE is responsible for regulating HMO. This is a small but significant and increasingly dynamic sector where successful interventions require local knowledge.

 

    • It is important to recognise how far Northern Ireland has to bolt on to English legislation rather than introduce new legislation to suit local conditions which are different to the rest of the UK.

 

    • A voluntary licensing scheme should go ahead with the view to following this with a mandatory licence scheme once proper research has been carried out. This should be administered by the NIHE.

 

    • The review of the 1978 Rent Order is welcomed as it is cumbersome and extremely outdated. New legislation should consider the setting up of a Tenancies Board similar to that in the Republic of Ireland which can deal with disputes in a similar fashion. The Northern Ireland Housing Executive may be best placed to perform this role.

 

    • It is important to evaluate the benefits and costs of introducing regulation to either the HMO end of the private rented sector or the PRS as a whole. It is important to ensure that landlords and investors are not discouraged out of the sector by disproportionate regulation.

 

    • Many of the issues could be addressed by the introduction of a grading system such as awarding 'stars' depending on the quality of the accommodation and the standard of service. This would produce a sound basis for registration and provide the tenant with a statement of what they can expect within each category. A differential fee structure could be introduced depending on the standard offered to pay for the administration of the scheme. There would be an incentive for landlords to pay higher fees for higher quality accommodation.

 

    • Housing benefit would be a useful tool for identifying those landlords who are not participating, as lower standards tend to be associated with this group.

 

    • Enforcement powers should be increased to include poor standards of management.

 

    • The legislation needs to include powers for anti social behaviour and overcrowding in the sector.

 

  • A proper definition for HMO should be introduced in Northern Ireland so that the sector can be properly regulated.

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6.0 RIGHT TO BUY (RTB) FOR HOUSING ASSOCIATION TENANTS

6.1 Background

In Northern Ireland the Housing Executive introduced a Voluntary House Sales Scheme in 1979 and although the formal Right to Buy (RTB) scheme was introduced under the Housing (NI) Order 1983, all sales to tenants of the Housing Executive were completed under the voluntary scheme as opposed to the formal RTB legislation. Both schemes continued to be available to NIHE tenants until the early 1990s when the Housing (NI) Order 1992 replaced the RTB with a provision that the Executive shall prepare a scheme for the sale of houses to secure tenants and submit this to the Department for approval.

In 1996 the Housing Policy Review for Northern Ireland advocated the notion of a single set of rights for tenants to replace the existing uneven arrangements across the social rented sector. In 1998 the then DOE for Northern Ireland issued a housing association circular setting out the terms of the voluntary sales scheme. A Voluntary Purchase Grant was introduced which was payable by the Department to the Association which would compensate the housing association to the full extent of the tenant's discount, and any Housing Association Grant (HAG) which was previously paid was not recouped. Registered Associations have an element of discretion over which properties they decide to sell. Up until April 2000, 214 housing association dwellings have been sold to sitting tenants whilst a total of 91,541 dwellings had been sold by the NIHE under the RTB.

6.1.1 Concerns and Questions

Right To Buy involves two important aspects of tenant/individual well being. It gives the statutory right to purchase the current home from the landlord and this may be a valuable right should the tenant wish to change tenure and not move from the existing dwelling even if there was no discount available. Many people who aspire to owner occupation might not wish to leave their dwelling in order to do so, particularly those who have been living in the community for a number of years. It also gives substantial discounts so that a change of tenure via RTB may imply changes in both the level and form of housing subsidy received.

6.1.2 Why Do We Have Right To Buy?

Right To Buy was introduced to Northern Ireland in line with similar policies introduced in GB. At that time local authorities had been pursuing the policy on a voluntary basis throughout the 1970s because they were concerned that tenants doing well and on the threshold of home ownership would either leave estates or move to the suburbs as they could not buy the house they were in. They were already recognising that in some localised places there was not enough home-ownership to mesh with local market requirements and, for them, selling council houses was a local strategy tool. From an ideological perspective the government pursued the policy in its drive to increase owner occupation as the preferred tenure and to reduce the domination of 'council housing'.

RTB as a policy instrument has been criticised, however, in that it had no area or community rationale and it was a consumer specific policy. There was no real concern in policy circles as to its possible area effects and no attempt had been made to integrate RTB into the framework for the local delivery of policy (such as the setting of area investment priorities). As a result RTB has failed to cohere properly with emerging regeneration policies and approaches. RTB to date can be seen to have been operating in isolation from other policy instruments and in particular cases possibly at variance to them.

6.2 Consultations on Right to Buy for Housing Associations

The NIHE is of the general opinion that similar rights should exist for all social housing tenants in Northern Ireland in whatever form it may take. It believes that arguments against the principles of RTB for housing associations are difficult to sustain. Whilst it acknowledges that the housing association movement has reservations about RTB it would be difficult to allow exemptions over and above those that apply to NIHE sales particularly in those small associations where house sales may threaten their viability. There is a view that the number of housing associations in NI is too large in any event and that some consolidation would assist financial and housing management, and the achievement of performance standards. Consolidation could reduce the impact of exemption from RTB on the basis of size.

The Council for Mortgage Lenders supports the RTB for Housing Executive properties that has contributed to Northern Ireland having the highest rate of owner occupation in the UK at 71.9%. The extension of the RTB to housing associations does raise concerns in that receipts from sales could be insufficient to meet housing associations debts and growing organisations could be transformed into shrinking bodies with poor morale and lack of forward vision. The extension of Voluntary Purchase Grant (VPG) with the RTB may have long term implications as it may be expensive if NIHE levels of discounts offered create high demand for properties. It might force a rethink on the levels of discounts available and the government might be forced to cut VPG at a later date.

The Chartered Institute of Housing recommends the ending of the obligation of the NIHE to sell under the RTB and instead to allow policies for both the Housing Executive and housing associations sales of existing and new dwellings to be decided according to local strategies. Discounts should be determined locally and be subject to a national monetary cap and all social landlords should retain all future RTB receipts for housing purposes. Quota selling should be introduced to preserve certain percentages of particular types of stock. There should be tighter rules on eligibility and exemptions in rural settlements of less than 5,000 population. The financial viability of existing associations should be ensured through exemptions from the scheme for a number of years. Transferable discounts should also be introduced in areas of high demand and the organisation argues that it is inequitable that some tenants paying the same rents for the same types of properties can receive substantially different values for their discounts.

The NI Federation of Housing Associations calls for a new sales policy to, on the one hand meet housing need, but on the other hand, retain sufficient stock for those who cannot, or do not want to, become owner occupiers. A sales scheme should not compromise the financial viability of housing associations nor put the repayment of private loans at risk. The Federation criticises the current scheme for failing to take into account the shortage of housing in high demand areas and abuses in the scheme exacerbated by the very rate of discounts whereby larger discounts are awarded to tenants living in high value areas than those living in low value areas. It also questions the value for money the current scheme gives to the taxpayer.

The NI Tenants Action Project argues that any policy should not limit the rights of tenants nor should it damage the long term viability of the voluntary housing movement. There is a concern that associations will lose their best stock and face a declining asset base. The organisation is also concerned that smaller associations may have to diversify their interests or face being swallowed up by stronger or better resourced associations.

Finally the NI Co-ownership Housing Association (NICHA) believes that there are adequate home buyer initiatives already in place and extending the RTB to housing associations could have implications for the future supply of rented houses particularly in urban areas.

6.3 Principal Recommendation on the Right to Buy for Housing Association Tenants

Whilst the extension of the statutory right to buy to housing association tenants should proceed at this stage, the Committee considers that a complete review of the scheme should be initiated along the lines suggested by the Chartered Institute of Housing.

The Social Development Committee supports the arguments for equality of treatment for all tenants in the social sector; however it is clear that with differential markets some tenants can expect to do much better than others and often at the expense of prospective tenants. Whilst the extension of the statutory right to buy to housing association tenants should proceed at this stage the Committee considers that a complete review of the scheme should be initiated along the lines suggested by the Chartered Institute of Housing. It is one thing to promote self-help but being over generous with discounts could inhibit the ability to cope with rising housing need in some areas. It is important, however, not to have differentials on how individuals are treated in the scheme and there should be one rule for all social housing tenants.

6.4 Some Further Ideas to be Considered in Relation to the Right to Buy for
Housing Association Tenants

 

    • It is imperative that the same scheme is in place for all social landlords with the same eligibility and exemptions criteria. Whilst there might be very good reasons for excluding some social housing properties from the RTB, to exercise such a discretion would have to be publicly defended.

 

    • RTB is effective in generating receipts for new capital investment, providing for social stability, allowing an entry point into owner occupation and creating mixed tenures.

 

    • It is important to consider what the taxpayer would perceive as an adequate subsidy for social housing. Tenants should not receive a greater subsidy by exercising the RTB than by remaining in the rented sector. Studies in the past have shown that many council tenants had rents of about 35 - 40 per cent less than market values but received 50 per cent plus discounts on the properties they bought via the RTB.

 

    • By giving tenants the value of their discount to move to another area, if they live in a high demand area, might contribute to destabilising communities, where people have lived in the property for a long time. In any case the tenant may not want to move to another area and may wish to exercise their RTB of the house they live in. To compel them to move could be perceived as discriminatory.

 

    • Similarly by not allowing the RTB to be exercised in certain geographical areas may also be perceived as discriminatory particularly to those living in small rural settlements.

 

    • There must be a single set of rights that cannot be differentiated by different types of social landlord.

 

    • The RTB should be attached to the tenant only and no-one else. Current experience demonstrates that properties are being bought by people other than the tenant and are then being used for private rented purposes.

 

  • Tenants should earn the RTB. For example, there should be a requirement that the tenant had lived in the area for a specific amount of time.

It is important that a fair and equitable scheme is introduced for all social landlords and that the amount of subsidy given is no greater than had the tenant stayed in public sector accommodation. It may be that portable discounts could be introduced as an option for those who may want to move to another area for owner occupation but they must also have the option of buying their own home if they wish.

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7.0 LARGE SCALE VOLUNTARY TRANSFERS AND THE ROLE OF THE
NORTHERN IRELAND HOUSING EXECUTIVE

7.1 Background

"Large Scale Voluntary Transfer" (LSVT) is the disposal of local authority housing stock to an existing or new registered Social Landlord - in effect to a landlord who will be subject to regulation.

Current legislation already permits the transfer of social housing stock in Northern Ireland, subject to the agreement of all tenants affected by the transfer. The Social Development Committee understands that the Department for Social Development proposes to legislate to remove a single tenant veto and instead make provision for any transfer to be subject to the agreement of the majority of tenants. This will bring Northern Ireland law into line with the rest of the United Kingdom.

LSVT was initially introduced in Great Britain as a means of attracting private investment to address a £22bn housing repairs backlog. This form of private investment does not impact on government borrowing. More recently Government has set LSVT in the context of:

 

    • The need for local authorities to concentrate on their strategic role by withdrawing from their operational role.

 

    • Offering greater opportunities for tenant involvement.

 

  • Creating a more diverse range of providers.

Government has created a funding pool to finance the LSVT programme. This was essential because some local authority stock has a negative value (the loan debt is greater than the value of the stock). To be admitted to the transfer programme key selection criteria have been set by Government. These cover:

 

    • Evidence of support amongst tenants for the proposed transfer.

 

    • Whether the proposal is a coherent part of the local authority housing strategy.

 

    • Whether the transfer provides value for money.

 

  • Whether it will deliver better services for tenants and greater participation by tenants.

In order to submit an LSVT proposal for inclusion in the programme, a local authority must provide:

 

    • Rationale for disposal.

 

    • Calculation of public expenditure costs.

 

    • Details of repair/improvement costs over 30 years.

 

    • Existing debt and redemption premia.

 

    • Transfer price.

 

    • Confirmation that rents will conform to government proposals for the future direction of social housing rents.

 

  • Proposed transfer structure (limited each new landlord to 12,000 units maximum).

Where an overhanging debt would remain, the local authority would seek Government funding through a one-off grant.

Where the receipt from a disposal is greater than the outstanding loan debt, a levy (20%) is payable to the Treasury by the local authority.

Some 400,000 properties have been transferred under LSVT since 1998. The annual transfer programme has been set at 200,000 units against a total local authority stock of over 3 million.

7.1.1 What other approaches are available?

Government has acknowledged that "even at an enhanced rate of stock transfer, the amount of housing remaining in local authority ownership will be significant for many years".

The housing policy statement within the green paper "Quality and Choice: a Decent Home for All" points to a range of options apart from transfer which local authorities may use for future investment in their stock;

 

    • Continued direct management by the authority using additional resources (capital investment in housing has doubled since 1998).

 

    • The Private Finance Initiative to bring in private resources to improve particular sections of stock.

 

  • Arms length arrangements under which an authority separates its function as a housing landlord from its strategic role.

In addition some local authorities are investigating the prospect of borrowing against their rental stream (securitisation model) but this has not received DETR approval.

7.1.2 What are the main features of arms length arrangements?

An arms length arrangement means setting up a company (limited by guarantee) controlled by the local authority, to perform its landlord function. In effect the stock remains in the ownership of the local authority, tenants remain secure tenants of the Local Authority and retain the right to buy their property. Provided the company receives a "very good" rating by the Housing Inspectorate it may submit a bid for additional resources.

Government has set up a special fund for such companies that would provide an average £500 per dwelling that could support borrowing of some £5000 per dwelling. The borrowing counts for capital control purposes. In addition capital receipts from disposals would be available to it.

While it is a matter for authorities to determine which functions to delegate to the company, Government guidelines suggest local authorities should retain responsibility for homelessness, housing benefit and some other services which are considered strategic.

7.1.3 What do other Regional Assemblies propose?

The Welsh Assembly has approved "A Framework for a National Housing Strategy for Wales". The framework does not promote a specific option to deal with the £1bn backlog in repairs. Instead it states 'all methods of securing additional investment in local authority housing from private finance sources consistent with current Public Sector Borrowing Requirement rules are being considered'.

In Scotland, between 1997 and 2001, net public sector expenditure on housing increased by 40%. At the same time the Assembly's Housing Green Paper has promoted "community ownership". Community ownership would normally result from the transfer of existing public sector rented housing to alternative community landlords under arrangements which ensure that:-

 

    • Housing is owned by a non-profit making body on which there is tenant, local authority and community representation.

 

    • Effective tenant involvement in key decisions.

 

    • Housing is let at affordable rents.

 

  • There are guarantees for transferring tenants.

Around 50,000 properties have been transferred and some local authorities, Glasgow in particular, are currently pursuing the " community ownership" model.

7.1.4 What are key issues for Northern Ireland?

The "tests" for various options including the status quo relate to:-

 

  • Separation of the "Strategic" from the "Operational" role

Since social housing stock is managed by the NIHE as opposed to each local authority, the requirement for this separation could be questioned, particularly given the relative scale of Northern Ireland. In addition it could be argued that the mixed strategic/operational role in Northern Ireland has been successful.

 

  • Greater tenant empowerment/involvement

The Board of the Housing Executive provides various forms of representation although it is acknowledged that there is no statutory form of tenant representation. In addition the tenant involvement framework and compacts provide for direct involvement at operational and policy level by tenants (and indeed other residents). Such involvement and participation is also extensive in urban renewal areas and in those neighbourhoods that are subject to estate strategy.

 

  • Tenant willingness to transfer to other landlords

The limited research carried out by the Housing Executive suggests that tenants are satisfied with the Housing Executive as landlord and it may be difficult to secure agreement to transfer.

 

  • Better Service for tenants

Existing benchmarks against other housing authorities have shown the Housing Executive to offer highly cost effective services, although with room for improvement. Whether or not alternative structures would provide better services must be seriously questioned particularly since under each of the options, the statutory responsibility for some services would remain with the Housing Executive.

 

  • Smaller scale landlords

While a case can be made for landlords with limited housing stock (say 12,000) this must be set against the resultant fragmentation of services, complications and confusion in seeking to "join up" services and higher overhead costs. In addition it is noteworthy that amalgamations among smaller Housing Association landlords in England is becoming more common in order to effect economies of scale. The "purchasing power" of larger authorities would therefore be lost under a fragmented arrangement.

 

  • Securing additional finance

There is no doubt this is a key driver for those local authorities with massive improvement and repair backlogs. While backlogs exist in Northern Ireland, continued investment has maintained them at a relatively lower level. Indeed it could be argued that backlogs exist because significant housing funds have been diverted into other strategic non-landlords priorities, not least 'urban renewal' and 'care in the community'. In its broadest sense therefore existing investment is contributing to a wider agenda in Northern Ireland. Nevertheless the requirement to seek additional finance from whatever source remains.

7.2 Consultation on Large Scale Voluntary Transfers and the Role of the Housing Executive

A number of common themes have emerged alongside a number of conflicting responses. The overriding objective was the need to secure the necessary funding to maintain the existing stock in the social housing sector and to ensure that adequate new housing is provided to meets the needs of the Northern Ireland population.

Many of the responses provided a comprehensive background to what has been happening in GB and what other approaches may be available. It would be appropriate to discuss the various responses under the following headings.

Separation of the "Strategic" from the "Operational" role of the NIHE

The NIHE point out that arrangements are different in Northern Ireland than elsewhere in the UK in that local authorities in Northern Ireland do not manage social housing. This requirement could therefore be questioned particularly given the scale of operations throughout the region. The mixed strategic/operational role has been successful in the past.

The Council for Mortgage Lenders (CML) also points to the fact that Northern Ireland is different to elsewhere in the UK and that this must be taken into consideration. The NIHE, rather than Local Authorities, owns all non-housing association social housing properties and it has a good track record as a housing provider. The CML is concerned that a change to the status of the NIHE might raise serious questions as to the accountability of the NIHE and its ability to carry out its strategic functions.

The NI Federation of Housing Associations (NIFHA), however, argues that this strategic role should be transferred to the Department for Social Development leaving the NIHE to concentrate on its role of landlord, enabler of housing developments by others, provider of grants to the private sector and as an energy conservation authority, and as an agent for the administration of vital public services including Housing Benefit and the proposed Supporting People Fund.

The Northern Ireland Tenants Action Project (NITAP) sees the benefit of separating the regulatory function of social housing from the delivery mechanism. It also believes that LSVT might pave the way for greater tenant involvement and control through the creation of management and other co-operatives where neighbourhood services are effectively managed by the people who live there.

Transfer of stock to alternative landlords and attracting private finance

The Housing Executive seriously question whether or not the setting up of alternative structures would provide better services particularly given that the statutory responsibility of some services would remain with the Housing Executive under each of the options put forward. The organisation argues that existing benchmarks against other housing authorities have shown that the Executive offers highly cost effective services, although there is room for improvement. Whilst a case can be made for landlords with limited stock this must be set against the resultant fragmentation of services, complications and confusion in seeking to 'join up services' and higher overhead costs. It is becoming more common in England for amalgamations of smaller housing associations in order to effect economies of scale and the 'purchasing power' of larger authorities would be lost under a fragmented arrangement.

The Chartered Institute of Housing developed a number of models that exist in GB including the creation of a Public Corporation with more borrowing freedom, the creation of a "big" housing association, the creation of a number of smaller housing associations, the setting up of arms length companies or a mixed strategy which could include competition.

The Council for Mortgage Lenders (CML) argues that LSVTs have a number of advantages including the levering of private finance to undertake much needed improvements, circumventing the Public Sector Borrowing Requirement (PSBR) and supplementing inadequate public investment. Transfers can mean that public money is protected within a not for profit, regulated sector. Tenant participation is maximised with a typical Registered Social Landlord (RSL) having one-third tenant representation on their management boards. Local Authorities also have board representation which maintains local accountability and allows the organisation to be locally focussed. The CML argues that there are fewer immediate reasons for introducing private finance to Northern Ireland than there are in the rest of the UK but there are reasons to open up access to private finance in the longer term. The organisation argues that, in the absence of an appropriate alternative model, serious consideration should be given to LSVT as a means to securing the longer term future of social housing in Northern Ireland.

The NI Federation of Housing Associations considers that it is right to transfer NIHE stock to socially motivated bodies whose borrowing falls outside of PSBR rules. This would release very large sums of money from the Assembly's budget for re-investment in other areas of housing policy and/or programmes contributing to social well-being. It would offer more choice for tenants and enable NIHE tenants to get their homes upgraded earlier than would otherwise be the case, whilst not disadvantaging other tenants. It could open up new or enhanced opportunities to support community development, tenant involvement and neighbourhood regeneration.

NITAP recognises the advantages of transferring stock to alternative organisations in that it enables public funding to be extended by accessing private finance. It also believes that alternative providers will respond more directly to the needs of tenants. It lists many disadvantages including the possibility that alternative landlords may not have the capacity to deliver the landlord function as effectively as the NIHE. It commends the NIHE for the way it has delivered services uniformly throughout the region and the way it has brought the customer closer to decisions through consumer panels. It argues that the housing market may become less accountable, and accessible and tenants rights may be affected by transfer. As associations grow, the experience of smaller associations may be lost and there is a danger that the best stock will be transferred, leaving a residual public stock, marginalized and facing further under-investment.

Northern Ireland Co-ownership Housing Association (NIHCA) argues that any options for LSVT should not adversely impact on established performance standards for social housing management, mechanisms for control and accountability, policy and programme delivery and the relative situations of individual tenants.

7.3 Impact of LSVT on the Role of the Housing Executive

It is the view of the Social Development Committee that the future role of the Executive will be influenced by a variety of factors other than LSVT. These include:-

 

    • The best way of funding investment needs.

 

    • The proposed review of public administration.

 

  • The emergence of a political view about its future role.

However it is clear that there are key functions/activities which are required to be delivered within the housing system in Northern Ireland. These are:-

Strategic Role

 

    • Housing research

 

    • Housing standards

 

    • Lettings scheme

 

    • Housing plans

 

    • Area/local strategies

 

    • Home energy conservation

 

    • Housing regeneration strategy

 

    • Housing Benefit system

 

    • Homelessness

 

  • "Supporting People" strategy

Investment Role

 

    • Investment planning (including newbuild)

 

    • Setting investment priorities

 

  • Programme plans and management (including newbuild)

Regulation Role

 

    • Private rented

 

    • Housing Associations

 

    • Social renting

 

    • Performance standards

 

    • Inspection

 

  • Performance reporting

Provider Role

 

    • Newbuild

 

    • Landlord role

 

  • Programme delivery

7.4 Conclusion

In conclusion therefore LSVT is one model, amongst others, which have emerged since 1995 in GB. It is clear that in both England and in the devolved administrations in Wales and Scotland, other models are being pursued. The conditions that exist in Great Britain in terms of substantial investment backlogs do not exist in Northern Ireland where the social rented stock is in relatively good condition. However there is a backlog but more importantly there is a need for continued reinvestment in stock. Whether or not this can be funded from within public sector resources will be a key determinant of the best model.

The Social Development Committee notes the submission of the NIHE and is inclined to agree that the existence of a strong single strategic housing authority for the Region brings many strengths, economies of scale and accountability, which could be easily lost in the fragmented structures which LSVT could produce. It is also becoming apparent that the challenge of tackling urban regeneration and neighbourhood renewal and the mix of public and private investment required would be difficult to achieve in the type of fragmented structure that might arise from LSVT.

7.5 Principal Recommendation on Large Scale Voluntary Transfers and the Role of the
Housing Executive

The Social Development Committee believes that there is a need for a body to take a strategic role in relation to housing provision in Northern Ireland. The Committee recommends that the Northern Ireland Housing Executive should have an enhanced strategic role and that the proposed Housing Bill should address the conflict between such a role and the part the Housing Executive plays as the largest social landlord in Northern Ireland.

7.6 Some Ideas for Further Consideration in Relation to Large Scale Voluntary Transfers and the
Role of the Housing Executive

The Department should confine itself to policy making and financial control. Those areas where local market conditions have to be assessed should be left to the Housing Executive. The Housing Executive should continue to commission and carry out research, be involved in the development of District Plans, and more comprehensively the regulation and scrutiny of other housing providers. The Housing Executive has the experience and staff to do so and this is not currently available to the Department.

The Housing Executive's function as a social landlord is not likely to be readily taken up by others.

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Minutes of Proceedings
Relating to the Report

THURSDAY, 11 JANUARY 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Sir John Gorman
Mr B Hutchinson
Mr D McClarty
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Mr G Kelly
Mr D O'Connor
Mr E ONeill

In Attendance: Mr G Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

5. Future Work Programme

(i) The Committee agreed to invite Departmental officials to the next meeting to provide a broad outline of the content of the proposed Housing Bill to assist the Committee to make an informed decision on suitable topics for inclusion in the work programme.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 18 JANUARY 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr D McClarty
Mr D O'Connor
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr G Kelly

In Attendance: Mr G Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

2. Matters Arising

(i) At last week's meeting the Committee agreed to ask officials to attend to-day's meeting to provide a broad outline of the content of the Housing Bill. The Minister has written to say that there are difficulties regarding the Housing Bill and it is felt that officials would not be able to add to the Committee's understanding of the present position and they will not be attending.

Public session

5. Forthcoming Housing Bill

(i) Sir John Gorman wished to outline some of his observations regarding the future of housing in Northern Ireland;

 

    • radical and unique success of Housing Policy since 1972

 

    • need to attract Private Finance

 

    • link housing operationally to regeneration

 

    • reduce Department costs

 

  • need to have an organisation with flexibility capable of diversifying.

To achieve the above Sir John felt that one approach would be to transfer assets to a new body which could be called, for example, the Northern Ireland Housing and Regeneration Trust. A Trust board would be set up which would consist of politicians, tenants and independent people of competence. The Trust would be operationally independent but would be controlled by the Minister and Committee for Social Development. This new body would be able to obtain private finance, and by delegation, assess need and homelessness and housing benefit.

The NIHE would retain responsibility for policy on compulsory requisition, grants and energy conservation which help contain Departmental running costs, reduces legal costs and regulates performance of landlords (private Housing Associations).

(ii) The Committee considered the Ministers written response of 17 January regarding the forthcoming Housing Bill and agreed to ask Departmental officials to attend next week's meeting to explain the policy intentions behind the following legislative proposals;

 

    • Houses in Multiple Occupation

 

    • Regulation of the Private Rented Sector

 

    • Private Sector Renewal

 

    • Housing Association Tenants

 

    • Homelessness

 

    • Anti-social Behaviour

 

  • Large Scale Voluntary Transfers.

The Committee further agreed that following the explanation from Departmental officials the Committee would select topics and set terms of reference for inclusion in the future work programme.

MR F COBAIN
COMMITTEE CHAIRMAN

 

[Extract]

THURSDAY, 25 JANUARY 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Sir John Gorman
Mr G Kelly
Mr D McClarty
Mr D O'Connor

In Attendance: Mr G Martin
Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.14 p.m.

Private Session

6. Proposed Housing Bill

The Chairman welcomed the officials to the meeting at 3.09pm.

DSD officials: Mr David Crothers
Mr George Davidson

The discussions are recorded separately in verbatim minutes of evidence.

The Chairman thanked the officials and they left at 3.50 p.m.

Private Session

Following discussions with the researchers and the explanation from the officials of the policy intentions behind the following legislative proposals the Committee agreed to investigate;

 

    • Private Sector Renewal

 

    • Houses in Multiple Occupation and the Regulation of the Private Rented Sector

 

    • Large Scale Voluntary Transfers

 

    • Housing Association Tenants - right to buy

 

    • Anti-social Behaviour

 

  • Homelessness

The Committee further agreed that the Clerk and the researchers should agree draft Terms of Reference for the Committee to consider at next week's meeting.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 1 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr M Robinson
Mr J Tierney

Apologies: Mr D O'Connor
Mr E ONeill

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.11 p.m.

Private Session

8. Draft Terms of Reference and Timetable for Housing Inquiry

The Committee noted the contents of a paper, tabled by the Clerk, which included a draft timetable. The Committee agreed that consideration should be given to inviting an academic to assist in carrying out the necessary work and further agreed that the Clerk should investigate how best to take the matter forward. Mr J Tierney suggested that the Committee include 'disability' as an additional topic in their inquiry into Housing in Northern Ireland. The Committee agreed that the inquiry should proceed into the original six topics as previously agreed and that consideration could be given to including 'disability' at a later date.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 15 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr G Kelly
Mr D O'Connor

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.08 p.m.

Private Session

2. Matters Arising

The Committee agreed to consider Housing as agenda item 6.

6. Housing - Draft Terms of Reference & Timetable

The Committee noted that the Clerk is continuing to discuss with the Research Department the practical arrangements to progress this investigation. The Committee agreed that Terms of Reference in respect of topics 3 and 4 i.e. 'Large Scale Voluntary Transfers and the NIHE' and 'Rights of Housing Association Tenants to Buy Their Properties' and a timetable for the completion of the investigation in respect of topics 1 to 4 should be tabled by the Clerk at next week's meeting.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 22 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr D O'Connor
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr G Kelly

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.05 p.m.

Private Session

6. Housing - Draft Terms of Reference & Timetable

The Committee noted the paper tabled by the Clerk. The Committee agreed that;

 

    • Private Sector Renewal,

 

    • Houses in Multiple Occupation & the Regulation of the Private Rented Sector,

 

    • Large Scale Voluntary Transfers and the NIHE, and

 

  • Rights of Housing Association Tenants to Buy Their Properties

should be the subject of a single report and the Committee would conduct two further and separate inquiries into 'Anti-Social Behaviour' and 'Homelessness'.

The Committee further agreed the timetable for the completion of this report, the narrow Terms of Reference for items 3 and 4 and in the interests of keeping to the timetable that, rather than going for formal public consultation letters to selected organisations will issue on 26 March with a deadline of 20 April for replies.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 29 March 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Sir John Gorman
Mr G Kelly
Mr M Robinson
Mr S Wilson

Apologies: Mr T Hamilton
Mr B Hutchinson
Mr E ONeill
Mr J Tierney

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.20 p.m.

Private Session

6. Housing - Private Sector Renewal and Houses in Multiple Occupation
(Regulation of the Private Rented Sector)

In attendance: Eileen Regan (Senior Researcher)
Malachy Finnegan (Researcher)

The Chairman welcomed the Researchers to the meeting at 4.00 p.m. after which Eileen Regan made a presentation. A summary of the presentation was circulated to the Members. After discussion the Committee agreed to consider the Research papers further at its next meeting, on Tuesday 3 April, if necessary, and the Researchers were asked to be in attendance. The Chairman thanked the Researchers and they left at 4.15 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 5 April 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms Michelle Gildernew (Deputy Chairperson)
Sir John Gorman

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.20 p.m.

Private Session

5. Housing

(i) Private Sector Renewal and Houses in Multiple Occupation and the Regulation of the Private Rented Sector

In attendance: Eileen Regan (Senior Researcher)
Malachy Finnegan (Researcher)

The Chairman welcomed the Researchers to the meeting at 3.30 p.m. Following the presentation of background research papers by Eileen Regan last week in relation to Private Sector Renewal, Malachy Finnegan made a presentation of background research papers in relation to Houses in Multiple Occupation and the Regulation of the Private Rented Sector. A summary of the presentation was circulated to the Members. After discussion the Committee agreed to note the content of the research background papers and agreed that the Clerk should investigate how the Committee can consider further if proposals in relation to Houses of Multiple Occupation will impact on planning law.

The Chairman thanked the Researchers and they left at 4.15 p.m.

(ii) Consideration and selection of an Academic

The Committee considered the list of Academics provided by Research and Library Services. The Committee expressed concern that there was no Assembly process or current guidelines in existence in relation to the selection process and agreed that the Clerk should write to the Commission in those terms. In these circumstances the Committee, taking into account the time frame for its Report, considered the information supplied by the Academics, paying particular attention to applicants on the basis of experience, cost, availability and local knowledge.

It was proposed by Mr E ONeill and seconded by Mr B Hutchinson that Mr Paddy Gray be appointed. This was unanimously agreed by the Committee.

(iii) Consider list of witnesses to give oral evidence

The Committee considered the list of respondees in relation to Private Sector Renewal and Houses in Multiple Occupation and the Regulation of the Private Rented Sector (Topics 1 & 2) and the selected organisations in relation to Large Scale Voluntary Transfers and the NIHE and Rights of Housing Association Tenants to Buy Their Properties (Topics 3 & 4). The Committee agreed to invite the following organisations to give oral evidence on the following;

Topics 1 & 2

Chartered Institute of Environmental Health

National Union of Students (UK) and the Union of Students in Ireland

Topics 3 & 4

Northern Ireland Tenants Action Project

Housing Rights Service

Northern Ireland Co-Ownership Housing Association Limited

Council of Mortgage Lenders

Topics 1, 2, 3 & 4

Chartered Institute of Housing In Northern Ireland

The Northern Ireland Federation of Housing Associations

Northern Ireland Housing Executive.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

THURSDAY, 26 April 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr G Kelly
Mr D O'Connor
Mr E ONeill

Apologies: Ms Michelle Gildernew (Deputy Chairperson)
Mr M Robinson
Mr J Tierney

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

Private Session

5. Housing Inquiry

The Committee noted the research papers tabled in relation to Large Scale Voluntary Transfers and the NIHE and the Rights of Housing Association Tenants to Buy their own Properties and that the Researchers would be speaking to the papers at the extraordinary meeting of the Committee on Tuesday 1 May.

The Committee noted the content of the folder tabled containing the written evidence and synopsis of comments in relation to Private Sector Renewal and Houses of Multiple Occupation and the Private Rented Sector. The Committee further noted that the written evidence and synopsis of comments in relation to Large Scale Voluntary Transfers and the NIHE and the Rights of Housing Association Tenants to Buy would be issued to Members on Friday 27 April. The Committee agreed to study their content in advance of the oral evidence sessions scheduled for Tuesday 1, Thursday 3 and Tuesday 8 May.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Tuesday, 1 may 2001.
ROOM 135, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms Michelle Gildernew (Deputy Chairperson)
Mr T Hamilton
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney

Apologies: Sir John Gorman
Mr D O'Connor

In Attendance: Mr S Graham
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 1.05 p.m.

Public Session

The Clerk reported that Mr B Hutchinson had indicated that he would join the meeting following his attendance at the regular Business Committee session. The Clerk further reported that Mr B Hutchinson wished to declare his interest as a member of Filor Housing Association.

1. Housing Inquiry - Oral Evidence

Chartered Institute of Environmental Health

The Chairman welcomed the representatives of the Chartered Institute of Environmental Health to the meeting at 1.05 p.m.

In attendance: Mr Dan Kennedy
Mr John Corkey
Ms Siobhan Toland

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 1.30 p.m.

National Union of Students (UK) and the Union of Students in Ireland

The Chairman welcomed the representatives of the National Union of Students (UK) and the Union of Students in Ireland to the meeting at 1.30 p.m.

In attendance: Mr Peter O'Neill
Mr Brian Slevin

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 1.55 p.m.

Private Session

Large Scale Voluntary Transfers and The Rights of Housing Association Tenants to Buy their Properties

In attendance: Eileen Regan (Senior Researcher)
Malachy Finnegan (Researcher)

The Chairman welcomed the Researchers to the meeting at 2.14 p.m. Malachy Finnegan made a presentation in relation to Large Scale Voluntary Transfers and Eileen Regan made a presentation in relation to The Rights of Housing Association Tenants to Buy their Properties. A Summary of the presentations were circulated to the Members. After discussion the Committee agreed to note the content of the research background papers and the Chairman thanked the Researchers and they left at 2.50 p.m.

Public Session

The Northern Ireland Tenant Action Project

The Chairman welcomed the representatives of the Northern Ireland Tenant Action Project to the meeting at 2.50 p.m.

In attendance: Mr Murray Watt
Ms Fiona Stewart

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 3.15 p.m.

The Northern Ireland Co-ownership Housing Association Limited

The Chairman welcomed the representatives of the Northern Ireland Co-ownership Housing Association Limited to the meeting at 3.15 p.m.

In attendance: Mr Kevin Butler
Ms Lynn Patterson

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 3.25 p.m.

The Council of Mortgage Lenders

The Chairman welcomed the representatives of the Council of Mortgage Lenders to the meeting at 3.35 p.m.

In attendance: Mr Dan Corr
Mr Gary Mills
Mr Andrew Heywood
Ms Sandra McCormick

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 4.10 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 3 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr B Hutchinson
Mr G Kelly
Mr D O'Connor
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)

In Attendance: Mr S Graham
Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.10 p.m.

Public Session

7. Housing Inquiry - Oral Evidence

The Committee noted the content of further papers in relation to the Housing Inquiry containing further submissions, a further synopsis and a revised timetable. The Committee agreed to consider their content in advance of the oral evidence session scheduled for Tuesday 8 May.

Mr Hutchinson declared his interest as a member of Filor Housing Association.

Chartered Institute of Housing in Northern Ireland

The Chairman welcomed the representatives of the Chartered Institute of Housing in Northern Ireland to the meeting at 3.25 p.m.

In attendance: Mr Kieran Walsh, Mr John Perry, Ms Janet Hunter, Mr John Gartland

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 4.00 p.m.

The Northern Ireland Federation of Housing Associations

The Chairman welcomed the representatives of the Northern Ireland Federation of Housing Associations to the meeting at 4.05 p.m.

In attendance: Ms Jean Fulton, Mr Chris Williamson, Mr Gerry Kelly, Mr Graham Merton

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 4.20 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Tuesday, 8 may 2001.
ROOM 152, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr B Hutchinson
Mr D O'Connor
Mr E ONeill
Mr J Tierney

Apologies: Mr M Robinson

In Attendance: Mr D Martin
Mr K Barker
Mr L Hart

Mr Cobain took the chair at 1.02 p.m.

Public Session

Mr B Hutchinson declared his interest as a member of the Filor Housing Association.

1. Housing Inquiry - Oral Evidence

Northern Ireland Housing Executive

The Chairman welcomed the representatives of the Northern Ireland Housing Executive to the meeting at 1.05 p.m.

In attendance: Mr Paddy McIntyre (Chief Executive)
Mr Mike Shanks
Mr Colm McCaughley

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 2.30 p.m.

Belfast City Council

The Chairman welcomed the representatives of the Belfast City Council to the meeting at 2.40 p.m.

In attendance: Mr W Francey
Mr A Hassard

The discussions are recorded separately in verbatim minutes of evidence. The Chairman thanked the representatives and they left the meeting at 3.00 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 10 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr B Hutchinson
Mr D O'Connor
Mr E ONeill
Mr J Tierney

Apologies: Mr M Robinson
Mr G Kelly

In Attendance: Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.15 p.m.

Private Session

3. Housing Inquiry - Houses In Multiple Occupation (HMO's) and Planning Law -
Presentation by Assembly Researcher

In attendance: Eileen Regan (Senior Researcher)

The Chairman welcomed the Researcher to the meeting at 2.30 p.m. after which she made a presentation. A summary of the presentation was circulated to the Members. After discussion the Committee agreed to note its content and the Chairman thanked the Researcher for her presentation and she left at 2.41 p.m.

6. Any Other Business

The Committee agreed that subject to the availability of the specialist adviser in relation to the Housing Inquiry, Mr Paddy Gray, a special meeting should be arranged for lunchtime on Monday 21 June.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 17 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr T Hamilton
Mr G Kelly
Mr E ONeill Mr J Tierney
Mr S Wilson

Apologies: Ms M Gildernew (Deputy Chairperson)
Mr D O'Connor
Mr M Robinson

In Attendance: Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.05 p.m.

Private Session

2. Matters Arising

The Committee, after discussion, agreed to meet on Monday 21 May at 1.00 p.m. when Mr Paddy Gray the Specialist Adviser in relation to the Housing Inquiry will outline his initial views on key issues relating to the inquiry.

Public Session

5. Memorandum on the Proposed Housing Bill

The Committee noted the content of the draft memorandum of the Housing Bill and agreed that the Committee should complete its report on Housing and then ask officials to attend a meeting before the summer recess to discuss the memorandum.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

MONDAY, 21 may 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Sir John Gorman
Mr B Hutchinson
Mr E ONeill
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: None

In Attendance: Mr S Graham
Mr D Martin
Mr K Barker
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 1.06 p.m.

Private Session

5. Housing Inquiry

(i) Paper from Assembly Research Department on the DETR Consultation Paper "Private Sector Housing Renewal"

The Committee noted the research papers tabled in relation to the DETR Consultation Paper "Private Sector Housing Renewal".

(ii) Discussion with Paddy Gray, Specialist Adviser to the Housing Inquiry

Those in attendance: Mr Paddy Gray - Senior Lecturer in Housing - University of Ulster

The Chairman welcomed Mr Gray to the meeting at 1.10 p.m. after which Mr Gray made a presentation of his initial thoughts in relation to the Housing Inquiry a copy of which was circulated to the members. The Chairman thanked Mr Gray and he left at 2.05 p.m.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 14 June 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Mr J Tierney
Mr D O'Connor
Mr S Wilson
Mr B Hutchinson

Apologies: Mr E ONeill

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus

Mr Cobain took the chair at 2.24 p.m.

5. Housing Inquiry

The Committee decided to defer consideration of the draft Report until 21 June and noted that this would result in a delay in publication. The Committee agreed that further discussion might be required at meetings between 21 June and 5 July.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 21 June 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr J Tierney
Mr E ONeill
Sir J Gorman
Mr T Hamilton
Mr S Wilson
Mr B Hutchinson

Apologies: Mr D O'Connor
Mr M Robinson
Mr G Kelly

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus
Miss F Douglas

Mr Cobain took the chair at 2.12 p.m.

6. Housing Inquiry

The Committee agreed to hold a special Committee meeting on Monday 25 June and defer discussion on the Housing Inquiry until then.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

MONDAY, 25 June 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr J Tierney
Mr D O'Connor
Sir J Gorman
Mr S Wilson
Mr M Robinson
Mr B Hutchinson

Apologies: Mr T Hamilton

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus
Miss F Douglas

Mr Cobain took the chair at 12.16 p.m.

Private Session

1. Housing Inquiry

The Committee considered its first reading of the draft Housing Inquiry Report.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 5 July 2001.
ROOM 144, PARLIAMENT BUILDINGS.

Present: Ms M Gildernew (Deputy Chairperson)
Mr J Tierney
Mr D O'Connor
Mr E ONeill
Mr T Hamilton
Mr S Wilson
Mr M Robinson
Mr G Kelly
Mr B Hutchinson

Apologies: Mr F Cobain (Chairman)
Sir J Gorman

In Attendance: Mr S Graham
Mr L Hart
Ms V Surplus
Miss F Douglas

Ms Gildernew took the chair at 2.14 p.m.

5. Housing Inquiry

The Committee began a final reading of the Housing Report. However, as some Members expressed concern over certain elements within the Report, it was agreed to defer the final reading until after the Summer Recess. The Clerk was asked to make arrangements for a special meeting.

MS M GILDERNEW
COMMITTEE DEPUTY CHAIRPERSON

[Extract]

Thursday, 6 september 2001
ROOM 144, PARLIAMENT BUILDINGS

Present: Mr F Cobain (Chairman)
Ms M Gildernew
Sir J Gorman
Mr T Hamilton
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Mr G Kelly
Mr B Hutchinson
Mr E ONeill

In Attendance: Mr S Graham
Mr L McLernon
Mrs J McMurray
Ms V Surplus
Miss F Douglas

Mr Cobain took the chair at 2.09 p.m.

Private Session

7. Housing Inquiry

A revised section on 'Larger Scale Voluntary Transfer' was circulated. Members agreed to consider it and forward any comments to the Clerk by Tuesday 11 September.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 13 september 2001
ROOM 144, PARLIAMENT BUILDINGS

With the agreement of the Members, the meeting was rescheduled to commence at 3.15 p.m., following the Assembly Plenary sitting.

Present: Mr F Cobain (Chairman)
Ms M Gildernew (Deputy Chairperson)
Mr B Hutchinson
Mr D O'Connor
Mr T Hamilton
Mr M Robinson
Mr J Tierney
Mr S Wilson

Apologies: Sir John Gorman
Mr E ONeill

In Attendance: Mr S Graham
Mr L McLernon
Miss F Douglas

Mr Cobain took the chair at 3.27 p.m.

Private Session

7. Housing Inquiry - Committee's Report

The Chairman confirmed that no further comments had been received from the Members in relation to Large Scale Voluntary Transfer. In the Circumstances, the Committee instructed that the Clerk should complete drafting of the Committee's report and make arrangements for it to be considered at a special meeting.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Thursday, 18 October 2001
ROOM 144, PARLIAMENT BUILDINGS

Present: Mr F Cobain (Chairman)
M Gildernew (Deputy Chairperson)
Sir J Gorman
Mr T Hamilton
Mr B Hutchinson
Mr S Wilson
Mr M Robinson
Mr J Tierney
Mr D O'Connor

Apologies: Mr G Kelly
Mr E ONeill

In Attendance: Mr S Graham
Mr L McLernon
Miss F Douglas

Mr Cobain took the chair at 2.08 p.m.

5. Report on Housing in Northern Ireland

Members agreed to conduct a final reading of the Housing Report after all the other business before the Committee was disposed of.

5. Report on Housing in Northern Ireland (continued)

The Committee conducted a final reading of its Report on Housing in Northern Ireland as follows

Section 1 deferred.

Section 2 agreed, subject to the correction of minor typographical errors.

Section 3 agreed, subject to the inclusion of a new, penultimate sentence, in the second paragraph, about the role of the Northern Ireland Housing Executive.

Section 4 agreed.

Section 5 agreed, subject to the inclusion of additional wording, in the principal recommendation, about the introduction and operation of a 'licensing scheme'.

Mr T Hamilton left the meeting at 3.00 p.m.

Section 6 agreed.

Section 7 agreed, subject to re-wording of the principal recommendation.

Ms M Gildernew left the meeting at 3.28 p.m.

The Committee further agreed the annexes to the Report and then returned to Section 1; it was agreed, subject to consequential amendments arising from the Committee's consideration of Sections 5 and 7.

Resolved: That the Draft Report should be ordered for printing, subject to amendments.

MR F COBAIN
COMMITTEE CHAIRMAN

[Extract]

Top

MINUTES OF EVIDENCE
RELATING TO THE REPORT

MINUTES OF EVIDENCE

Thursday 25 January 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew (Deputy Chairperson)

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Mr S Wilson

Witnesses:

Mr David Crothers ) Departmental Officials

Mr George Davidson )

1.

The Chairperson: Good afternoon. We are discussing the proposed mythical Housing Bill - it seems as though everyone has seen it except us. We have asked you to come and discuss some of the specific issues that the Minister wrote to us about in September 2000. Perhaps you would run through a number of the areas in his letter for us, particularly paragraphs 2, 3, 5 6, 12, 14(iii) and 15. We would appreciate your thoughts on these areas. We intend to do some research and it is important that we have some idea of the Department's views. We have selected some issues that we think are important.

2.

Mr Crothers: Mr Davidson will deal with some of the paragraphs and I will deal with the others. The first section relates to "Houses in Multiple Occupation (HMOs)" which Mr Davidson will explain.

3.

Mr Davidson: HMOs are part of the private rented sector, which is the smallest sector that we have. However, they suffer quality problems, both in terms of management and in the physical nature of the properties. They comprise properties generally used for students and other young people, and the separate living arrangements, which apply in them, bring certain unique problems.

4.

The policy objectives are to improve quality and safety, bringing properties into the scope of the work of statutory agencies. Many properties that are currently HMOs do not fall within the legislative definition and are, therefore, outside the scope of the work of these agencies.

5.

Our first proposal is to amend the definition of an HMO in the legislation, so that any property shared by people - a property shared by people who are not part of what we would regard as a normal family - will come within the HMO definition. Some case law in England has rendered HMOs outside the scope of existing legislation because by showing that certain groups of people, while not - shall we say - blood relatives, have come to arrangements whereby one pays the rent, one does the shopping, one does the cleaning. They are classed as a household and that, unfortunately, takes the property outside the current HMO definition.

6.

We are trying to correct that by defining a HMO as a property which is shared by people who are not a normal blood family. That will come within the purview of the Housing Executive and the Fire Authority.

7.

The second proposal is that we will provide for a licensing scheme for HMOs. That is seen as a way, perhaps, of encouraging landlords to bring properties up to particular standards so that they can have them licensed and make them attractive to potential tenants. In the near future, the Housing Executive intends to launch a voluntary licensing scheme at a landlords' forum. That will be for wide consultation and, eventually we will evaluate how that scheme works. It is to be hoped that legislative provisions will be in place when the voluntary scheme is evaluated. That will inform whether or not to make it a statutory scheme. That is in the future, but those are the two statutory instruments we are presently considering.

8.

Mr ONeill: Many people would welcome a licensing scheme. I am interested to know what kind of controls the Department would visualise in the legislation to ensure that people kept to the licensing requirements.

9.

Did the Department consider at any stage the density of HMOs in particular areas? I am sure the members of the Committee are aware of the problem which has emerged, that many HMOs in one street considerably change the character and composition of the local population and cause quite a few community difficulties. Did the Department ever consider density? Is it possible to consider that?

10.

Mr Davidson: The housing division of the Department recognises that it is an issue, but until now we have regarded it as a planning matter. Planning approval has to be sought to turn ordinary houses into HMOs and we consider that density of HMOs to be a matter for the planners.

11.

The Department's Housing Division has not, at this stage, sought to put any pressure on planners to look at the numbers of houses that are turning into HMOs in particular areas. It is recognised that the intention in the legislative provision is to bring more properties into the scope of the Housing Executive, and clearly there will be staffing and resource issues for them.

12.

In relation to where they are situated, the Department - at any rate, through its housing division - has not sought to influence that in any way. It has allowed the market to determine whether there is a need for properties of that kind. If the need is geographical, then we look to the planners to ensure that the proper rules are applied when they are being changed.

13.

Mr ONeill: Do you have any control over the issue of licences? If a landlord met a set of criteria, would you be concerned about issuing 50 licences for one cul-de-sac?

14.

Mr Davidson: That would be a concern for the Housing Executive rather than the Department. All this legislation does is allow the Housing Executive to introduce a licensing scheme if it so wishes. I suspect the legislation will not go as far as designing the look of the scheme. It might be much the same as the house sales scheme, in which the Housing Executive designs a scheme for the Department's approval. Legislation simply allows the Executive to design a scheme say, for the sale of its houses, for the allocation of properties or, as in this case, to license the landlords of HMOs.

15.

Mr S Wilson: I know we said we should not get into the detail of legislation, which has not yet been drawn up, but a number of issues arise. You mentioned the location of HMOs being determined by planning policy. The fact is that most people have never applied for planning permission. I imagine that 90% of houses in multiple occupation in Belfast have never been subject to planning permission.

16.

We had a unique case on the Lisburn Road in which a person wished to legitimise what was going on in the house and applied for planning permission to make it an HMO. The application was turned down on the basis that the plan was unsuitable for the area. The Lisburn Road has one of the highest concentrations of HMOs in Northern Ireland. However, most of the houses there are not HMOs.

17.

As regards policy, who will be the licensing authority? Will it be the local council, the Housing Executive or another body? The Housing Executive already turns a blind eye to houses illegally being used for multiple occupation, for example, by paying out housing benefit to four or five people in the same house without ever ascertaining whether planning permission has been sought to use the house for that purpose. I have asked the Housing Executive about this. If the Housing Executive is to be given responsibility, what onus will be on it to ensure that there is a licence for a house used for multiple occupancy?

18.

Mr Davidson: At this point, we have not even decided that there will be a licensing scheme. We are putting provisions in place that will allow the Housing Executive to introduce a licensing scheme if it feels such a scheme to be valuable and needed. Of course, at the time of introduction, the scheme would be put out for public consultation. The terms would be open for everyone to consider, just as would the question of whether the Housing Executive would be the best authority to run the scheme. Local housing authorities in England are doing this. The Housing Executive would be the first port of call in Northern Ireland regarding the operation of such a scheme.

19.

Mr Crothers: The points raised by Mr ONeill and Mr Wilson are fair. If one has a licensing scheme, it must reflect the conditions appropriate to the property. If a scheme is put in place, it should contain, for example, the requirement that proper planning approval be in place. There will have to be some kind of enforcement provisions to ensure that any licensing requirements are met. The debate will be on whether that should be a matter for the Housing Executive or for the district council. However, as Mr Davidson has said, we have not yet reached the stage of deciding how a scheme might be taken forward.

20.

Mr Davidson: Unless the licensing scheme - if it is brought in on a statutory basis - requires everyone who operates an HMO to obtain a licence before they can do so, certain properties may remain outside its control, and their owners might still get away with operating in the absence of planning permission. Can one impose any particular criterion on those who apply to the scheme?

21.

The Chairperson: As I understand it, we have seen nothing whatsoever of the Housing Bill. We have written to the Department but received nothing. The Bill was obviously sent to the Housing Executive.

22.

Mr Crothers: No. There is no draft Housing Bill as such. We do not have a draft Bill. We have been corresponding with Legislative Counsel, and we have had various provisions ferried backwards and forwards. Perhaps Mr Davidson could correct me if I am wrong, but we do not have a draft Housing Bill.

23.

Mr ONeill: What happened to the 1998 Housing Order?

24.

Mr Crothers: There is no 1998 Housing Order. There was a draft Housing Order in 1996, which contained most of the grant provisions, but it was never enacted - and that is only one element of the proposed Housing Bill. Debate is still ongoing with the Office of the First Minister and the Deputy First Minister as to the shape, content and form of a Housing Bill, but one has not been produced. Until it is cleared by them, we cannot proceed.

25.

The Chairperson: I am totally confused. So that we are absolutely clear, are you saying that the Department for Social Development has no work done on a new Housing Bill?

26.

Mr Davidson: Legislative provisions have been drafted by the Office of the Legislative Counsel, but they are not in the form of a Bill. Since 1996, when the Housing Order fell at the change of Government, we have been legislating for certain policy proposals that successive Ministers have been happy with. A certain amount of drafting work is actually done, but not in the form of a Bill at present. There are simply provisions on some of these issues. At some point, when these policies go ahead, they will be drafted but there is no Bill at present. We are looking at policy proposals that our Minister has said he would be happy to run with.

27.

Mr ONeill: In 1998, Lord Dubs said that the Bill was ready. He said he was not going to push it forward because he was going to leave it to the Assembly. He made a public statement to that effect.

28.

Mr Davidson: That is correct. At that time there were certain legislative provisions drawn up by the Office of Legislative Counsel. They would have proceeded into a Northern Ireland Order, but that has not happened either because of the change of Administration.

29.

The Chairperson: Is the Housing Bill in the legislative programme?

30.

Mr Davidson: Yes, it is in the programme.

31.

Mr Crothers: There is provision for a Housing Bill.

32.

The Chairperson: But you have not looked at it at all?

33.

Mr Crothers: We have not got a Bill, as such, to take forward into the programme. Once we get the approval of the Office of the First Minister and the Deputy First Minister, then the Legislative Counsel will formally produce a draft Bill.

34.

Mr S Wilson: You say that you have the elements - the bits and pieces you have been gathering up over the years - that have to be married into the Bill when you get the go ahead. What time period are you talking about for the Legislative Counsel to take all those bits and pieces and put them into a Bill that can be formally presented? Given something as diverse and complex as this, are you talking about weeks, months or years? What timescale are you talking about?

35.

Mr Crothers: How long is a piece of string? It depends on what is agreed should go into the Bill. As it stands, most of the provisions could already have been drafted and a Bill could be produced in a relatively short period of time. It would be for the Office of Legislative Counsel to decide the timeframe. I would hope that it could be produced reasonably quickly. It depends on the provisions that have to go forward, and some other provisions that have yet to be drafted.

36.

The Chairperson: To clarify this, you have prepared some provisions for the First Minister and Deputy First Minister, and that is as far as this has gone.

37.

Mr Davidson: Yes, that is correct.

38.

The Chairperson: You have sent those provisions to the Office of the First Minister and the Deputy First Minister. Has their Department seen them?

39.

Mr Davidson: They have seen the policies we propose to legislate for.

40.

The Chairperson: What was their response to the policy?

41.

Mr Davidson: They have not questioned any of the individual policies. Presently, they are questioning timing, content and so forth.

42.

The Department has gone as far as it can in issuing instructions to the Legislative Counsel as to what we want. We have told the Office of the Legislative Counsel that we want to provide for a HMO licensing scheme, and we want to redefine the definition of homelessness. We have given it to them in plain English, so they know what the policy intentions are, and they will put that into "legislative speak". Not all of the provisions have been put in to legislative form at present. Until such time as it is agreed as to what will go in, the Office of the Legislative Counsel cannot do any more work.

43.

Mr S Wilson: I am worried about that. We have given it to them in plain English, but it is not getting legislated for. That implies that the proposals are translated from plain English into gobbledegook.

44.

The Chairperson: We had given a clear indication that we would not question the proposed Bill in detail, and we will not question it. However, we are somewhat bemused about the whole matter. Let us move on to the private-rented sector.

45.

Mr Crothers: This is another area that we want to see included in the Housing Bill, and we have identified the provisions we would like to see included.

46.

The private-rented sector is covered by the Rent (Northern Ireland) Order 1978. Such properties are regulated tenancies, most of which are in pretty poor condition. It is an area that we know very little about. In light of that, the Minister recently announced a review of that sector of the market. That review will complement a wider review by the Housing Executive of the whole private-rented sector.

47.

There are about 7,000 properties caught by the 1978 Order. The Department's function, at present, is to maintain a register, and to provide advice to tenants and landlords. That function could just as easily be exercised by the Northern Ireland Housing Executive, and we feel that the transfer of that function would be appropriate as the Housing Executive is the single, comprehensive housing authority in Northern Ireland. That is why the decision was made. It was felt that the Housing Executive would be better placed to administer the function.

48.

The Chairperson: OK. We move on to private- sector renewal.

49.

Mr Davidson: That is a private sector grant scheme administered by the Housing Executive. Its main purpose is to remedy unfitness, through two main grants: renovation grant and replacement grant. Replacement grant is unique to Northern Ireland - it is not in the parent scheme across the water. The scheme also allows properties to be adapted to meet the immediate needs of the disabled.

50.

The current scheme is a mandatory one. Providing a property meets any of the elements of the fitness standard specified in the law, and providing the individual does not have sufficient means to carry out the necessary work, the grant scheme will assist. People with sufficient means are deemed to have enough money for the necessary repairs, so the grant scheme does not assist. In some cases the grant scheme pays the whole cost of the repairs - for people who have no means - while in other cases grant is combined with the individual's own input. If your house fails the fitness standard and you fulfil certain criteria, then the Housing Executive must give you a grant.

51.

We are proposing to make the scheme discretionary, which will mean that the Housing Executive will not have a duty to meet an individual's need for grant. There are no signs that the discretionary scheme will be administered in a different way, but it will enable the Housing Executive to have the flexibility to target grants towards people or areas. The current scheme does not allow for that. It operates on the basis that a person in one area has as much right to a grant as a person in another area - even though the area itself may be blighted by unfitness.

52.

The change will allow the flexibility for grants to be targeted, although the Housing Executive has not yet decided that it even wants to target grants differently. Grants are currently targeted at unfit properties and at the "poor" strata of homeowners. The Housing Executive has not yet decided how it might use the discretion, but it has agreed that a discretionary scheme will give it much greater flexibility to deal with unfitness - perhaps on an area basis or through low-cost grants. This move makes the scheme discretionary, but it leaves disabled facilities grants as mandatory to reflect the Government's desire to ensure that the disabled have houses to meet their particular needs. There is also a discretionary grant for disabled facilities.

53.

The group repair scheme mentioned in the original paper is designed to take away some of the inflexibility in the current legislation. It allows us to deal with certain properties, so that some area-based regeneration schemeS can go ahead.

54.

The third proposal is to change the present minor- works assistance grant, which is a small grant available specifically to the elderly on income-related benefits. The current scheme creates a gap. If people who are not elderly or on income-related benefits cannot access renovation or replacement grant - because there is minor disrepair in their home - they are left without the minaccess to any grant assistance. Therefore we will replaceor-works assistance grant with a home-repair grant, which will be open to the elderly and the non-elderly, all on income-related benefits. We are going to increase the limit and increase the range of works that can be covered by that particular grant.

55.

Mr S Wilson: Can I have some clarification on the discretionary grant scheme? You say that it is designed to allow the Housing Executive, where there is limited money available for spending on grants, to target particular areas.

56.

Mr Davidson: I did not mention limited resources. The Executive can increase the grants, but only if they want to, through the normal process.

57.

Mr S Wilson: You do not give everybody a grant. Is that the reason for that discretion? You have to select on some basis. Presently, there is kind of a mandatory arrangement saying that you have to meet certain conditions, such as a certain income level, to qualify. That simply means that sometimes people have to wait a bit longer, because money is not available in a particular year.

58.

You are now saying that there will be this power of discretion. As far as the discretion is concerned, will the Housing Executive people design the scheme themselves? Will the parameters of that discretion be built into any legislation? Or will the Housing Executive be free to change those parameters as and when they see changes in housing circumstances in particular locations?

59.

Mr Davidson: Even at the current time, there is not sufficient money to fully fund the grant scheme and many other housing programmes. That situation would not change. Speculation is that under the discretionary scheme, the Housing Executive could reduce the grant budget if it wanted to. There would no longer be a mandatory demand on them to finance it. But there would be other pressures on them. They have no intention of reducing the grant budget, even in their planned expenditure. They are keeping to the levels that were already there for the last few years.

60.

The pressures of the Programme for Government and new TSN will be there. They may decide to stay in mandatory mode, and not use the discretion at all. That is something they could choose to do. If at some point they chose to use the discretion to direct resources in a different way than the present grant scheme, that would be subject to equality impact assessment. The Housing Executive would not be in a position to simply decide that they will use discretion in a particular way, that they would not be accountable for this, and there would be no other pressures brought to bear. There would have to be full consultation on any proposal, if they wish to change the direction of the system from what it presently is under the mandatory scheme. In theory, the Executive could reduce the budget, if there were cuts on its programme. At the present time, they could not cut the grant budget. It simply means that they will have to manage the demand.

61.

The Chairperson: But it gives them more flexibility. Let us move on to the right to buy proposal.

62.

Mr Crothers: The purpose of the right to buy provision is to align the rights of housing association tenants with those of Housing Executive tenants. Housing Executive tenants currently have the right to buy, while housing association tenants do not have this statutory right. A voluntary scheme is in place, and the Department is encouraging housing associations to adopt the scheme in anticipation of the introduction of a statutory scheme. This legislation is designed to introduce a statutory scheme that will require housing associations to implement a house sales project that mirrors that of the Housing Executive.

63.

The Chairperson: Why was the policy decision made to omit the clause on the regulation of housing associations? Why are there no clauses for that?

64.

Mr Crothers: As part of the housing policy review, it was proposed that the Housing Executive become responsible for the regulation of housing associations. When the Minister was appointed - that was originally Mr Nigel Dodds - a raft of measures flowed from the housing policy review and a decision was taken as to which of those would go forward for legislation immediately. Given that the Department had responsibility for the regulation of housing associations, it was decided that the function was being properly exercised. The Minister decided that there was no pressing need at that time to transfer the function to the Housing Executive, although it was not ruled out as a future possibility. It was decided not to proceed at that time, given that there were other pressures to introduce legislation. It was also decided that to transfer the regulation to the Executive would add a considerable volume of legislative provisions.

65.

Mr S Wilson: How many people are involved in the regulation of housing associations?

66.

Mr Crothers: Nearly everyone in the Housing Division in the Department for Social Development is involved in some way. That is approximately 40 staff. Those working on it daily would number less than half that.

67.

The Chairperson: To clarify, do these 40 staff work across the range of housing issues?

68.

Mr Crothers: Yes.

69.

The Chairperson: What percentage of their time is actually spent in housing association work?

70.

Mr Crothers: There would be at least 20 staff dedicated to that full-time.

71.

The Chairperson: Out of 40?

72.

Mr Crothers: Yes, however, I would guess that 40-50% of the time of the other 20 people could be spent on housing association work.

73.

The Chairperson: That is roughly 30 out of the 40?

74.

Mr Crothers: Yes.

75.

Mr B Hutchinson: I would like to return to the issue of the right to buy. It seems that housing association houses are being compared to those of the Housing Executive. There is a difference. Housing associations have to go to banks to raise money to build houses, while the Housing Executive gets its money directly from Government - no private money is used. If social housing is continually being sold to private owners, how do you plan to ensure that it does not happen in areas where social housing is needed?

76.

Mr Crothers: That question is agitating the minds of those in the voluntary housing movement. The intention is to introduce a statutory purchase grant that will be paid to housing associations to reimburse them for the discount they have to offer to the prospective buyer of the housing association house. That money will then be ring-fenced and will be used either to build new property or, depending on the circumstances, on existing property.

77.

There might be a feeling that is wrong to sell too many houses in a particular area, but this helps to promote sustainable communities. The house sales policy contributes to that through mixed tenure estates. Some would argue that that is a good thing; selling the houses to tenants helps to create more stable and balanced communities.

78.

Mr B Hutchinson: I do not disagree, as long as it is provided by the private sector.

79.

The Chairperson: We shall move on to homelessness.

80.

Mr Davidson: There are three aspects to the homelessness proposals, and all are about alignment with GB. We do not slavishly follow GB in housing policy, but in this case we thought that we should do so.

81.

The first proposal is that we bring Northern Ireland's legislation into line with GB on the question of classifying people as homeless. In GB, people are not classed as homeless if they have accommodation available to them anywhere in the United Kingdom. Northern Ireland's legislation on homelessness states that people are homeless if they do not have anywhere to live in Northern Ireland. Therefore, we could, in theory, have a person who has accommodation in England, Scotland or Wales presenting as homeless to the Housing Executive. Under current legislation, they could be deemed to be homeless because they have no property in Northern Ireland. We will bring our legislation into line with that in the rest of the United Kingdom: someone who has a property anywhere in the United Kingdom will not be classed as homeless in Northern Ireland.

82.

The second proposal is about intentionality. People are classed as homeless as long as they are not deemed to have made themselves intentionally homeless. The Housing Executive makes certain inquiries when a person presents as homeless to see whether there is contrived homelessness - maybe because of a deal with the rest of the family. There is a perception that people are getting a fast track to social housing and being classed as homeless when they may not, strictly speaking, be so. The Housing Executive, however, has no legislative basis for making such inquiries. In England, local authorities have a legislative basis for looking closely at intentionality, and we propose to give the Housing Executive the legislative basis to do what they currently do anyway.

83.

Mr ONeill: What kind of controls are you thinking of putting into the legislation? There are many complaints about the rigour of the Housing Executive investigation, and there is evidence that cases who present as being homeless are not classified as such. Will the legislation reinforce the present regime or will it allow some freedom of interpretation?

84.

Mr Davidson: If a person does not present to the Housing Executive as homeless, there is little that the Housing Executive can do about that. We are dealing with people who come to the Housing Executive applying to be classified as a homeless person. I cannot say how the legislation will look; the Office of Legislative Counsel will do that. We are proposing to provide for a situation in which a person may be treated as intentionally homeless and, therefore, will not be owed the same duty by the Housing Executive as a person who is unintentionally homeless.

85.

They shall be treated as intentionally homeless if they deliberately enter into an arrangement with the intention of misrepresenting their circumstances. How the Housing Executive will actually go about trying to see if someone has misrepresented their circumstances is not something that I suspect will be built into the legislation. The Executive will simply be given powers to inquire into intentionality, which they presently do not have the powers to do, whereas local authorities in Great Britain do have those powers. I cannot say at this point how the legislation will actually look, but the policy intention is that a person could be classed as intentionally homeless if they deliberately enter into an agreement with other people to misrepresent their circumstances as "homeless".

86.

Mr ONeill: Is that the only category that you are concerned about in this part?

87.

Mr Davidson: Those are the only things that we are legislating towards.

88.

Mr Davidson: The third category deals with persons from abroad. In England, the Home Office can make certain provisions as to what class of person shall be owed a duty by the housing authority, or to allow the Department, in this case, to make regulations prescribing the classes of people from abroad who are to be treated as ineligible for homelessness assistance. It is tied in with asylum and immigration issues across the water, and this is just to bring us into line. People from abroad will not be entitled to homes. Northern Ireland would not have the same powers, and may potentially become a magnet for people abroad who see an easier route into Northern Ireland than the rest of the UK. We are just bringing ourselves into line with GB, so that persons will be brought through the same way.

89.

The Chairperson: Injunctions against antisocial behaviour.

90.

Mr Davidson: At present, where a tenant of the Housing Executive has breached or threatens to breach their tenancy agreement, the Executive can apply to the courts for an injunction restraining the tenant from breaching or continuing to breach their agreement. While the present injunction can protect the Executive's interests as a landlord, there is less scope for protecting the interests of Executive tenants where the individuals committing antisocial behaviour are not themselves tenants.

91.

It is proposed to allow the Housing Executive to apply for a new kind of injunction that can be granted against any person who engages in any kind of antisocial behaviour, where this effects the Executive's housing stock. In other words, there is a gap in the present legislation. If a private-sector owner, and there are a number of them in Executive estates, is guilty of causing antisocial behaviour, the Executive has limited powers, if any, to do anything about that, because they are not their tenant. This tries to correct that. Again, it brings us into line with local structures in England and Wales under the Housing Act 1996.

92.

We are also proposing to extend the facility to apply for injunctions to registered housing associations, as well as the Housing Executive. Since housing associations will now be the landlord of estates, in small estates, this will make the join between the two social landlords.

93.

The Chairperson: And finally, large-scale voluntary transfers.

94.

Mr Crothers: The large-scale voluntary transfer provision is included because, as the legislation stands at the moment, if a decision was taken to go down this route, a single tenant of a particular estate could veto the transfer. There are no plans to sell off the Housing Executive stock at this point, but it was considered prudent to take the opportunity in this proposed legislation to remove the embargo that an individual tenant would have - and to bring the situation in to line with England, Scotland and Wales - whereby a majority of tenants eventually decide whether or not to agree to a voluntary transfer.

95.

Mr ONeill: How many examples does the Department have where one person has frustrated an attempt to sell off?

96.

Mr Crothers: No attempt has been made to sell off any of the Housing Executive property.

97.

Mr ONeill: Why is this necessary?

98.

Mr Crothers: A decision may be taken at some time in the future to remove the "landlord" role of the Housing Executive. This is a topical debate in Scotland and Wales. A political decision might be made to remove the landlord role of the Housing Executive; to set up arms-length companies or transfer the stock to a housing association. If that happens, then it would seem prudent to introduce this legislation to remove the embargo of an individual.

99.

Mr ONeill: I know we are waiting on other developments regarding this, but I am highly suspicious of this particular piece of legislation and I will wait to see what will develop.

100.

The Chairperson: Thank you very much.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew (Deputy Chairperson)

Mr Hamilton

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr D Kennedy ) Chartered Institute of

Ms S Toland ) Environmental Health

Mr J Corkey )

101.

The Chairperson: Good afternoon. Welcome to the Social Development Committee.

102.

Mr Kennedy: I am the chairman of the Northern Ireland Centre of the Chartered Institute of Environmental Health. The institute is concerned with the protection, enhancement and promotion of public and environmental health. To this end it has 9,000 members who enforce regulations and educate the general public through local authorities, central government and in the commercial sector. Our professional body, based in London, advises the Government on practical matters and on public health policy and also responds to a wide range of consultations that the Government puts forward.

103.

Mr Corkey: I will give a short synopsis of the Northern Ireland Centre's main points. With regard to the proposed move from mandatory to discretionary grants, I will focus specifically on repair grants. These are available for work that is to be carried out to comply with public health notices. The percentage grant, in this case, is dependent on the net annual value of the property, and is available to the entire private sector, including owner-occupiers.

104.

That has encouraged the owners of both occupied and vacant properties to request district councils to serve public health notices that require them to carry out repair work. Many speculative landlords use this mechanism as a fast-track method of circumventing a more appropriate renovation grant, for which they would be means-tested.

105.

Many properties have been effectively repaired using this grant. However, the Northern Ireland Centre believes that the primary purpose of the Public Health (Ireland) Act 1878, with regard to housing, should be exclusively to protect people in their homes, rather than support speculative landlords or affluent owner- occupiers in repairing their properties.

106.

We believe that moving to a discretionary repair grant would allow the Housing Executive to set appropriate criteria, so that vulnerable people would be properly protected and property owners would be suitably means-tested. However, the Centre wishes to see mandatory repairs grants remaining for tenancies protected under the Rent (Northern Ireland) Order 1978, as the rental income from those properties is controlled by the Government, and would normally be less than the market rent.

107.

The Northern Ireland Housing Executive is the biggest landlord in the Province, and the Northern Ireland House Condition Survey 1996 estimated that there were over 3,000 unfit Housing Executive dwellings. As the Housing Executive cannot take enforcement action against itself, we believe that an independent authority should be responsible for the enforcement of fitness standards in Housing Executive property. Indeed, the Centre believes that the Housing Executive should in general be relieved of its conflicting role as regulator and provider, and that the enforcement of housing standards should be a function of an independent regulator.

108.

We are particularly concerned that there appears to be reluctance on the part of the Housing Executive to serve repair notices on unfit dwellings, despite its having an obligation to deal with the issue of unfitness. In addition, we feel that some of the unfitness levels identified in former housing action areas, where the Housing Executive is proposing area renewal or redevelopment, would not stand up to scrutiny. For example, it is difficult to understand an unfitness level of as much as 70% in a former housing action area, when the Province's average is just over 7%. Therefore, there is a compelling case for an independent assessor of unfitness in Housing Executive property, so that the public can have confidence in the objectivity of the Housing Executive and its reasons for action in relation to unfit dwellings.

109.

District councils are ideally placed to provide the independence needed to ensure that the assessment of fitness is both accurate and objective. Environmental health officers working in local authority environmental health departments have the regulatory experience in fitness assessment, not only through their training, but also through their statutory powers under the Rent (Northern Ireland) Order 1978 and their involvement, as surveyors and supervisors, in successive house condition surveys.

110.

With regard to houses in multiple occupation (HMOs), the Northern Ireland Centre endorses the Government's commitment to a mandatory licensing scheme and recommends that the Assembly move to introduce mandatory licensing as a matter of priority. We would also wish to see a clearer definition of HMO being introduced in order to ensure that all multiply occupied dwellings are included. Many of the worst housing conditions are to be found in HMOs, and often they provide accommodation for the most vulnerable members of our society. We believe that the Housing Executive, as a landlord, is trying to fulfil conflicting roles by being responsible for both regulation and provision of housing.

111.

The current Housing Executive approach to HMOs will not adequately address the problems in that section of the privately rented sector. For example, the 1999 strategy document implied that it was following a primarily grant-led strategy. However, regulation of this sector must include a proactive policy of enforcement if health, safety and welfare are to be properly protected.

112.

The voluntary licensing scheme recently proposed by the Housing Executive is unlikely to adequately address the worst HMOs, which often house the poorest and most vulnerable tenants. The Northern Ireland Centre believes that environmental health officers working for district councils have the necessary training and experience to assess health risks in HMOs and to identify enforcement priorities so that the most dangerous properties are addressed first. A discretionary grant from the Housing Executive could be used in tandem with this approach to facilitate landlords in complying with their statutory obligations. We do not believe that the transfer of these regulatory functions would in any way undermine the Housing Executive's strategic role as the Province's housing authority.

113.

The Northern Ireland Centre is particularly concerned about the limited repair options that are available in the privately rented sector. We want to see powers similar to those in England and Wales, where local authorities can take action in respect of otherwise fit properties that are in disrepair. We recommend that the Committee proposes that provisions similar to those contained in section 190 of the Housing Act 1985 be included in the housing Bill.

114.

A recent Court of Appeal judgement precludes district councils from serving public health notices in respect of conditions that give rise to a risk of physical injury. While that is not specifically a matter for the housing Bill, the Committee may wish at a future date to consider an expanded definition of public health nuisance that includes health risks associated with traumatic physical injury.

115.

Finally, all private sector landlords are required to provide their tenants with rent books. The Rent (Northern Ireland) Order 1978, however, did not designate any specific enforcing authority for that provision, and many landlords ignore it. We recommend that an amendment to the 1978 Order be included in the housing Bill, designating district councils as the enforcing authority for the rent book regulations. That would require only a simple amendment and would not only provide tenants with greater security of tenure, but also facilitate many of the investigations that are carried out by district council environmental health officers into allegations of harassment and unlawful eviction.

116.

Mr ONeill: The most interesting and innovative point you make relates to the unfitness issue and the role that you see for district councils because of their objectivity; in the past, councils have not been known for that quality. Are you confident that councils have that objectivity, particularly as you recommend that they be the sole arbiters of the situation? You do not provide any recourse for those who might be in dispute with the council. Your confidence is interesting. We are due for an administrative change and we do not know what the shape of that will be, yet you appear to be confident. I would appreciate your response to that.

117.

Do you see any budgetary problems in moving from a mandatory to a discretionary grant? Would a discretionary budgetary regime be more easily raided in the annual allocations than a mandatory one?

118.

Mr Corkey: That is a matter for the Housing Executive. We cannot speculate on that. Our approach is primarily pragmatic. In our experience, the mandatory grant currently available to people on foot of a public health notice has encouraged an inappropriate use of public resources. Money is often directed toward speculative landlords and people with ample means, because the grant is not means-tested. We believe that the primary purpose of the public health legislation is to protect the vulnerable. We do not feel that the mandatory grant facilitates that.

119.

The Chairperson: What about councils and their powers to make decisions on issues?

120.

Ms Toland: I do not think it would be fair to make a sweeping statement on the independence of district councils either in the past or in the future. In terms of the professional body that we are representing here today - the environmental health profession - even if the district council function dealing with the interpretation of unfitness were transferred, the independence of the profession is certainly controlled.

121.

To become an environmental health officer you have to become a chartered practitioner, which takes a number of years. There are continuing professional development schemes to ensure that there is a drive toward consistency and uniformity among all environmental health practitioners in the United Kingdom.

122.

Locally, district councils form alliances in committees that look at consistency issues. They look at the procedures and their application in all aspects of the regulatory enforcement role. There is a control mechanism there. That is where we feel that the argument is very strong: in terms of the independence and the equitable application that an environmental health practitioner can bring to this area of work.

123.

The Chairperson: I want to go back to the issue of voluntary and mandatory grants. You say that it is essential that they be means-tested. Does a means- testing issue go along with the decision to move from mandatory to discretionary grants?

124.

Mr Corkey: Yes.

125.

The Chairperson: I am always concerned about means-tested grants. I have found from experience that some elderly people who own their own homes also have small occupational pensions. When they are means-tested, they fail to qualify for grants. A group of people would be excluded and would never get their houses repaired.

126.

Mr Corkey: I do not disagree with that. We are not best placed to advise on what the actual mechanism of means-testing should be. There is a function that they fulfil today, and we are not involved in that. We are lay people in that respect, in that we assume that means-testing will be a fair system that will ensure that people who cannot afford to pay are not made to pay.

127.

The Chairperson: That is not the case.

128.

Mr Corkey: We are coming at it from a slightly different angle. There is another side of the coin if you like, in that we have seen the public health legislation being used and abused as a speculative process, rather than simply as a mechanism for protecting people in their homes. That is my concern. I do not have any great view on the mechanism of means-testing. However, I did stress that we want to see a mandatory grant retained in relation to protected tenancies.

129.

Ms Toland: At the moment there is no means test as such, but there is a sliding scale based on the net annual value of the property. For older and larger homes, the grant is minimal. It is only £500 for owner-occupiers. It is not meeting their needs at the moment, so this would be a way of supplementing what is currently available for owner-occupiers.

130.

Mr Corkey: From an enforcement point of view, environmental health officers are being asked by property owners to come out, inspect their premises and subsequently serve a notice requiring them to do something that they are perfectly at liberty to do without district council intervention. That is a misdirection of resources. It would be better to try to target those who are in need, rather than facilitate people who have means and who have found a way round the system.

131.

Mr ONeill: That is exactly the point. Is there no other way of dealing with the administration of a mandatory grant? I recognise the problem that has been identified, but is there no other way in which that could be implemented without removing the mandatory grant?

132.

The Executive budget can often be raided for different things, and inevitably it means a reduction in such services. If there was an obligation to provide a grant and that was taken away, some of us would feel that something had been lost. The administration of the grant could perhaps be made more secure in order to prevent such abuse.

133.

Mr Corkey: At the moment a grant is available for vacant properties. That is because we are obligated to serve public health notices on occupied or vacant properties if there is deemed to be a public health nuisance in that property. It seems inappropriate to serve a notice on a vacant property in order to protect someone's health and safety. It may be that it is inappropriate to have any grant payable on foot of a public health notice served in respect of a vacant property. Perhaps the grant should be restricted to occupied properties.

134.

We are talking about a specific grant. We are talking about the repair grant, which is solely available for public health notices and for certificates of disrepair in protected tenancies.

135.

The Chairperson: Please remind us of the limits of that.

136.

Mr Corkey: The financial limits?

137.

The Chairperson: Yes.

138.

Mr Corkey: The maximum grant is £5,500. In respect of owner-occupiers, it was limited significantly to £500 in 1996. The grant available is a percentage of that, depending on the net annual value of the property. That is not exactly means-testing.

139.

Mr ONeill: I will return to my former issue. I really wanted to hear about the regulator's role. You are identifying something not unlike a housing ombudsman, or someone with that type of a role, when you talk about the regulation for HMOs and the regulating standards.

140.

Mr Corkey: That may be slightly misleading. We do not see district councils as having a role in the sense that you are describing. We are recommending that district councils, through their environmental health departments, be responsible for the enforcement of provisions relating to unfitness and HMOs. That is a relatively small part of the Housing Executive's current function. It would facilitate the Housing Executive in relieving it from something that, in many respects, is inconsistent with its role as a landlord. We do not see ourselves as regulators of the Housing Executive per se, other than in relation to unfit properties. Housing Executive tenants living in an unfit property currently have no one designated to regulate their situation, despite the fact that the law says that no one should be expected to live in an unfit house.

141.

Ms Toland: Our experience is that private tenants are living in unfit properties. They have difficulty in getting repairs executed by the landlord. There is no proactive enforcement regime coming from the Executive in terms of requiring a landlord to carry out works in order to make houses fit. Therefore, we are going in and out of properties trying to deal with those situations under public health nuisance legislation that is 120 years old, and that is very ineffective in dealing with the overall fitness of a property.

142.

Mr ONeill: Is that your view on licensing of housing?

143.

Mr Corkey: Yes, we think that mandatory licensing of HMOs would be a move in the right direction, because it would bring all HMOs immediately under control. A failure to license would be an offence, and set out within that licensing framework would be standards that the landlords and the properties would have to comply with. It would make regulation of that sector that much easier.

144.

We have expressed concern about the proposed voluntary licensing scheme being put forward by the Housing Executive, because voluntary licensing will not include those people who wish to remain outside the scheme. They will invariably be people who are less concerned about the interests of their tenants and more concerned about extracting multiple rents from a single property with very little investment.

145.

Ms Toland: The professional body has been working with the Department of the Environment, Transport and the Regions on a scheme that would involve mandatory licensing of all of the private rented sector, not just HMOs. The experience of our colleagues in the English authorities suggests that that is the way forward and that the voluntary licensing scheme has not worked. We are suggesting that it should be mandatory. We have support from the Department of the Environment, Transport and the Regions. This measure was in the proposed Housing Bill put before Parliament last autumn. We hope that this Committee will consider it.

146.

The Chairperson: What is the size of the problem as far as landlords are concerned? I am sure that there are good landlords.

147.

Mr Corkey: In respect of what?

148.

The Chairperson: HMOs and unfitness.

149.

Mr Corkey: I do not have those figures.

150.

The Chairperson: What percentage of landlords would be in the category of "poor landlord"?

151.

Mr Corkey: I am not sure what the exact percentage is, but one of the problems with the current housing market is that people see housing as an investment opportunity. Lay people - people who are not professional landlords - are buying property as a quick-fix investment. "Unscrupulous" might be too harsh a word for some of them, but they are less experienced. A significant number of property owners - not a majority - put the minimum investment into it and try to extract the maximum from it. We are concerned that very often it is the most vulnerable people who end up living in that sector of the housing market.

152.

The Chairperson: We are all concerned about that. Thank you very much. It has been very interesting.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr ONeill

Mr McClarty

Mr M Robinson

Mr Tierney

Witnesses:

Mr B Slevin ) National Union of Students (UK)

Mr P O'Neill ) and the Union of Students in Ireland

153.

The Chairperson: Welcome to the Committee. The format will be 10 minutes for presentation and 15 to 20 minutes for questions.

154.

Mr P O'Neill: Thank you for the opportunity to present oral evidence supporting the two written submissions that we made. Given the relatively short time available, we will concentrate on Houses in Multiple Occupation (HMOs). We are more than happy to pick up any wider points from our second submission, which outlined the broader issue of student housing as part of the wider housing inquiry.

155.

We are the representative body for student organisations in Northern Ireland and we have a long history of involvement in housing campaigning, particularly in the private rented sector. With the increase of students living in this sector, we have had particular concerns about HMOs for a number of years. We estimate that there are 13,000 students throughout Northern Ireland who live mostly in category B shared houses.

156.

Our recent survey showed the wider position of student housing. It is estimated that there are 185,000 students, trainees, student nurses and others in tertiary education in Northern Ireland. With approximately 5,000 places being provided by colleges, institutional accommodation cannot cater for the bulk of student accommodation needs.

157.

Queen's University, for example, estimated that 8,000 of their students live in the private rented sector. The University of Ulster estimates that 5,000 students live in traditional flat land across Northern Ireland.

158.

In our submission we have also included some evidence on costs. Private rented accommodation is slightly cheaper than the average institutional accommodation. We estimate that colleges charge an average of £40 per week while the private rented sector average rent, estimated by Queen's University, is £38 per week.

159.

Some of the key issues highlighted in our submission to this Committee, and to the Housing Executive's voluntary licensing scheme, suggest that developments in Great Britain should be followed. That should have been done much sooner.

160.

Quite frankly we are frustrated with the slow progress of the Housing Executive on this issue. It appears to have been in consultation mode for the last four years yet our members still continue to live in dangerous properties. There have been well-publicised incidents where students have actually died as a result of fire in such accommodation.

161.

We are calling on the Housing Executive to speed up the process of inspecting and licensing but we realise that it is under funding constraints. Nevertheless, we want to see a greater sense of urgency, particularly in targeting properties of greater risk that, in our opinion, are often in student areas.

162.

We welcome plans to include college and nursing accommodation within regulatory controls. Halls of residence should be included within the framework even though that will have particular implications, especially for the two universities. We want to see an improvement in tenancy management standards and in the legal rights of tenants, such as security of tenure in the private rented sector.

163.

The greater promotion and enforcement of safety standards, particularly fire safety, is also important. We want to see the Housing Executive, as well as giving due recognition and support to landlord associations, supporting tenants' associations in the HMO sector also. The Housing Executive's strategy is a little skewed in favour of landlords at the expense of the development of a real voice for tenants in the HMO sector.

164.

We want to see tenants associations developed with the support of the Housing Executive. Indeed, we want to see a tenants' representative included in the appeal mechanisms, that the Housing Executive has proposed. We want the Housing Executive to refuse to license landlords who have convictions for assaults on their tenants or who have been convicted for breaches of health and safety legislation.

165.

Although we have concentrated on the HMO regulations, particularly the voluntary licensing schemes, we are more than happy to take questions on the private rented sector generally. However, the mandatory licensing of HMOs would be a useful start, with a greater willingness from the Housing Executive to engage with organisations like ourselves and other representative bodies to try and protect the interests of tenants in HMOs.

166.

Mr Slevin: As Mr O'Neill says, I am the elected representative for the National Union of Students - Union of Students in Ireland (NUS-USI), but previously I was a welfare officer in the Students Union of Queen's University, Belfast. I was the first port of call for students with problems concerning their accommodation. Houses in south Belfast are notoriously three storey buildings, and I have looked at cases where landlords have attempted to pack in as many students as possible. One of the worst cases I came across was a six-bedroom house with 13 students living in it. The rooms were actually divided by a hanging curtain or blanket down the middle. That was the best deal that those students could get. They were only paying £25 to £30 a week, as opposed to £50 to £60 a week for other accommodation.

167.

When universities and colleges upgrade their on-campus accommodation they do it in such a way that they price students out of the market. There may be a room with en suite facilities, Internet access perhaps, and a phone line - but students cannot afford it. The better-off students will move into the nice on-campus accommodation and the students from low- income backgrounds look for cheap accommodation that, more often than not, will tend to be in the room divided by a blanket or curtain.

168.

From my experience of the mandatory grants for landlords, a landlord will acquire a property that probably does not meet fire and safety regulation requirements. They will receive a grant to upgrade the accommodation, and will subsequently price the student out of the market. I am now moving out of my second accommodation because the landlord has received such a grant. He will do up the accommodation, and put up the rent by £50 a month. I could not afford that on my current wage, nor when I was a student. Everything is geared towards assisting the landlord. It is about time that the tenant is taken into the equation.

169.

The Chairperson: Do you have any formal relationship with the Housing Executive?

170.

Mr P O'Neill.

171.

No. We request meetings from time to time.

172.

The Chairperson: Is there any formal relationship between your organisation and the Housing Executive?

173.

Mr P O'Neill: We are not involved in any machinery for consultation or association.

174.

The Chairperson: Are the conditions you talked about for students in Belfast the same for those living outside Belfast?

175.

Mr Slevin: Some housing in Coleraine is summer holiday accommodation. That tends to be of a higher standard, and therefore cheaper. The rule of thumb is that the further you have to travel, the cheaper the accommodation will be. It would be expensive to live close to a university or college. Coleraine and Magee campuses might not experience the same problems as in Belfast. However, come September when the students are aware of the need to find accommodation early, then the furthest-away, or worst, accommodations are taken up. That happens in Coleraine and Magee also.

176.

Mr E ONeill: Your presentation and documentation are comprehensive. Your priority of getting mandatory licensing for landlords is clear. Your initial paper states that you would like to see a duty of care placed on all landlords. Have you looked at the licensing scheme and the discretionary licensing scheme that the Housing Executive recently introduced for HMOs? As representatives of the student body, can you be certain that that will provide a sufficient duty of care?

177.

Mr P O'Neill: We do not think so. We are informed by the Scottish model, and the way that the matter has been approached in Scotland. It is clear more stringent controls, together with the relationship that has been developed between landlord associations, tenants groups, and the partnership approach between local authorities and those bodies, is the way to develop a greater enforcement of the duty of care and tenant management standards. We recognise that it will take some time. Landlord associations in Northern Ireland are underdeveloped. We are talking about evolution in the strategy, nevertheless, we want the Housing Executive to take greater ownership as regards promoting the debate and getting across to landlords their responsibilities in that sector.

178.

The Chairperson: If there is to be an improvement in HMOs - as everyone wants - that may mean a necessary increase in rents. Has that been taken for granted?

179.

Realistically, I do not think that people in the private sector will spend large amounts of money improving houses, and then cut rents. The students that you are talking about, and who concern us, are living on the margins, and they will be further marginalised. That is a difficulty that we will have to wrestle with also. It is right that we flag that issue. However, it is not just as straightforward as you make out.

180.

Mr Slevin: Absolutely. If it is a question of increasing rents by a certain percentage while bringing accommodations up to health and safety standards then it is a fair enough balancing act. Ideally we would like to see a situation where all HMOs are regulated for fire and safety and rents are not increased. If that is not going to happen then we must put the safety of the student before the price of the accommodation.

181.

Ms Gildernew: Your presentation was comprehensive. You talked about landlords getting grants and then pricing students out of the accommodation. As I am sure you are aware that activity is not restricted to student accommodation. The International Fund for Ireland grants awarded to private landlords mean that they can usually place extortionate rents on property.

182.

I am well aware of the poor standards in student accommodation and, in particular, the fire safety standards. You are pushing against an open door as far as the Committee is concerned because the mandate on licensing must be brought in. However, the question is how we ensure that licensing does not result in students not being able to get any accommodation. If students cannot afford property in the licensed rented sector they may turn to back street private landlords who can provide accommodation that students can afford and that will be of a worse standard than they are in at the moment.

183.

Mr P O'Neill: Rent control is an issue. Obviously, in the controlled sector there are rent controls. Why should that pertain only to properties because of age? There is no logical reason why rent control is not extended right across the private rented sector, and we certainly have concerns. The last thing that we want to do is to restrict the already reduced private rented sector. We recognise that there is a delicate balance in providing incentives for entrepreneurs, which effectively landlords are; they want to make a buck out of housing people. That is why we think that the public authority - the Housing Executive - has a role in public housing and changing the balance between providing accommodation just for families, which is what there is at the moment.

184.

Perhaps the Housing Executive has a role to play in opening up housing stock to single people following the growth of the number of single people and young people who want to live in a variety of housing types. The public authority could actually provide shared accommodation so that there is an alternative to the private sector. We could get a much wider mix; we could get accommodation above shops; we could bring in a greater variety of housing types and tenures such as there are in continental Europe. For some reason the UK and Ireland have not been developed as much. We would argue that the Housing Executive should be more imaginative, vest in more properties and lease property directly to student organisations such as our student housing association co-operative - SHAC. We would like to see SHAC having a much bigger role to play in providing more options to students and other people.

185.

The Chairperson: We all realise that a lot more people want to live on their own. The old style of living in the family home is changing. I would like to see the Housing Executive respond to that in a more imaginative way than they have done up to now. The change in lifestyle manifests itself in the private sector apartments, which appeal to young professional people and suit their style of living. The Housing Executive needs to take some of that on board.

186.

Your point about working alongside the students' housing representatives was interesting. It is important for those of us who are not at the coalface to listen to people who are dealing with the issue on a day to day basis.

187.

The Committee would be happy to raise some of those issues when the Housing Executive representatives attend. If you are going to look at how tenants' associations deal with tenants, it is important that you look at the tenants as well - which is something that you do.

188.

Mr Hamilton: Mr Slevin, you said that you would accept the fact that if landlords had to bring their properties up to a certain standard you would agree to a percentage rise in the rent. Were you suggesting that there should be a limit to the increase that the landlord would be allowed to make in the rent?

189.

Mr Slevin: Yes. Peter O'Neill touched on the point that we could foresee an increase in costs in the rented sector. Personally, I have lived in two houses where the landlord has received the improvement grant. The rent in the first case went up from £120 per month to £175 per month. Currently the second house is going from £142 per month to £192 per month and that is a massive increase. While I would not like to see an increase in rent just because the landlord is bringing his or her premises up to basic standards I can foresee it happening. However, I would like to see some sort of control employed.

190.

Mr Hamilton: Would that be legislation to limit the increase that the landlord would be allow to charge due to improvements?

191.

Mr Slevin: Absolutely. From what I have seen, landlords have scrimped and saved to try and stretch this grant money out. The landlord is in a position where the premises that he purchased was perhaps at a cut down price because of its standard. He receives financial support for renovation, and when the house reaches a certain standard he will charge more for it or he can sell it on at a significant profit. This issue should have been addressed sooner, but I would welcome any proposal to cap the increase on premises that has received a grant to renovate it.

192.

Mr E ONeill: I was interested in your comment that you did not have any particular relationship with the Housing Executive. I remember a study that was done on student housing in 1996. It appeared to be quite an authoritative document at the time, and it seemed to touch on most of the issues. I remember that it was received well by all sides. I agree with your frustration that nothing much has happened in the years since it was published. However, I am surprised that no partnerships emanated from it.

193.

Mr P O'Neill: We will probably come back to the issue about rowdy behaviour in student areas that has come up recently. Students are being blamed for causing that behaviour, and there is no doubt that students are involved. We will bring a submission to you on that. However we have been talking to the Housing Executive for some time about a partnership approach between ourselves and institutions close to students. There is no doubt about it; the Housing Executive just seems to be unwilling to engage. They are probably stretched and their management time is limited.

194.

This document, 'Student Housing in Northern Ireland: General Consumer Council 1998', which we thoroughly recommend, has a whole range of proposals, and it would be quite an interesting exercise to tick them off - particularly regarding the Housing Executive's responsibilities and what organisations it has engaged with. We have been frustrated by this, and any help you might give to encourage the Executive to work with bodies such as ourselves would be most appreciated.

195.

The Chairperson: Could you give us some idea of student numbers? Are they rising or falling? Will the problem of HMOs get worse in the near future?

196.

Mr P O'Neill: We estimate that 13,000 students are currently living in HMOs, most of which are category B accommodation. Student numbers are set to increase. You may be aware of what the Minister of Further and Higher Education, Training and Employment, Mr Farren, has done. Approximately 5,500 students will arrive on campus in the next three to four years; demand is still growing. We suspect that more of those students who traditionally went "across the water" to study - to Scotland in particular - may be forced to remain locally.

197.

There will be increased pressure on institutions to provide more housing to cover that demand. There is a limit on how much accommodation colleges can provide. To be fair, more and more students are studying while living at home with their parents, but we anticipate we shall still be left with a significant increase in numbers seeking private rented accommodation. It is difficult to predict, and the Housing Executive could perhaps do more work and help us look at the projections. Within the next two to three years we believe there could be upwards of 16,000 students living in HMO properties throughout Northern Ireland. I feel that is a reasonable estimate.

198.

The Chairperson: We previously spoke to the district councils. How might we speed up the inspection and licensing of HMOs? Would district councils be the proper bodies to ensure that recommendations are enforced? They are clearly concerned that having the Housing Executive as landlord and enforcer is not a proper situation.

199.

Mr Slevin: It is a matter of finding out where HMOs are, gaining access to them and identifying the landlords who might have multiple properties. They work with institutions such as Queen's University, the University of Ulster and the student unions, for the situation might be described as one of mandatory versus voluntary.

200.

Good landlords will do their best to promote themselves; they work very closely with the academic institutions, and there would be no problem correcting the defects of their accommodation. However, accommodation officers in universities and colleges know the landlords, having databases of them and their properties. Through working with them, the officers have a fair idea of exactly what is there.

201.

The Chairperson: Thank you very much; it has been very interesting. We shall take up that issue with the Housing Executive. Our relationship with them is extremely important to us. Thank you very much for your time.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr K Butler ) Northern Ireland Co-ownership

Ms Patterson ) Housing Association Limited

202.

The Chairperson: Welcome to the Committee. We are hoping to work to a format of 10 minutes for presentation, followed by some questions.

203.

Mr Butler: Thank you for the invitation and the opportunity to speak to you today. I do not intend to speak for very long because we did not have much to say in the submission that we made to you as we are not directly involved in this matter. We are just giving an opinion from a professional point of view. I would like to make the following brief points in light of our submission.

204.

On Large Scale Voluntary Transfers (LSVTs) from the Northern Ireland Housing Executive (NIHE), it is important first of all to assess the potential in Northern Ireland terms. What should be the criteria for potential LSVTs in terms of stock? What, if anything, is to be included in the stock to be transferred? How many properties are involved and what is their location? By location, I mean areas of high demand and so forth.

205.

Secondly, there is the matter of new types of landlord - housing associations or private management companies. It could be argued that housing associations would be setting themselves up as mini housing executives, as at the moment they have a development function. In taking on transfers of stock they would become developers and managers. At the moment they do not really have a large-scale management role - they simply develop, and manage what they develop.

206.

Private management companies - another type of landlord - are simply created for the sole purpose of managing and maintaining groups of properties. Thought must be given to support those likely to be affected, including the NIHE tenant base and those on the common waiting list for accommodation.

207.

Essentially we start from the position that any transfer of housing stock to another landlord should, as a minimum, leave the tenant no worse off. Ideally, it should offer some benefit to the tenant. It is also be important to ensure that regardless of who the landlord is, tenants should have access to the same standard of service, and that landlords should be equally and severally accountable for providing that service. That would entail a significant commitment to consulting with tenants and to managing and monitoring the service. Through the Department for Social Development, the NIHE and the housing association movement, there already exist established performance standards for social housing management, mechanisms for the control and accountability of social landlords, and regional and local housing policy - an integrated strategy for programme delivery.

208.

In looking at the rights of housing association tenants to buy their properties, the Programme for Government - and I am sure everybody quotes that document - aims to ensure that everyone has the opportunity to access decent affordable housing in the tenure of their choice. The Northern Ireland Co-Ownership Housing Association is the only housing association registered in Northern Ireland that does not provide housing for rent. As a specialist shared ownership association, proposals for the right to buy do not directly apply to us. In fact, it could be said that our purpose is to acquire properties on behalf of our applicants and then encourage them to remove them as quickly as possible from our stock by increasing their share and becoming full owners of the properties.

209.

I understand that the Northern Ireland Federation of Housing Associations is developing proposals on right-to-buy and that witnesses will shortly appear before the Committee on this matter. Our comments therefore relate to the importance of clarifying the ultimate policy objective. Is it to enable people to buy affordable homes or - more specifically - to buy homes in which they currently live? To what extent should policy and the public purse support property choice as well as tenure choice?

210.

The main low-cost home ownership initiatives in Northern Ireland, which are the Housing Executive's tenants' sale scheme and the co-ownership equity sharing scheme, are well established in part of the local culture. Concerning co-ownership, both Housing Executive and housing association tenants are already assessed on an equal footing. People may not however purchase through co-ownership the property in which they currently reside. If this inquiry results in changes to the mechanism for tenant purchases, there may perhaps be a future role for the co-ownership scheme in assisting some tenants to buy their current home.

211.

Mr ONeill: Mr Butler queried the use of public funds in allowing housing association tenants the right to buy their own property. I did not pick up on what you said. Can you expand on that? It was the reason why public money should be spent. Should it be spent because of where people want to live, or should it be because of their choice of property? Was it to enable people to buy houses or was it to enable people to buy the houses that they currently live in?

212.

Mr Butler: Yes. The question is whether public money will be used to allow people to buy their current home. In other words, will public money be used to help social housing tenants to buy a unit of social housing or will it be used to encourage them to buy another property on the open market? In buying the properties they currently live in, tenants are heading for home ownership but they are also removing a social housing unit from stock. We are asking if that is the only way to help them. Is buying their own homes the only way for social housing tenants to become home owners, or will they be offered some other boon or assistance to enter home ownership? I am just raising that question.

213.

The Chairperson: Thank you very much.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr M Watt ) Northern Ireland

Ms F Stewart ) Tenants Action Project

214.

The Chairperson: Good afternoon. The Committee will listen to your presentation and then ask questions.

215.

Mr Watt: All I will do is add a few observations that are inherent in the submission that we have already made. The comments we submitted, and the comments that we are making today, come from discussions with our own staff team and represent the views of the Northern Ireland Tenants Action Project (NITAP). We are pleased to have this opportunity to meet with you, particularly given the issues under consideration. I hope that these will form part of the new housing Bill.

216.

I will deal with large-scale voluntary transfers first. It is an interesting issue, and one that perhaps has not been given serious consideration in Northern Ireland before. Our organisation is glad to have the opportunity to broaden the scope of the housing debate. It is probably true to say that the large-scale voluntary transfer has become a central plank of the UK Government's housing policy. So much so, in fact, that a lot of commentators and, indeed, politicians in GB are describing it as the death knell of the local authority as major landlord.

217.

There is no doubt that it is an important tool in tackling major housing finance and management issues. Indeed, many authorities have gone the whole way to transferring their stock out of their own ownership, either to arm's-length management companies or other registered social landlords. The city of Coventry transferred some 40,000 properties in one fell swoop. At the same time, it is not such a bed of roses for the city of Glasgow. The transfer there has not gone through yet, despite the fact that the Bank of Scotland has offered £1·6 billion as part of the refurbishment package. They are talking about 90,000 houses.

218.

I was fortunate early in my career to work for Dundee District Council, which was pioneering stock transfer in the city at that time. I worked on a team that established the first par value housing co-operative in the city, along with a range of other initiatives intended to regenerate an estate on the periphery of the city. Plenty of lessons were learned from that particular exercise. The most telling one for myself, and the one that most informs the job that I presently do with NITAP, is the importance of investing time and resources in bringing local people along with the whole process. In fact, we transferred the ownership of a major part of the estate to a par value co-operative, meaning that tenants themselves took over not just the management but also the physical ownership, through the £1 share of the estate.

219.

I read yesterday that in Alton Park Estate, a 3,000-house estate in Wandsworth, south London, the residents have formally taken over the management of all housing services. That process was started six years ago. If we are talking about any kind of stock transfer - large-scale, voluntary or otherwise - there is going to be a fairly long lead-in period, particularly when one of the goals is to bring the local residents, be they tenants, owner-occupiers or others, along with the process.

220.

Some of the press speculation that I have seen in recent weeks probably prompted the view of large-scale voluntary transfer as a threat to the Housing Executive. My colleagues and I do not view it as such. We see it as an opportunity for housing and other professionals to get together with local people in order to establish the most appropriate mechanisms for the delivery of housing services and other services that are appropriate to the needs in their areas.

221.

It is worth restating that the Housing Executive has gone some way in pioneering resident involvement in services, both through the community involvement framework, which NITAP is pleased to support, and also through community participation compacts, which are emerging in most districts. There are increasing opportunities for residents to influence and shape services. The logical conclusion of that will be some form of stock transfer. If residents and other bodies want to go down that avenue, NITAP will be keen to support and facilitate that.

222.

With regard to the right-to-buy for housing association tenants, I hesitate to add further to what we have already said. I do not know whether it is a moot point at this stage; in the housing law reform in Great Britain there is a proposal to produce a bill by 2002-03 that would create single tenancies for all social housing. I anticipate a single tenancy for social rent, and it will include continued right-to-buy. Whatever comes out of these deliberations or out of the United Kingdom housing policy, NITAP is keen to ensure that housing associations are not punished for having good stock by losing that stock through right-to-buy. Some mechanism for protecting or compensating associations will be put in place.

223.

Mr Tierney: Can you develop what you said about the housing association? Are you supporting the right to buy?

224.

Mr Watt: There are compelling reasons to support extending the right to buy to housing associations, not least the fact that when the associations took over the new build responsibility from the Housing Executive, it created a two-tier situation. Some tenants in the rented section have the right to buy and others do not. That is an anomaly that ought to be addressed.

225.

If we are talking about stock transfer at the same time, housing associations in the rest of Great Britain have had their stock swelled through stock transfer from local authorities. That is one of the reasons why the discussion on the extension of right-to-buy to housing association tenants has been introduced. There are compelling reasons for doing that. However, the smaller associations, which manage some very good stock, need to be protected so that they do not lose all that stock under right-to-buy, particularly if discounts are offered at similar rates as have been offered in the public sector.

226.

Mr Tierney: If you accept the argument over right-to-buy, some smaller associations may suffer. You cannot give people in larger associations the right to buy and prevent those in the small associations from buying. That is discrimination.

227.

Mr Watt: Larger associations may also suffer, but they have a greater development capacity and so can absorb losing some of their stock through right-to-buy. The smaller and more specialist housing associations are most at threat. I would be loath to see any association losing its stock without having some kind of compensation mechanism in place.

228.

Mr B Hutchinson: People have the right to buy houses - a measure to try and change housing stock that was introduced by the Tories - but social housing is still required for a lot of people. How would you look after areas of high demand for social housing? If lots of properties are sold in those areas, then the need cannot be fulfilled. Should there be some form of protection for special needs housing? Should it not be sold?

229.

Mr Watt: Special needs housing needs to be protected in the rented sector so that it continues to be made available to those who need it. The experience of the Housing Executive is that changing family circumstances have left some older person's dwellings (OPD) in the hands of people who would not otherwise have qualified for them. We need to make sure that the proper kind of housing is available to those who need it.

230.

I am not convinced that the housing associations in Northern Ireland are sufficiently advanced to take the high demand areas and regeneration strategies on board - they are not advanced as their counterparts in Great Britain. However, I look forward to the time when they are. The Housing Executive has done a lot of regeneration and redevelopment work, but there is still a lot to be done and, in the absence of any others, the Housing Executive is the most appropriate mechanism for doing that.

231.

The Chairperson: The housing association is in a different position from the Northern Ireland Housing Executive as regards right-to-buy. Housing associations borrow money, and a lot of that money is borrowed on the presumption that rental streams will continue for a number of years. Is there some sort of compensation for housing associations if they lose their stock?

232.

You are talking about small groups of tenants taking over 5,000 to 10,000 houses throughout the Province. Would the administrative costs of large-scale voluntary transfers (LSVT) be enormous? Would there be 30 chief executives and 30 housing executive boards instead of one? What would be the benefit of that? The Housing Executive has 130,000 properties. What would be the benefit of breaking that down into 30 or 40 small housing associations?

233.

Mr Watt: I am not sure that there are huge financial benefits.

234.

The Chairperson: The idea of LSVT is the accrual of financial benefit for the Housing Executive. That is the motivating force across the water - go for LSVT and lever in private money.

235.

Mr Watt: It is designed to lever in private money, but also to allow the public contribution to continue to -

236.

The Chairperson: We can do that. Consumer panels and such things have been set up, and the Housing Executive can be made more democratic without touching its financial structure. The motivating force for LSVT across the water is to lever in private money - that is the whole key.

237.

Mr Watt: It is one key. I think that -

238.

The Chairperson: Is it not the motivating key?

239.

Mr Watt: The motivating key in the 1980s was to remove housing from local authorities, primarily because central Government was involved -

240.

The Chairperson: I know that; that was an ideological argument in the 1980s. I am talking about today. This is a Labour Government - even though it is hard to tell the difference between this Government and a Tory Government. The motivating force today is to lever in private money.

241.

Mr Watt: In England - not so much Scotland or Wales - the interests that resulted from the merger of the smaller housing associations into larger associations are less to do with small housing management issues. It is more to do with asset management, huge investment portfolios, the ability to borrow on the properties that they already own - particularly where some of those have come from good quality local authority stock - and the ability to borrow and act as businesses.

242.

Moves are afoot to do away with voluntary boards in certain associations, replacing them with paid boards so that the associations no longer act as such but as private rented landlords. There may be a desire on the part of the Government that associations be allowed to use part of the housing stock currently owned by the Housing Executive as an asset against which they could borrow. There may be benefits - social rather than financial - in pursuing resident management or ownership of the housing stock.

243.

To use the other side of the argument, it is a matter of creating a stakeholder democracy, where people have physical and financial ownership of the areas in which they choose to live so that they feel a greater sense of stewardship. One suspects that those social benefits from more sustainable use of the environment will have additional - if perhaps hidden - financial costs. There is another side to that equation, though it is very difficult to quantify at this stage.

244.

Mr ONeill: You made a number of points about the benefits of large-scale voluntary transfer, but more points against it.

245.

Mr Watt: I am glad that you spotted that.

246.

Mr ONeill: I am sure that all the points are interesting. However, from your point of view representing the tenants, which is better for them? Is it better to deal with a unitary housing authority that has a consistent set of rules and standards - I am in danger of revealing my own bias here - or to be in a multifaceted situation wherein one encounters different kinds of regimes?

247.

Mr Watt: I would love to be able to say that it is a little of both. There are certainly benefits. The history of the Housing Executive and the quality of service it provides are arguments for maintaining it. NITAP has seen the other side, in the relationship between the 37 district offices and individual consumer panels. Each district and group of community and tenant representatives works out its own ways of interacting with each other and has its own priorities for service improvements and adaptations.

248.

If the standards and expectations of the service are consistent, one obviously requires a unitary authority to apply them, such as the Housing Corporation in England, Scottish Homes in Scotland or Tai Cymru in Wales. There is certainly a role for Paddy McIntyre and his colleagues in the Housing Executive in ensuring that the standards set can be monitored, evaluated and enforced. The mechanism for delivery could differ from Strabane to Castlereagh if those providing and receiving the service have agreed on it in order to respond to local needs and demands.

249.

Mr ONeill: Does that degree of satisfaction have anything to do with your remark that tenants' groups have not shown as high a level of interest in taking control of their own estates or even environment? From dealing with tenants as you do, do you feel that that reflects a degree of satisfaction with the housing service they receive, or are there some other reasons why that has not happened here?

250.

Mr Watt: On the one hand, if the Housing Executive's own research on the matter can be believed - and I believe it can - there is a high level of satisfaction with its services. On the other, the question of stock transfer has not yet arisen in the Province. Consideration has not been given to this matter. It has been very much a GB issue, rather than a Northern Ireland one. It has not developed organically out of our methods of providing public sector housing. If other considerations are brought to bear, such as the desire to lever private finance into public sector housing, then that changes the ground considerably. I can see some appetite for people providing the housing service themselves, rather than parachuting in a registered social landlord from another part of the Province or the United Kingdom.

251.

Ms Stewart: To be fair, the disadvantages were mentioned. There are uncertainties and, as an organisation, we recognise that. As you said, the framework of compacts and consumer panels we are now working in has opened that up and formalised many of those arrangements. However, if a choice is given, how will that choice be made? There will be a big difference in the way that groups operate, particularly in urban areas compared to rural areas. Mainly people are satisfied with the service that is being provided through the compacts, but if choice is involved, how do we ensure that they are properly informed and trained to undertake that?

252.

The Chairperson: We have had representations from student organisations. They have no formal links with the Housing Executive. Do you have a working relationship with students to make representation on their behalf to the Housing Executive?

253.

Mr Watt: If any of the student unions wished us to raise an issue, either with the individual consumer panel or their central community advisory group, we would be pleased to discuss that with them.

254.

Finally, I have a draft copy of a community participation compact that has been agreed between the Housing Executive and us. I will leave a copy for your information.

255.

The Chairperson: Thank you. That was very interesting.

MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr K Butler ) Northern Ireland Co-ownership

Ms Patterson ) Housing Association Limited

256.

The Chairperson: Welcome to the Committee. We are hoping to work to a format of 10 minutes for presentation, followed by some questions.

257.

Mr Butler: Thank you for the invitation and the opportunity to speak to you today. I do not intend to speak for very long because we did not have much to say in the submission that we made to you as we are not directly involved in this matter. We are just giving an opinion from a professional point of view. I would like to make the following brief points in light of our submission.

258.

On Large Scale Voluntary Transfers (LSVTs) from the Northern Ireland Housing Executive (NIHE), it is important first of all to assess the potential in Northern Ireland terms. What should be the criteria for potential LSVTs in terms of stock? What, if anything, is to be included in the stock to be transferred? How many properties are involved and what is their location? By location, I mean areas of high demand and so forth.

259.

Secondly, there is the matter of new types of landlord - housing associations or private management companies. It could be argued that housing associations would be setting themselves up as mini housing executives, as at the moment they have a development function. In taking on transfers of stock they would become developers and managers. At the moment they do not really have a large-scale management role - they simply develop, and manage what they develop.

260.

Private management companies - another type of landlord - are simply created for the sole purpose of managing and maintaining groups of properties. Thought must be given to support those likely to be affected, including the NIHE tenant base and those on the common waiting list for accommodation.

261.

Essentially we start from the position that any transfer of housing stock to another landlord should, as a minimum, leave the tenant no worse off. Ideally, it should offer some benefit to the tenant. It is also be important to ensure that regardless of who the landlord is, tenants should have access to the same standard of service, and that landlords should be equally and severally accountable for providing that service. That would entail a significant commitment to consulting with tenants and to managing and monitoring the service. Through the Department for Social Development, the NIHE and the housing association movement, there already exist established performance standards for social housing management, mechanisms for the control and accountability of social landlords, and regional and local housing policy - an integrated strategy for programme delivery.

262.

In looking at the rights of housing association tenants to buy their properties, the Programme for Government - and I am sure everybody quotes that document - aims to ensure that everyone has the opportunity to access decent affordable housing in the tenure of their choice. The Northern Ireland Co-Ownership Housing Association is the only housing association registered in Northern Ireland that does not provide housing for rent. As a specialist shared ownership association, proposals for the right to buy do not directly apply to us. In fact, it could be said that our purpose is to acquire properties on behalf of our applicants and then encourage them to remove them as quickly as possible from our stock by increasing their share and becoming full owners of the properties.

263.

I understand that the Northern Ireland Federation of Housing Associations is developing proposals on right-to-buy and that witnesses will shortly appear before the Committee on this matter. Our comments therefore relate to the importance of clarifying the ultimate policy objective. Is it to enable people to buy affordable homes or - more specifically - to buy homes in which they currently live? To what extent should policy and the public purse support property choice as well as tenure choice?

264.

The main low-cost home ownership initiatives in Northern Ireland, which are the Housing Executive's tenants' sale scheme and the co-ownership equity sharing scheme, are well established in part of the local culture. Concerning co-ownership, both Housing Executive and housing association tenants are already assessed on an equal footing. People may not however purchase through co-ownership the property in which they currently reside. If this inquiry results in changes to the mechanism for tenant purchases, there may perhaps be a future role for the co-ownership scheme in assisting some tenants to buy their current home.

265.

Mr ONeill: Mr Butler queried the use of public funds in allowing housing association tenants the right to buy their own property. I did not pick up on what you said. Can you expand on that? It was the reason why public money should be spent. Should it be spent because of where people want to live, or should it be because of their choice of property? Was it to enable people to buy houses or was it to enable people to buy the houses that they currently live in?

266.

Mr Butler: Yes. The question is whether public money will be used to allow people to buy their current home. In other words, will public money be used to help social housing tenants to buy a unit of social housing or will it be used to encourage them to buy another property on the open market? In buying the properties they currently live in, tenants are heading for home ownership but they are also removing a social housing unit from stock. We are asking if that is the only way to help them. Is buying their own homes the only way for social housing tenants to become home owners, or will they be offered some other boon or assistance to enter home ownership? I am just raising that question.

267.

The Chairperson: Thank you very much.

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MINUTES OF EVIDENCE

Tuesday 1 May 2001

Members present:

Mr Cobain (Chairperson)

Ms Gildernew(Deputy Chairperson)

Mr B Hutchinson

Mr ONeill

Mr M Robinson

Mr Tierney

Witnesses:

Mr Mills )

Mr Corr ) Council of

Ms McCormick ) Mortgage Lenders

Mr Heywood )

268.

The Chairperson: Welcome to the Committee. You will have 10 minutes for your presentation, after which there will be questions.

269.

Mr Mills: Our members hold 98% of the mortgage assets in Northern Ireland and we are interested in the issues that the Committee is discussing. We welcome the opportunity to be involved in this public policy debate.

270.

Sandra McCormick is from the Ulster Bank. Andrew Heywood is a member of the Council of Mortgage Lenders committee. He looks after the committee's interests in Northern Ireland as well as the regional committees in Scotland and Wales and is therefore aware of regional issues across the UK. Dan Corr is a long-standing member of our committee and former chairman who is with Nationwide. I am the most recent appointee to the chair.

271.

Mr Heywood: It is good to be here at a point when we can make a modest contribution to the longer- term strategic debate. We are not here because of a crisis in social housing in Northern Ireland or because of widespread dissatisfaction with social housing providers, unlike in other parts of the UK. Social housing in Northern Ireland is generally of a higher quality than elsewhere in the UK. The main provider of that housing, the Northern Ireland Housing Executive, is respected and has community support.

272.

We have the chance to offer a few thoughts on the preparation of the longer-term strategic view of the future of the Northern Ireland Housing Executive, stock transfer and the associated issue of the right to buy and housing association tenants.

273.

I would like to draw on the UK experience of Large Scale Voluntary Transfers (LSVTs). That is one of the options worth serious long-term consideration. LSVTs have perhaps been the biggest development in social housing in the UK. Over 500,000 homes have been transferred to registered social landlords and about £21 billion of private finance has been levered in via those transfers.

274.

Approximately 115 different lending institutions are involved in that transfer process. Most stock transfers have taken place in England. However, Scotland is preparing its own transfer programme and the issue is under debate in Wales. Without going into too much detail, stock transfer offers advantages that make it worth consideration by the Committee. LSVTs enable private finance to be levered in because landlords are outside the public sector borrowing requirement (PSBR). When public finance is limited, LSVTs provide an opportunity to meet the backlog in repairs and improvements to social housing. In England, for instance, that backlog was estimated at £19 billion.

275.

Transfers also mean that public investment is protected by not-for-profit regulated organisations. That regulation is important. Tenant participation is maximised, as is local accountability. Tenants are the most important people in the scheme, and there is evidence that they are generally more satisfied with housing association landlords than with the old local authority landlords -survey evidence can support that.

276.

The situation in Northern Ireland is different to that in the UK as a whole. As I have already mentioned, public sector housing in Northern Ireland is generally better than private sector housing when it comes to matters such as stock condition and age. Public sector housing in Northern Ireland also tends to be better than analogous stock in England. The horrendous backlogs that have made the matter more urgent elsewhere are not an issue in Northern Ireland. The Northern Ireland Housing Executive has also been perceived as a sound landlord, taking a strategic view that ensures high quality of provision.

277.

There is not the same urgency for stock transfer or any other major change in social housing organisation as there is elsewhere. Nevertheless, long-term options do need to be considered, and the reasons are as follows. One of the reasons that Northern Ireland public housing is better than elsewhere in the United Kingdom is that per capita spending has tended to be higher in Northern Ireland than elsewhere in the United Kingdom and we have to ask ourselves whether, in a more normalised environment, that is going to continue to be the case, or whether there will progressively be a need to bring in private finance to supplement public finance over the longer term. That is clearly a political judgement that has to be made, but it is an issue that at least has to be looked at.

278.

Secondly, the Northern Ireland Housing Executive (NIHE) is shrinking as a landlord because it does not have new build and because of the effects of the right to buy at around 4,500 per year. Sooner or later the question of economies of scale will mean that there will be some sort of a debate along the lines suggested by the Department of the Environment policy review document from 1996, 'Building on Success'.

279.

Also unlike elsewhere in the United Kingdom, NIHE provides 85% to 90% of social housing in Northern Ireland. There is not the plurality of provision between different local authorities and between the local authority and registered social landlord (RSL) sector that you get elsewhere, so in that sense there is no element of tenant choice and no element of competition to drive up standards. It may be well worth looking at that in the longer term.

280.

Not all options to bring in private finance - if that were to be one of the major considerations in terms of making changes to the role of NIHE - would necessarily involve stock transfer. In our limited experience we have come across various options that have been canvassed. The notion of "arms length" companies is one, as I am sure you are aware, that has been promoted by Nick Raynsford, the Minister for Housing, Planning and Construction, by which local authorities set up a wholly-owned company which then gives them a certain amount of discretion over borrowing.

281.

It provides a degree of discretion and there may be certain management advantages in it. However, it is at the moment an untried option in that no English local authority has yet managed to successfully get through the hoops that the Government has set. There are some signs that the Government is likely to relax those, so we may see some movement in the direction of "arms length" companies over the next year. However, a major problem is that while they create a certain amount of relaxation in borrowing, they do not circumvent the PSBR.

282.

I have also heard private finance initiatives (PFI) being canvassed. PFI as you know is a system by which the risk of providing a service is taken by a private provider while the public authority tends to retain ownership. PFI in housing terms would presumably mean that the tenants remained as NIHE tenants but services would be offered by a private provider on a long-term basis.

283.

As you may be aware, the Government has set up eight pathfinder projects in England to examine this as an option. At this stage it remains an untried option and in the view of some it could prove to be an expensive one. That said, it cannot be ruled out at this stage.

284.

There have also been discussions about changing the status of the NIHE itself to enable it to become independent of the PSBR. That is quite interesting. One could have a halfway house perhaps, such as a public corporation like the Post Office, which would not give all the advantages of being outside the PSBR but would give some flexibility. One could take it further and reconstitute the NIHE as a huge registered social landlord with borrowing powers. However, that would raise questions about whether it would be publicly accountable enough to continue with its strategic role, which, most people would agree, has been an important one over the years of its existence.

285.

It would then be one huge semi-privatised organisation sitting amongst 40-odd very small housing associations. Quite how the balance of that would work would have to be thought about quite carefully.

286.

There are a number of options and clearly none of them could be sensibly ruled out at this stage. I suggest that, from looking at longer term needs, the role of the NIHE could be maintained as a strategic housing authority, but not necessarily as a landlord, depending on how one views that.

287.

The option of stock transfer to a number of registered social landlords in the future could be worth considering because it provides a means to lever in private finance; it offers tenant participation; it offers a regulatory framework to give tenants confidence. It would also help build up the housing association sector, particularly if some of the existing organisations are involved. The housing association sector in Northern Ireland is small compared with elsewhere in the UK. At this stage we would ask you to consider that option. It has a track record that makes it worthy of serious consideration.

288.

If you recall, we gave evidence in December on the right to buy issue, and I will update that now. It was not apparent then that if the voluntary purchase grant, that is currently given to housing associations who voluntarily operate the right to buy to refund them the discount that they give to tenants, would be extended if the right to buy was extended to housing association tenants. Clearly, that move by the Department for Social Development makes a major change to that situation in that it largely, in our view, removes the fear of lenders security on housing association assets being eroded, or housing associations ending up with a debt that they could not service.

289.

You may still wish to argue as to whether there could be some short-term cash flow problems for associations in that situation, but, clearly, it removes major short-term concerns. We would make one longer-term point about the right to buy - at the present time the voluntary purchase grant is not a huge burden on public expenditure. However, if the right to buy was extended it would become a burden, and if public expenditure constraints became stricter it could become a tinge and, perhaps, something of a distorting factor. That must be looked at in more detail.

290.

However the right to buy might become a large burden if the stock transfer, or a similar option, was entered into. The number of properties susceptible to voluntary purchase grant through the right to buy would grow dramatically. That could lead to the awkward position of either withdrawing voluntary purchase grants to avoid distorting other priorities - that could place some registered social landlords in difficulty - or sticking with it and potentially soaking up a significant proportion of the housing budget. Therefore it is simply a longer-term word of warning in that direction.

291.

Ms Gildernew: You talked at length about the benefits of LSVT. What are the disadvantages?

292.

Mr Heywood: There are two perceived disadvantages. The first is stated as being the loss of immediate local democratic accountability. In UK terms that would be where housing is controlled by democratically elected local authorities and it could be argued that there is direct democratic control. It is an overstated argument, because boards of registered social landlords typically have a third local authority and direct tenant representation. The situation here is different. However, that is the most commonly stated disadvantage.

293.

The other disadvantage - and again it is overstated - is that the landlord and strategic functions are disconnected. In other words, a local authority might still have a strategic function with regard to housing, but will not act as a landlord. Some people view this as a disadvantage while others would disagree on the basis that to properly exercise a strategic role across both the private and public sectors a local authority ought to be able to stand back.

294.

An analogous argument could be applied to the NIHE. Those are the two most commonly stated disadvantages, but I am sceptical of their significance.

295.

Ms Gildernew: A concern about the lack of affordable social housing was expressed in other submissions to the Committee. Do you share this concern?

296.

Mr Heywood: If there is to be an increase in the supply of affordable social housing, the ability to lever in private finance could act as a means of meeting housing needs if public expenditure constraints were to tighten in the future.

297.

Ms Gildernew: Does it concern you that although rent increases are capped for the first few years, there have been significant rent increases in properties across the water?

298.

Mr Heywood: In the past, some RSL rents have risen more quickly than local authority rents. However, the Westminster Government aims to bring RSL and local authority rents into line over the next 10 years. If a large-scale transfer were to take place this side of the water, it is presumed that the Department for Social Development would try to create some sort of continuity here too.

299.

Ms Gildernew: Finally, if the Department for Social Development were to have a role in maintaining rent levels inside a fixed rate, would LSVT private bodies become less attractive?

300.

Mr Heywood: That has not been the case until now. The RSLs are not-for-profit bodies anyway, though they need to viable. There is a general confidence that they will be able to meet those targets of converging rents while remaining viable.

301.

The lenders have fairly narrow margins on social- housing lending, but most RSL business plans appear to be robust enough to be able to service their borrowing, meet their costs, and meet their targets.

302.

Ms Gildernew: We do not have firm evidence that they have maintained rents at reasonable rates. According to some of the figures we have received, there have been increases of 60%-70%.

303.

Mr Heywood: As with the local authority sector, there have been occasional problems with housing associations that have not performed as well. For instance, that is one of the reasons why the Housing Corporation has been overhauling its regulation of RSLs. We are moving towards a situation in which the Government will require closer convergence on rents, therefore it will be important to have a regulatory regime to ensure efficiency and viability. Any move towards stock transfers in Northern Ireland ought to be made in adherence with the regulatory regime to ensure that that is adequate to the task.

304.

Mr ONeill: Mr Heywood, in your comments on stock transfer you said that Northern Ireland lacked an element of competition to drive up standards. On the other hand, you spent a good deal of time praising housing standards here. Are you saying that there is no need for us to use a model that, when applied in England, has not resulted in such high standards? Should we argue for the retention of the system that has produced these good standards, which were outlined by the Housing Executive high quality relationship with tenants, good quality of building, et cetera?

305.

Mr Heywood: I take your point. One of the underlying factors in Northern Ireland has been higher level of per capita public expenditure - for understandable reasons - over quite a long period. That has made a difference. The NIHE has performed well. However, because something has performed well does not necessarily mean that you do not look at experience elsewhere to see whether there are possibilities of making it perform better. It may be that increased competition and plurality of provision will provide fertile ground to promote new ideas and create an impetus for a general raising of standards.

306.

Mr ONeill: The converse of that is patently true as well. If something works, why change it?

307.

Mr Mills: All of us who live in Northern Ireland are proud of what the Housing Executive has achieved. Our perspective is that we are now moving into a different era for public funding in relation to housing. We are lucky to have the time to sit down and think about this in a controlled way. It will probably be some years before the crisis develops, if it does develop. The current debate is therefore very welcome, and I suppose that we all feel that things are changing. The members in this room probably agree that aspects of public funding are also changing.

308.

From a personal perspective, RSLs appear, on the surface at least, to operate in a very similar way to housing associations. We have had very good experience of housing associations in Northern Ireland. We have a good record of managing housing through the NIHE, and, therefore, we have competent housing associations, by and large. It is not beyond the bounds of possibility that we could have an orderly transfer to these RSL-type bodies and that, through them, we could achieve efficiency in social housing and keep rents under control.

309.

We share the concerns - but lenders are not in this business just to make money. As Andrew Heywood said, although lenders are not lending at a loss, they are lending on very tight margins. Frankly, there are probably more profitable ways to use the money. However, it suits all of us to have an orderly housing market, and we are happy to help in that. If you look at the list of lenders you will see that quite a number of people do not appear on it, because they have not taken part in this kind of funding before in Northern Ireland - certainly not with housing associations. It is not necessarily something that all lenders would want to do, because it is not a hugely profitable activity. We just need to find a mechanism by which they can contribute, and we can encourage them to contribute, to help the future provision in Northern Ireland.

310.

Mr ONeill: I can see that lenders would have considerable interest in the stability of the housing market and in encouraging people out of public-owned houses and into private capacity, where perhaps they will eventually move into the higher market thus keeping the business ticking over. I can understand your interest. However, how far does your commitment go?

311.

Some time ago a right-to-buy scheme was negotiated - I think by a member of this Committee, Sir John Gorman, when he was chief executive - with lenders to try to give people the opportunity to have mortgages even though their incomes were not, let us say, very high or dependable. The scheme was for people who would not normally be good mortgage- lender material, if you know what I mean - those who would not normally qualify for a mortgage. That was all negotiated and put into place. However, my information is that it is not in place any longer. Perhaps I am wrong.

312.

Mr Corr: You are correct. I worked with Sir John Gorman on that matter in a private capacity. He was a board member of my own organisation. In the private sector, demands are governed by needs. You are quite right; that scheme faded out because of the lack of demand.

313.

The changing environment mentioned by Mr Mills is probably the determining factor in our looking at the whole question of the NIHE in a different light. I suppose that the right-to-buy scheme has been the catalytic factor in all of that in recent years. It has changed the face of the NIHE in that it does not have anything like the same number of properties to govern. The right-to-buy scheme has had a major influence. It has been the catalyst in changing the face of housing in Northern Ireland. It has also changed the NIHE. We are in a changing environment and I agree with Mr Mills that this is a superb opportunity to look at that change.

314.

Mr ONeill: Would you be interested in such a scheme?

315.

Mr Corr: Are you saying that there is a need?

316.

Mr ONeill: If a need were identified, would you be interested?

317.

Mr Mills: We would certainly consider it.

318.

Ms McCormick: It is something that would need further investigation, but all lenders would carry out responsible lending practices. We still need to know if we are doing people a favour by helping them get into a scenario that we would not normally encourage. That would need to be carefully defined.

319.

Mr ONeill: That is a general question. I am not necessarily making an argument for or against it.

320.

Ms McCormick: In my organisation we do quite considerable lending for the right-to-buy scheme, where the criteria are not black and white. We also look at the grey cases and analyse those on a case-by-case basis, always adhering to our principles of responsible lending.

321.

Mr B Hutchinson: I believe that you are right, Ms McCormick. However, as decision-makers and elected representatives, we have to look at the social benefits involved. If a right-to-buy scheme were in place, would that just move someone from a maintenance list? We must look at that also.

322.

One of my concerns about the right-to-buy scheme is that we have social housing in particular areas where there is high demand and if we were to sell those houses we would end up with nowhere to house people. The other disadvantage is that there would be areas where there is no demand. By doing this, you would be in many ways - though I do not think that ghetto is the right term - making it worse.

323.

Mr Mills: Those are all valid points. We recognise, above all, that there is a limit to the size of the owner buying market. There will always be a need for social housing and we will need to find the best way to fund that. We are in a situation where the Exchequer tends to provide more funding for us for housing than perhaps they have done per capita across the water. If that were to continue, then we would probably not be having this debate. We could take the view that is unlikely to continue and therefore we will have to look for other ways to provide social housing. You are correct, and I think that we, as a group of lenders, will act responsibly in trying to aid that provision.

324.

Mr B Hutchinson: How would you see it operating? If the Department for Social Development were to decide that everybody had the right to buy, people would be coming to your institutions for loans. Would you impose restrictions in particular areas, or would you be advising the Department not to open up that market?

325.

Mr Mills: As Ms McCormick said, all lenders look at individuals, rather than areas. There is no redlining of any area as far as I know, by any of the lenders. We view every proposition on its merits. There is not as much Government support now as there was when the original right-to-buy scheme came out for people who were falling into arrears difficulties. Each person must make his own provision or have insurance.

326.

If we were to encourage people who could not afford to buy houses to do so, that would be acting irresponsibly towards them and towards the market in general. We do not want to get into the situation - as happened in the late 1980s and early 1990s, particularly across the water where there was negative equity - where competition meant that good lending practice went out the window and money was loaned to people who could afford to repay. It is as simple as that.

327.

Mr B Hutchinson: Would you suggest that the Government should give urban development grants and keep mortgages down?

328.

Mr Mills: It is a question of how resources are used. That is probably a for you to determine.

329.

Mr B Hutchinson: It has been successful in areas in Belfast.

330.

Mr Corr: I have taken part in many forums on the subject of housing and finance, and if we were having this discussion in 1988 or 1989, it would be different to the discussion we are having now. At that time recession occurred and it changed our minds dramatically. There is nothing that tightens organisations as much as when they start to lose about £300 million a year.

331.

The Chairperson: Could I just make this point. We are trying to equate Northern Ireland with the rest of the United Kingdom. They are two separate entities, and they face two very different problems. You are correct in saying that Northern Ireland stock is far better than it is across the water. The stock across the water got to levels where the Government was forced to look for private finance, and it levered in huge amounts of private money. We are not in that situation; stock here is relatively good. We discussed that issue today. The Housing Executive pay about £250 million per year in loan debts. That is on a plateau at the moment and will continue to fall quite dramatically over the next five or ten years. That will mean that additional finance will be available to the Housing Executive without touching the PSBR.

332.

There are many factors involved. One is that 80% of Housing Executive tenants claim housing benefit, irrespective of what the rents are. They are completely immune from rent increases. In rental streams, the NIHE is completely different from its counterpart across the water.

333.

I accept your point that we have been cushioned to a certain extent through the recessions and through the PSBR in that housing has been allowed to continue to grow here. We have been very fortunate, but that is not going to continue. Everyone knows that there is going to be a restriction over the next number of years as far as Northern Ireland is concerned. We should not necessarily run out and think that that is going to be an absolute disaster, because it may not be. There is no sense of changing things for the sake of change. Everyone must look at organisations as we go along, because we do not want to remain in a rut. No one is saying that.

334.

There are clear differences between Northern Ireland and across the water, but trying to parachute problems and solutions between here and there may not necessarily be the answer to our problems. We are very fortunate that we have a housing authority, which, to a large extent, has the confidence of tenants. We can work with them. From a purely financial point of view, the situation is not the same as it is across the water.

335.

Mr Mills: We totally accept that. NIHE has the confidence of tenants and the confidence of lenders as well. We see it as a very efficient and effective body.

336.

Mr B Hutchinson: Are there figures for the number of people in England who purchase their houses, which are now being redeveloped, and for which they cannot afford another mortgage? For instance, are there any figures relating to people in their mid-40s who bought the houses that they are now living in from the Government and that are going to be redeveloped, who cannot afford the new mortgage?

337.

Mr Heywood: There are some cities where urban regeneration problems have created difficulties for owners in terms of local authority compulsory purchase, which has then left owners in positions of negative equity. However, that has not particularly been an right-to-buy owner problem. It has been more of a problem in areas where, for a variety of reasons, the community has gone downhill. People may have bought houses for £25,000 to £30,000 - the compulsory purchase value can be as low as £8,000 - and suddenly people are in serious difficulty.

338.

Salford, in Manchester, is one case in point, as is Sunderland and parts of Newcastle. However, it is not particularly a right-to-buy problem as far as I am aware.

339.

The Chairperson: Thank you very much. That was very interesting.

MINUTES OF EVIDENCE

Thursday 3 May 2001

Members present:

Mr Cobain (Chairperson)

Sir John Gorman

Mr B Hutchinson

Mr G Kelly

Mr O'Connor

Mr ONeill

Mr M Robinson

Mr Tierney

Mr S Wilson

Witnesses:

Mr J Gartland ) The Chartered

Ms J Hunter ) Institute of

Mr J Perry ) Housing in

Mr K Walsh ) Northern Ireland

340.

The Chairperson: Good afternoon and welcome to the Social Development Committee.

341.

Will members declare their interests?

342.

Mr B Hutchinson: I declare an interest. I am a voluntary member of Filor Housing Association.

343.

Mr Walsh: I would like to introduce the delegation and state who and what the Chartered Institute of Housing (CIH) is and its role in Northern Ireland. I will then highlight some of the recommendations from the written submission. Janet Hunter is the director of the housing rights service and a member of the Northern Ireland branch of the institute. John Perry is the director of policy for the institute throughout the UK. John Gartland is the Chief Executive of the Ulidia Housing Association and also the Northern Ireland member on the UK council of the institute.

344.

The institute is a professional body for people who work in social housing, with a membership base of 17,500 throughout the UK, divided into various regions and co-ordinated on a branch structure with voluntary members contributing through that branch. Northern Ireland has the smallest branch but is the institute's response to the devolution agenda, and, with the support of the then Department of the Environment, the institute received funding to facilitate the setting up of an office in Northern Ireland. I am the director of the office in Northern Ireland, and the office is manned by a policy officer, who is aiding me today, a training and education officer, looking at developing training and education to service the needs of housing staff; and also office administration staff.

345.

The main points of our submission detailed each of the two stages covering the four main items that the Committee enquired about. I propose to go through each of those in turn, highlighting some of the major points from the written submission.

346.

In relation to the private sector renewal proposal, to move from mandatory to discretionary grants, we believe that this is a passive measure and simply replicates the changes that were introduced in England and Wales in 1996. We do not believe that the same dynamics for change exist today compared to 1996. What is required is a housing strategy that meets the needs of all our local community, harnessing the best form of developments in the rest of the UK but reflecting changes in unfitness standards. The CIH believes that expenditure on renovation grants needs to be better targeted so that the households which benefit are those with the worst problems and least able to pay for the necessary work. It is possible to stretch the available funds to a larger number of households by combining partial grant with low-cost loans in a match-funding arrangement. This would give owners an incentive to improve their homes.

347.

Reducing the level of unfitness must become a clear target for Government policy, equivalent to the 10-year target for social housing in the rest of the UK. Without clear objectives the choice of tools at this time appears meaningless.

348.

With regard to houses in multiple occupation (HMOs) and the regulation of the private rented sector, I would state that the proposal to introduce a voluntary licensing scheme for HMOs is welcomed by the institute as a useful first step. The institute agrees that the aim of licensing should be to raise property and management standards but feels that compulsory licensing across the whole private rented sector is required to ensure a better deal for all private tenants, not just those in houses in multiple occupation. It would be a better use of public money, would raise the image of the sector and act as a catalyst for expansion. Licensing needs to be kept simple and cost effective, incorporating an independent appeals process which is not included in the current voluntary scheme to be introduced by the Northern Ireland Housing Executive. Licensing also needs to be seen as an accredition of quality in terms of condition and management. Owing to the size of the sector in Northern Ireland, compulsory licensing is manageable.

349.

Regarding the vagaries of private renting in Northern Ireland, we need to develop a vision for the future, looking particularly at housing conditions, the distinction between controlled and uncontrolled tenancies and the issues of security of tenure and rent.

350.

On large-scale voluntary transfer, the outline proposal by the Department for Social Development is simply to remove the single tenant veto, should stock transfer be proposed. The CIH submission, however, provides a preliminary look at some of the future options against the background of what is happening elsewhere in the UK. Key issues include retaining public confidence in our current delivery mechanisms, the need to harness resources and expertise, levering in private investment, treatment of Housing Executive debt and more modest reforms to current delivery mechanisms. Those reforms could be introduced in the current structures or as part of the development of preferred future options.

351.

On the right of housing association tenants to buy their properties, the CIH does not oppose the extension of the right to buy to all social housing tenants. We want, however, to see reforms which achieve a better balance between the aspirations of individual tenants and the necessity to provide decent rented housing for those in housing need, to be decided according to local strategies.

352.

We propose that discounts should be determined locally, subject to a regional cap. Social landlords should be able to retain the right to buy receipts for housing purposes. We believe that we should investigate quota selling to preserve certain percentages of particular types of housing stock. There need to be tighter rules in eligibility, standardised discount for flats and houses, and exemption for rural settlements with a population of less than 5,000. It is necessary to ensure the financial viability of existing associations through exemption for a number of years, to introduce a transferable discount scheme or the Homebuy initiative, to examine the cost floor rules and clawback periods, and to introduce a system of monitoring and review.

353.

It is argued that extending the right to buy to all social housing tenants is equitable. How can it be equitable that in one area some tenants can receive upwards of £60,000 discount, while in a different location tenants paying the same rent for the same property of the same age will receive less than £15,000? We believe that a modernised house sale scheme is required for all social housing tenants, with flexibility and discounts linked to actual housing need.

354.

The CIH welcomes this opportunity to address the Committee and to articulate the principal recommendations in our written submissions. We are pleased that the Committee has commenced this process of consultation, which will undoubtedly assist in developing a more strategic approach to underpinning future housing services. We believe that is lacking in the current piecemeal, incremental approach in the outline legislation.

355.

We look forward to local solutions' being applied to Northern Ireland housing issues, and to the development of the specific strategies' reflecting our community. Members here recognise this challenge, and you can be assured of our continued support and co-operation in developing coherent policies to help to shape the future.

356.

We thank you for our invitation today, and commend our recommendations to you.

357.

Mr Tierney: Are the figures you quoted - £60,000 and £15,000 - the prices of the houses in certain areas?

358.

Mr Walsh: The Housing Executive would tell you that recently one of its properties was valued at over £100,000. The current maximum discount for a house is 60%, allowing that tenant £60,000 discount. In another area, the same property could, because of the demand and the value of that house, be valued at £25,000, a maximum discount of £15,000. That is the inequity.

359.

Mr ONeill: I am interested in that area, and the institute is making - let us say - startling recommendations. I gather from what you have said today and from your submission that you want the right to buy for all social housing to be re-examined and focused to what is good for Northern Ireland.

360.

You introduced a couple of things that I find very interesting - for example, the small rural town with less than 5,000 houses. I would like to hear some of the rationale behind those things, why you have come to those conclusions. Perhaps you would also expand on all of your recommendations on the right to buy.

361.

Mr Walsh: In relation to the rural settlements, the Assembly has committed itself to rural proofing its policies. We recognise that by selling off the properties - which have been provided in local settlements to meet the public sector needs in those communities - we are losing those properties, and we are not able to meet the needs of local residents in local settlements. More often than not people are having to go outside those settlements.

362.

It is also about keeping pace with developments in the rest of the UK. In 1996 they introduced changes in the right to buy and right to acquire which allowed exemptions in rural settlements of less than 3,000. The Housing Executive voluntary sales scheme has not kept pace with some of those developments during that period of time. This is an opportunity to try to look at that rationale, to look at rural proofing those particular policies and yet not simply be driven on the basis of equity - that everybody should have this - but to look at it much more strategically. We want to look at what the future and current demands for housing are in certain areas and to allow the policy to reflect those changes.

363.

People would not be disadvantaged by such a proposal. If people were interested in buying property and stepping on to the owner/occupation ladder they would still - through the transferable discount or the Homebuy schemes - be able to receive moneys to help them purchase. This would free up their property to rehouse people from the waiting list in that area, and this would reflect demands. At the current time, if a sitting tenant buys the house he lives in, that property is lost in terms of its future potential to rehouse people in need in that area. What this does is balance the needs of demand with the requirements to continue to support the right to buy. Perhaps Mr Perry wants to add something on the UK situation.

364.

Mr Perry: It is worthwhile looking back at why the right to buy was established in the first place. It was brought in as a means of promoting home ownership and raising the level of home ownership. Now that home ownership across the UK is at a high level compared with the rest of Europe that original reason for having the right to buy has largely disappeared. We would like to see the right to buy used more strategically in Northern Ireland and in the UK as a whole. What is the purpose of the right to buy? Do we want it? Do we want to look at it in relation to the way that the local housing markets are working? In some areas promotion of home ownership might be a good idea. In other areas maintaining affordable rented housing may be a high priority because of the loss of rented houses and the inability to build new rented housing over the last few years.

365.

There is also bound to be concern about sustainability as we push towards higher and higher levels of home ownership. We want to make sure that we are not encouraging people into home ownership who cannot sustain it over a long period.

366.

Interestingly, on the rural housing aspect, a few months ago your colleagues in the Environment Committee at Westminster proposed that the right to buy should be restricted in rural areas of less than 5,000 dwellings. That is the first significant suggested change in policy on the right to buy in England for several years. There is a momentum building up behind the idea that the right to buy does not make sense in rural areas where there is such a premium on rented property, and where, in many cases, the right to buy is eroding the supply of rented property. In some places it has been reduced almost to zero.

367.

The Chairperson: Let us suppose that I am a tenant of the Housing Executive and living in an area of high demand. The Housing Executive wants to sell the house in that area, and I want to buy it. Are you suggesting that the Housing Executive would give me a premium to go somewhere else?

368.

Mr Walsh: Yes. Many of the local authorities in England who have not had the advantage of being able to build for a number of years have introduced a transferable discounts scheme. The level of discount that you would be entitled to, as a sitting tenant, is made available for you to buy a property in the area that you want to go to. You can use that as a deposit to facilitate that move and free up the property you have.

369.

We have sold over 90,000 properties to sitting tenants. We now have 120,000 properties. When the Housing Executive came into being there were 212,000 properties. We still have urgent housing need, but we cannot meet that need because the opportunities are no longer available. If someone moves out they can use that property. Under the acquisition of satisfactory housing (ASH) scheme, the Housing Executive and housing associations are returning to those areas to buy back former Housing Executive properties to meet needs. Therefore, in essence, they are giving the discount on one property and then they are fuelling price inflation by trying to buy properties back to meet the needs in the same areas. It is a vicious circle.

370.

There is an opportunity to cut that circle by saying that the policy should be in place, not to disadvantage one community or another, but to facilitate house purchase with a discount cap. The caps would not allow some people to get £60,000 and other people paying the same rent, £15,000, rather they would facilitate mixed tenure in areas to allow stability, and in other areas, to encourage people to move out so that you could use the property.

371.

The Chairperson: What about people who are not Housing Executive tenants? People who live in Housing Executive houses in an area of high demand may not want to sell their house, but the Housing Executive gives them a premium to move elsewhere. How is that not a disadvantage to someone who is a first-time buyer or who has just got married and is not in a Housing Executive house and has to find the money to purchase a house elsewhere?

372.

Mr Walsh: These were the same arguments when the right to buy was introduced in 1980. People said that discount was being given to Housing Executive tenants to buy a house in that location, and they were living next door as an owner/occupier. This was endeavouring to create stability in some areas by allowing people to become owners so that they were more likely to take an interest in their community and their property and invest in that. That was the ethos behind it.

373.

The Chairperson: You are damaging that ethos by allowing people to buy a house away from that area.

374.

Mr Walsh: You are freeing up that property to rehouse people in need. Tenants could purchase in the same area but free up the social housing property for allocation from the waiting list.

375.

Mr S Wilson: Has the scheme encouraged house-price inflation in those areas? In effect, you are injecting extra money into the housing market, albeit local authority money, by giving people discounts to carry on to other properties.

376.

With regard to the private rented sector, some of us are concerned, first, about the rise in housing benefit bills and, secondly, about the way in which housing benefit levels have enriched many undesirable landlords, judging by the conditions of their properties.

377.

How would the certificate of market rent operate? Who would issue that? At present the district valuer is supposed to do the valuation, and it remains a mystery to us how he arrives at certain sums. Housing demands in areas change, so how often would it be reassessed? What obligation would there be on the Housing Executive, and what percentage of housing benefit would the Housing Executive pay?

378.

Mr Walsh: The Housing Executive would issue the certificate of market rent. The current system is that the Valuation and Lands Agency (VLA) makes a recommendation on the market rent in a particular area, but that does not dilute the responsibility on the Housing Executive to accept or reject that. The decision-making is still with the Housing Executive. Under the current proposal on licensing, the Housing Executive quite rightly has focused on multiple occupation housing. However, if we want to raise the standard across the sector for all those living in the private rented sector, not just students, nurses or people who are more likely to be in HMOs, but also the elderly who are living in controlled and uncontrolled tenancies et cetera, or who are living in furnished flats, there is an opportunity now to introduce compulsory licensing for the whole private rented sector.

379.

As part of that compulsory licence an inspection would need to be carried out on all the properties. The life of that licence would be determined by the condition of a particular property. If there were concerns that the condition of the property might deteriorate the licence could be for one year provided that certain works were done. The duration of the licence would be determined up to a maximum of five years because of the condition and management standards on that particular property.

380.

As a condition of that, there would be a certificate of market rent given by the executive stating the housing benefit payable on inspection of the property and its current condition. Instead of an application coming in, the executive sending that to the VLA, the VLA going out to do the inspection and sending it back to the executive and the executive then making the determination, regardless of what the VLA says, this process would cut that out. As soon as the inspection has been carried out and the licence issued to the landlord he knows what that rent is going to be. It short-circuits the processing times.

381.

Mr S Wilson: Unlike the current system where the VLA bases the rent on the general level of rent in the area, it would be linked to the condition of the property.

382.

Mr Walsh: The landlord would know, and it would be part of the licence. Sorry, did I miss an earlier point Mr Wilson?

383.

Mr S Wilson: Was there any evidence of house-price inflation as a result of the transferable discount scheme?

384.

Mr Walsh: I am not sure of the results of the surveys carried out in England. One important aspect of the right to buy is the capping of discounts. Currently someone could take advantage after three years and sell the property for £75,000 to £80,000 or whatever, and they would not have to pay back any discount. The high discount is then fuelling price inflation. If the level of discount is restricted the likely impact in fuelling price inflation is reduced. I do not know if they have done any work in England, but if you restrict the level of discount then there is less disposable equity to fuel that.

385.

Mr Perry: The level of transactions is not high enough in relation to the overall housing market. There are perhaps 600,000 transactions per year in England, and we are probably talking about a few thousand transferable discounts, so it is relatively insignificant. I do not suppose it has had an impact.

386.

Mr O'Connor: Mr Perry, you mentioned 5,000 dwellings. Is that 5,000 dwellings or 5,000 people?

387.

Mr Perry: Five-thousand people.

388.

Mr O'Connor: Northern Ireland is not really like England as we do not have all the big cities. Most of the population would be in smaller towns such as Ballyclare, which only have a population of 5,000. Are you going to say that Ballyclare is a rural area?

389.

You mentioned also the ASH scheme. The Housing Executive is reluctant to implement that scheme. There is the fact that people cannot sell for three years after they buy. If that requirement were done away with then surely if people bought their property and then decided that they wanted to move on, it could be acquired back under the ASH scheme. My problem is that we have a lot of mixed-tenure estates because of the right to buy where the area has been enhanced by a higher level of home ownership. Are you saying that if people want to buy their own homes they will be moved out of a Housing Executive estate where there is a high demand? That will create an estate for the haves and one for the have-nots. Under the Good Friday Agreement people have a right to freely choose their own place of residence. If I decide that I want to live in Larne, then that is my right. I should not be disadvantaged when it comes to buying my own home. If you are going to tell me that I cannot buy my own home and am going to receive money to move elsewhere, that then does away with my right to freely choose my own place of residence.

390.

Secondly, you end up with larger estates of social housing, no mixed tenure properties and a situation where you have the haves in one place and the have-nots in another. Have you thought this through?

391.

Mr Walsh: We are saying that the approach to right to buy needs to be strategic. If part of that strategy is to encourage mixed tenure because of stability, then that is one of the reasons that you would allow right to buy in that particular area. That is preferable to having a blanket ban on a particular area, as they are doing in Scotland. They are drawing a ring around an area saying that the area is in high demand and are not allowing right to buy for five years in the high demand areas. We do not believe that to be fair or equitable.

392.

We are suggesting that there is still a way of allowing those people to exercise their right to move into the owner occupation sector within the same area or estate, should they wish, but not to lose that property to the public stock. By selling that property to the sitting tenant you are not able to rehouse someone who is homeless or staying in temporary accommodation for an extended period. The accommodation is not there.

393.

The Housing Executive sold 5,500 properties last year. With mortgage interest rates coming down, the level of discount under the right to buy, and even the fact that the Assembly kept the rent increase down at a figure it has not been at for many years, for many people it is cheaper to buy than to rent. The bottom line of that policy is that you are not then able to meet the demands of the people who are in housing need because the accommodation is not unavailable. It is a strategic approach to develop mixed tenure in those areas where that is part of the strategy, but also not to lose housing stock in areas so that you are not able to meet the housing needs of people on those waiting lists. That is where the balance is needed.

394.

Mr O'Connor: That is affecting people's right to buy. If I am earning money I may be able to afford to buy my house on a Housing Executive estate because I am going to get it for £12,000 to £13,000. If I am on a low income I can afford to get a mortgage for that amount, as I am entitled to a discount of £20,000. For me to move out of that estate to somewhere else, and get a mortgage of £60,000 to £80,000, may not be on. So it is going to hamper home ownership.

395.

Mr Walsh: I am not sure how that would hamper home ownership. Even though they are entitled to discount, they would still have to be able to demonstrate to a lender that they are able to support the mortgage involved in the other house.

396.

Mr O'Connor: Exactly. I cannot go and buy the other property, whereas I may be able to buy the Housing Executive property.

397.

Mr Walsh: It is this thing about the balance. Also in relation to equity, a number of properties are exempt because they are built or made available specifically for elderly or handicapped. Under existing rules those people have not been able to buy anyway. If you are looking to make a blanket extension for all tenants in all types of properties to be entitled to all the available discounts, what we would be witnessing would be the end of social housing in Northern Ireland. A more strategic approach should be adopted to look at the local needs based on demands to facilitate those people in those areas that still wish to exercise the right for owner occupation.

398.

Mr B Hutchinson: I take the opposite view. One of my concerns is that there are high levels of demand for social housing in particular areas. If we have this rule about the right to buy, we are actually preventing people from being able to get in there and buy. My difficulty is that people are talking about those who have the money to buy a house, yet there are people who are on housing benefit because they cannot even afford rent. It is those people that I want to focus on. For me, the issue is about how we find a solution that suits those people. If there is a right to buy, and people have a right to buy a house, we need to work out how we protect that area. Many people would argue that this is not affected anyway, because 80% of people are on housing benefit.

399.

Mr Walsh: I do not think that is right. Simply because it is stated that 80% of Housing Executive tenants are on housing benefit does not mean that their ability to buy is diluted. The rules in Northern Ireland, under the voluntary sales scheme, are that you no longer even need to live in that property to be able to buy that property along with the sitting tenant. For example, I was brought up in a Housing Executive property; my brothers, sisters and I bought my mother's house.

400.

We do not actually live there, but we looked on the purchase as an investment. In essence, that property is now lost for somebody to be rehoused in. God forbid, but if something were to happen to my mother tomorrow, that house would be put on the market to be sold. It is not available to rehouse someone on the waiting list in that particular area. Housing benefit can disguise the fact that many of the people availing of the right to buy are actually on housing benefit.

401.

Mr O'Connor: That is the point that I am making.

402.

Mr Walsh: Yes, but they are only able to avail of that because their families are prepared to do that. There is nothing to stop their families still being prepared to assist them by taking advantage of the transferable discount or the home buy initiative, which they have introduced over in England, to facilitate that move and not lose the property.

403.

However, we have to recognise that, by continuing with the right to buy, we lose the property. The Housing Executive is selling 5,500 properties, as I have said. The housing associations have now become the new build providers. That is not because they asked for it to happen or because somebody thought that they would be more effective or efficient than the Housing Executive, it is simply because they are able to access private money. The effect of that is going to be higher rents for those people in those new properties. It is about trying to balance particular needs with the overriding need to rehouse people who are in most need.

404.

Sir John Gorman: Have you discussed this with the Housing Executive and put the same arguments to them?

405.

Mr Walsh: The Housing Executive recently announced a review of the voluntary sales scheme - it is going to bring that forward in the autumn. I am not sure whether there has been a sea change or whether the momentum of this inquiry has made it look at some of those changes. It will be looking at demand, discounts, eligibility and the rules of the right-to-buy and the voluntary sales schemes. The Housing Executive actually sell under the voluntary sales scheme and not the statutory scheme. A person can actually buy from the first day that he or she becomes a tenant. There is no waiting period.

406.

Sir John Gorman: Having introduced this scheme in 1979, I would be the last person to say that it is not time to have a look at it again; we are now approaching 2002.

407.

Mr ONeill: I would like you to expand a little on the options talked about under the large-scale voluntary transfer section, and the proposed new arrangements. You listed seven options - "doing nothing" and six others. Out of those, only two were for a large organisation; the others envisaged smaller units. We have only heard one batch of evidence so far, but the Housing Executive, with its one set of standards and various other plus factors has received a very great deal of support. Elected representatives and tenants seem to regard it as a very satisfactory model. As an institute, what is your professional opinion? Where does your preference lie, because you do not prioritise any of your options?

408.

Mr Perry: At this stage we are simply trying to provoke a discussion on this issue. We have not got a fixed view. Clearly the Housing Executive is widely regarded as having provided a good service over many years, and, therefore, one should not lightly disrupt the housing executive - there needs to be a good reason for doing it. On the other hand, a backlog of disrepair is already developing. It is building up. There will probably be a growing backlog of disrepair in the Housing Executive's stock, which will not be fundable from public funds.

409.

In England, and Scotland, and, to an extent, in Wales, there is a much more critical situation in public sector stock. The policy there has shifted towards stock transfer to bring in private funds. That is clearly an option for the Housing Executive stock. What we were trying to do in the paper was look at the costs and benefits, in a preliminary way, of the different options that would allow that to be done.

410.

One option would be to keep the executive as a whole and to argue with the Treasury that the executive should be reconstituted in such a way as to enable it to borrow privately as an entity in its own right, - just as the Post Office is being given the freedom to borrow. We looked at that option, but we also looked at options that would involve the breaking up of the stock. We do not have a fixed view. However, rather than just looking at one option, or not looking publicly at any options at all, we want a debate on the issue, with the pros and cons being looked at in public.

411.

Mr S Wilson: If the Housing Executive is to have a regulatory function over housing associations, do you see it as a requirement that the present housing stock be transferred from the Housing Executive to some other body or bodies?

412.

Mr Walsh: I just want to add that the issue of overhanging debt and the treatment of debt is a fundamental consideration in determining which option you are going to take up.

413.

In relation to the regulatory role and whether a split is required, the CIH view is that although it may be preferable, there is no reason why there needs to be a split. The model of the regulatory role does not require that physical split between the client and the contractor. That does not need to happen to drive it down one road or another.

414.

The Chairperson: Thank you very much. That was a very interesting discussion.

MINUTES OF EVIDENCE

Thursday 3 May 2001

Members present:

Mr Cobain (Chairperson)

Sir John Gorman

Mr B Hutchinson

Mr O'Connor

Mr ONeill

Mr M Robinson

Mr S Wilson

Witnesses:

Ms J Fulton )

Mr G Kelly ) Northern Ireland Federation

Mr C Williamson ) of Housing Associations

Mr G Murton )

415.

The Chairperson: Good afternoon and welcome to the Committee. We have read your written submission. Please give us a brief introduction before we move to the questions.

416.

Ms Fulton: I am the chief executive of the BIH Housing Association. I am also the vice-chairperson of the Northern Ireland Federation of Housing Associations (NIFHA), and it is in that role that I am here today. Gerry Kelly is from North & West Housing Ltd. Chris Williamson is the director of NIFHA. Graham Murton is the NIFHA's research and development officer. Our chairman, John Gill, sends his apologies.

417.

As you know, many of the housing associations in Northern Ireland are 25 years old this year. We were established in 1976 - five years after the creation of the Northern Ireland Housing Executive - to complement the executive's work, and, through the years, we have worked very closely with it. Very recently, the housing associations have been involved in working with the executive in creating a new common selection scheme for all of Northern Ireland.

418.

We acknowledge the Housing Executive's good work throughout its 30 years and the way that we have worked together. We have some views on working in partnership in the future with the Housing Executive and the Assembly to ensure that we deliver the best housing for the people of Northern Ireland. We do not have any other agenda. We hope to deliver a good service to all our existing tenants, to new people on the waiting lists and to people being housed by the executive and ourselves. That is our prime objective.

419.

We also want to make the best use that we can of taxpayers' money. We have a duty as stewards of public money to make sure that it is spent in the best and most effective way. The housing association framework, and legislative framework as it is set up, now allows us to make best use of taxpayers' money for the delivery of the social housing programme. We want to continue that and complement the work of the Housing Executive in its landlord role.

420.

We have some views on the major items under discussion. Mr Gerry Kelly will comment on the voluntary transfer regime.

421.

Mr G Kelly: The federation has made a submission to the Committee about voluntary transfers, and I have now developed that. I have copies here for the members.

422.

We believe that there is merit in considering a pilot scheme in Northern Ireland. The benefits would be that the tenants would get their houses improved at a much earlier stage. The Housing Executive would be able to dispose of some of its worst housing stock and the associated management problems. The taxpayer would save on the refurbishment bill and the Assembly budget could be redirected to other programmes.

423.

I am not saying that the GB model should be implemented in Northern Ireland, as it is being applied across the water. Perhaps there is scope for small-scale voluntary transfer; it is currently taking place in the Province.

424.

I was involved in an unsuccessful transfer pilot in 1997. We looked at the transfer of 250 houses in the Creggan estate on the west bank of the Foyle. The project was unsuccessful largely because the Department felt there was little benefit in it to the public purse. Savings made by utilising private finance were countered in the longer term by the increase in housing benefit expenditure due to higher rents. The Department did, however, accept that there would have been obvious benefit to the tenants. One of the reasons that we got involved was that the tenants had asked us to see whether there was any way that we could improve their houses. They knew that if they remained with the Housing Executive the improvements would not take place for years. In fact, the improvements have still not taken place.

425.

Our scheme foundered on costs. One of the key factors, which I point out in section 3.1, was that the houses had to be transferred at vacant possession market value in 1997. More recently the Department of Finance and Personnel has accepted transfer at tenanted market value. That has allowed us to become involved with a number of small-scale voluntary transfers. I list two examples - the replacement of rural cottages in County Tyrone and County Fermanagh, where we acquire occupied houses, demolish them and replace them with new ones; and a redevelopment scheme in the centre of Coleraine, where we are acquiring occupied Housing Executive houses for demolition and replacement.

426.

Section 4.1 points out that the Housing Executive's annual report indicates that there are 10,000 executive- owned properties that require major improvement work, of which 8,000 are without central heating. The cash cost of that work is estimated to be approximately £140 million.

427.

In Section 5, I table a possible pilot for small- scale voluntary transfer involving 120 houses of the 250 that we looked at in 1997. If we were to spend around £33,000 per house, it would greatly improve, and extend, each house. If the scheme were to proceed it would save the public purse £3·3 million in capital expenditure and cost only a little more in annual revenue expenditure.

428.

Mr Williamson: The federation recognises the aspirations of many social housing tenants to become owner-occupiers. However, it is important that the Assembly balance the aspirations of those already housed against the needs of those who are not housed - those who are on the waiting list now or who may be on it in the future.

429.

We accept that it is reasonable for the Government to consider an incentive, or limited public subsidy, to help social tenants achieve their aspirations of home ownership. Ideally, the NIFHA would like to see a home ownership promotion scheme which spans the entire social housing sector but which is flexible enough to reflect the considerable variations that exist between a local supply and demand situation and the one next door. Secondly, it should allow for the totally different financial regimes under which the Housing Executive, on one hand, and the housing associations, on the other, operate. Thirdly, it should be equitable for all social tenants.

430.

The present Housing Executive scheme is not very good at achieving those objectives. It reduces the ability of social landlords to address the severe needs that exist in some areas but is flexible enough to allow sales in areas where there is not so much pressure on social housing.

431.

The application of the same sales scheme as the Housing Executive has been running for a long time could undermine the viability of some of the NIFHA's members and reduce the number of social landlords and the amount of their available stock.

432.

The scheme, with minor variations, has been around for a long time. Meanwhile, policy has moved on in other parts of the United Kingdom in a number of ways, and that should be looked at.

433.

The NIFHA recommends that the Committee and Assembly look carefully at the research that we are undertaking. There are two parts to that research. One is being carried out by an independent group - the University of Glasgow. That is currently under way, and it is looking at the aims and rationale. The second part will be done in-house. We will be looking at the implications for associations and our membership on two aspects - their ability to address housing need, and their finances.

434.

It would be wise for the Assembly to look carefully before jumping to the conclusion that the housing sales scheme that applies to the Housing Executive should be applied to the associations.

435.

Ms Fulton: I am conscious of your time and the fact that you want to ensure that you still have a quorum. In line with the NIFHA's legislative thinking - and the volunteers in the community being sought through the Programme for Government - the voluntary housing movement provides over 10% of the desired number through the voluntary committee members who are involved in each housing association. It would be remiss of me not to pay tribute to their work and to highlight it to the Committee.

436.

Sir John Gorman: I have great admiration for the work of the federation under Ms Gault and Ms Fulton. I just want you to realise that the Housing Executive will have a point of view on this. Have you discussed your ideas with the executive?

437.

Mr Williamson: I made an informal approach to the deputy chief executive to see whether we could compare notes before coming to this Committee. Admittedly it was rather late in the day, but there has been no reply to that informal approach. There was willingness there, but it has not happened. We are perfectly happy to release the presentation to the public, including the Housing Executive, now that we have delivered it.

438.

Mr O'Connor: Many housing associations partake in the voluntary sales scheme. In the area where I live there are 250 voids, yet they will not sell because it is claimed that the properties are required are for housing need. Those tenants are being disadvantaged because of the areas where they live. Does discount money that is made up by the Department for Social Development, and the money that you get from the tenant, not allow you to acquire additional stock to use for social housing? How can you argue that you are keeping housing for people in need when you actually get the money back from the Department, and the money from the sale, to provide for that need?

439.

Ms Fulton: The house sales moneys go back into the association's reserves to be spent within a fixed period of time on new housing. We have a house disposal reserve, which must be spent within three years from receipt of that money, and it does go back into the purchase or construction of new housing.

440.

My own association has been doing that, but what we are receiving from house sales proceeds - even though it is making up the historic cost of the property - is not actually buying new property now because of the increasing land costs. That is the dilemma. Our house disposal fund cannot match the increased costs. We cannot operate on a one-for-one basis. The associations must spend the money within three years. If not, it goes back to the Department.

441.

Mr O'Connor: Rather than transferring the stock to you, would it not be better to transfer some of the land banks to you? That would allow you to create new build housing.

442.

Ms Fulton: That would be very welcome. The land bank has an historic cost. It may have cost between £200,000 and £300,000 to buy that stock, but the land may now be valued at £2.3 million. Land is transferred to the associations at its current value, and that is part of the dilemma that there is in the transfer of Housing Executive land to ourselves. We have to pay the current market value for vacant land.

443.

Mr O'Connor: You do not pay historic costs?

444.

Ms Fulton: No, we do not. Gerry Kelly could pick up the issue that he mentioned in relation to a tenanted property, which is slightly different.

445.

Mr G Kelly: We also have a voluntary house sales policy. We sell at market value, which tends to be around £50,000 in most of the estates in our area. To replace that house today would cost £80,000. As we sell, as Ms Fulton said, we cannot replace like for like. That is a major difficulty for small housing associations.

446.

Mr Williamson: Even if the money were the same and we had enough money to build, the trouble is that it is desperately difficult to find a place to put new housing in the areas of greatest need.

447.

It sounds grand that you get money in to replace houses, but it is not as simple as that, unfortunately.

448.

The Chairperson: Thank you very much.

MINUTES OF EVIDENCE

Tuesday 8 May 2001

Members present:

Mr Cobain (Chairperson)

Sir John Gorman

Mr Hamilton

Mr B Hutchinson

Mr O'Connor

Mr ONeill

Mr Tierney

Witnesses:

Mr P McIntyre )

Mr C McCaughley ) The Northern Ireland

Mr M Shanks ) Housing Executive

449.

The Chairperson: Have members any interests to declare?

450.

Mr B Hutchinson: I declare an interest in that I am a voluntary member on the board of Filor Housing Association.

451.

The Chairperson: Welcome gentlemen - would you like to begin?

452.

Mr McIntyre: We talked to the Committee staff about how we might approach this. The suggestion was that we take each of the areas, talk for about five minutes and then take questions.

453.

I will give the background to the regulation of the private rented sector, which is a growing sector - it has grown by something like 10,000 over these past 10 years. The house condition survey will probably report a greater growth than that next year. It involves a number of different markets - the low cost market; the houses in multiple occupation (HMO) market; the high rent market - mainly apartments; a growing buy-to-rent market, and also an increasing market in former Housing Executive properties that have gone for sale, and are now available for private rent.

454.

It is generally recognised that at the lower end of the market, where there are poor house conditions and poor households, the tendency is to have many small landlords. The legislation proposes to transfer the functions relating to the administration of the Rent Order (Northern Ireland) 1978 to the Housing Executive. The Order deals with rent registration for regulated and restricted tenancies in relation to rent and repairs in that small sector, which consists of about 6,500 dwellings. The Minister has also recently announced a legal review of the law relating to the Order to be carried out by the Department.

455.

We are carrying out research on the private rented sector. We are looking at how it performs; how it works; the nature of the landlords and tenants; the impact on the economy in terms of workers, mobility and so forth; changing lifestyles, particularly young people, and the role of housing benefit in sustaining the sector. The issues in the sector are: conditions, particularly at the lower end of the market; management, particularly poor management and how we might facilitate an improvement; the differences between regulated rents and market rents, and the role of housing benefit in responding to the market.

456.

There have been some recent developments in the market. New sectors are developing to cope with the demand from single people, and I have highlighted those. The private rented sector is also an important part of the market in meeting the housing needs of young single people. We really need to develop an approach to the private rented sector in Northern Ireland that looks at private renting as a means of increasing supply to meet diverse needs. Along with that is the need to improve conditions and standards. There are issues involving market led rents, housing benefit limits, and a reasonable balance being struck between the rights and responsibilities of landlords and tenants. The proposed legislation is a first stepping stone on the way to developing a broader approach to the market, after the research has been analysed and the review of the legislation has been completed. That is our view about the legislation.

457.

Sir John Gorman: Presumably the private rented sector is performing a very useful function. There is an issue concerning the degree to which the sector should be legislated for, controlled, and monitored. There is always the danger - and we heard it during the Assembly debate on fireworks - that there is always somebody wanting to impose some new law or controls. Is there a danger that we are going to put potential landlords off doing anything about this?

458.

Mr McIntyre: That is a very important point. I made a fleeting reference to it when I said that there has got to be some reasonable balance. The more you control this market, the more likely you are to drive suppliers out. On the other hand, there are issues concerning poor conditions. On occasions housing benefit is funding this sector, and we need to be looking particularly at that end of the market, as far as controls are concerned.

459.

The Chairperson: You talk about driving private landlords out of the market if the legislation becomes too stringent. We are not talking about good landlords here; we are talking about poor landlords. People making a business out of this sector have to get things right. Are we worrying too much about this? A lot of the houses in poor condition would be owned by someone who has four houses or less?

460.

Mr McIntyre: It is generally accepted that the thrust of regulation ought to be related to the condition of the property and the standards of management allied to the payment of housing benefit, since there is public money involved. The extent to which you regulate the private rented sector has been a century long battle in housing policy. In doing so, do you force the people in that market to pull out?

461.

The Chairperson: The issue that worries us is people coming out of the private rented sector. My view - and maybe I have misinterpreted this - is that the houses in poor repair belong to landlords who own two or three homes. Is that a misinterpretation?

462.

Mr McIntyre: Part of the difficulty is that most landlords in Northern Ireland own, on average, five or six properties. The market has grown and changed over this past ten years, and we are intending, by way of research, to understand that market better.

463.

Mr B Hutchinson: Our difficulty, whether as councillors or MLAs, is that we will always be approached by people who are paying benefits for housing that would be classified as below sub-standard - in some cases you would not put a dog into them. We need to protect those people who are never going to get enough points on the Housing Executive list, and have to turn to these landlords. I was interested to read in you paper about the link between housing benefits and standards, but unless standards are checked on a regular basis, that will not work. How many staff would you need, and how much would it cost to operate?

464.

Mr McIntyre: We are looking at this from a policy perspective, and have not yet considered costs. It is a major part of the national housing benefit debate going on across the water, and is not a local matter.

465.

Mr B Hutchinson: Do you think that the executive could control this, and deal with the problem?

466.

Mr McIntyre: I do not see why not, and I would be interested to know your view.

467.

Mr B Hutchinson: You would need more staff and more money, and my concern is would you get that?

468.

Mr Tierney: Why would a good landlord object to regulations? You made the point that it would have to be balanced out, but I do not see any argument for that. The regulation would be there to protect both tenants and landlords. No one running a decent business would object to regulations.

469.

Mr McIntyre: Our experience of consulting on voluntary licensing is that the landlords who have responded do not have any objection to it.

470.

Mr Tierney: I am responding to your earlier answer to Sir John Gorman, when you said that you have to be careful with it, or you could drive people out. You would only drive out the people who are running a bad show, as the Chairman said. If they are driven out because you are regulating it with licenses, then so be it. Housing benefit is being paid for tenants who are living in those poor conditions, and that is the responsibility of the Housing Executive.

471.

The Chairperson: Following on from that, how does that square with your point about linking housing benefit to unfitness? If we regulate this too heavily, you say we are going to drive those people out of the market. Surely we are not going to pay public money - as we are at the moment - for people to live in slums. If public money is going to be spent, the house has to be fit for habitation. The only way to do that is to regulate, because they are not going to do it voluntarily.

472.

Mr McIntyre: A distinction has to be made between landlords who want to bring their properties up to the proper standards, and whether the current rental levels and income from those properties allow them to do so. Apart from housing benefit, there should also be a relationship with availability of grants. That it is an approach which would help legitimate landlords - who have no intention whatsoever of being anything other than that - and is also a policy that will help those landlords who want to bring their properties up to standard to achieve that.

473.

Mr Tierney: Tenants have to be protected. If it is not up to standard, regardless of the reason, they have to be told to bring it up to standard. People should not be asked to live in those conditions - and you know the conditions we are talking about in some cases. I accept that the landlords involved are in the minority. Most landlords are very good, but there are people living in poor conditions, and that must stop. The only way to stop it is to regulate it.

474.

Mr McIntyre: It must be regulated it in a sensible way. You cannot just walk into some areas of high housing need tomorrow and say "We are now the regulator; your property is not up to standard and we are closing it down." That accommodation, be it good or bad, is offering something to somebody at a particular point in time. We must take the approach of working with and helping the landlords who want to improve their standards. We also need to tackle the landlords who have no interest in making improvements - get them out of the market place.

475.

The Chairperson: That is what we are looking for. With regard to the enforcement of housing fitness, and regulation of that, would you be opposed to city or district councils enforcing that?

476.

Mr McIntyre: Presumably you are talking about repair notices, and so on, and, at the end of the day, that will be for others to decide. When you are look at tackling housing conditions and disrepair, you have to ally it to other things for which we have responsibility, such as payment of grants and housing benefit. It would make sense for whoever who is handling those issues to be handling them in their entirety - not bits here and there. We have a good relationship with the environmental health officers that we work with in this field, and use them for quite a bit of our work.

477.

The Chairperson: One of the pressing points they made to us was that they wanted to see some independence in this field.

478.

Mr McIntyre: I can understand where they are coming from there. Our view would be that the enforcement, and notices to do with house conditions, housing grants and housing benefits are all part and parcel of the same thing, and are best dealt with by one agency.

479.

Mr O'Connor: In relation to the areas of high housing need, many of these private landlords rent houses in areas where there is not high housing needs, and, in some cases, a large number of voids. For instance, in my area, acquisition of satisfactory housing (ASH) has not been used for a long time. Therefore, people wanting to live in certain areas cannot get housed there and are forced to go these landlords. In a lot of cases the houses have no central heating, and many have had regulated rent certificates from the council and have been subsequently served with notices for penetrating dampness, and such like. It seems that these notices have to be served on the landlord before the landlord is eligible for a housing repair grant. If someone has to live in a house that is damp, why can the grant not be paid to stop the house becoming damp in the first instance?

480.

If the executive were to take on some kind of regulatory role -where it is responsible for regulating the fitness of these houses and the grants - it could do away with that situation. Someone could inform you that their house is in disrepair, and you could take the appropriate action there and then, without having to go through the whole rigmarole of district councils serving notices on private landlords and private landlords having to apply for a housing grant. It seems to be a roundabout system at present. People have the right to choose their own particular residence, and if they choose to live somewhere they should be not disadvantaged socially because their landlord is not part of the Northern Ireland Housing Executive.

481.

Mr McIntyre: This is a point that we can pick up as part of our discussion on grants - the relationship between disrepair and grants - if that is OK with Mr O'Connor. I would not disagree with the point he is making.

482.

The Chairperson: Before we leave the private rented sector, you made the point that you could go in tomorrow morning and tell landlords that you are going to regulate them. Could you give us a timeframe for that?

483.

Mr McIntyre: I am not trying to avoid the question. In many ways the jury on the private rented sector is still out until we come back with the research. We will want to share that research with everybody, because it is the first big piece of research to be carried out in the private rented sector.

484.

The Chairperson: We are saying is that we cannot go on paying housing benefit for houses that are unfit - everybody around this table is in agreement with that. There is going to have to be some regulation in this field, and if some people fall off the edge, that is bad luck. I take your point that you cannot go in tomorrow morning and say that you are going to regulate. However, there is no sense coming here and saying that we agree to regulate but there is no timeframe to do it. If there is no timeframe, no one will do anything. The Committee wants to see poor landlords regulated.

485.

Mr McIntyre: I will sound a note of caution there. Any linkages between housing benefit, poor conditions and regulating landlords, are outside the control of almost all of us sitting here, to a large extent, other than the representations that we might make to the National Housing Benefits Scheme. What happens across there is critical.

486.

Mr O'Connor: Are you proposing to regulate houses on a similar basis to the way the executive currently works - x amount of bedrooms and living rooms at so many pounds each; whether it has central heating or not at so many pounds each? Is this the way that you regulate a price when you are talking about market-led rents?

487.

Mr McCaughley: The unfortunate answer is no. First, in linking housing benefit to housing conditions, there was an implication in a Green Paper that the Government would head down this road. The latest view is that they may back away from this, taking care not to wreck the housing market in high demand areas, so we may never see that. The issue then is what control can the Housing Executive have over rents in the private rented sector? In three weeks time we will again take control over rents in the private market for housing benefits. Some years ago, we lost control to the Valuation and Lands Agency by departmental directive. A recent judicial review directed that we could not delegate that function, so it comes back to us in June.

488.

The Valuation and Lands Agency only recognised about 10 housing markets in Northern Ireland in the private rented sector. From June, we will break it down in to more markets, to try and reflect reality. However, there are regulations that tell us how we do that. The law states that we have to find the highest and the lowest rent, and divide by two to come up with an average rent for that area. It is good that we are getting that rent setting facility back, but there is only so much that we can do within the regulations to actually set that rent. We will try to exercise as much control as we can to reflect housing conditions, but we need to be careful that we do not step outside the regulations.

489.

Mr Tierney: Regardless of the conditions?

490.

Mr McCaughley: Let me put it this way. If you defined a housing market in an area that had nothing but bad houses, you would be setting a lower rent would you not?

491.

Mr O'Connor: In my area I could get a Housing Executive house with four bedrooms in good condition for around £50 a week. The going rate on housing benefit for a two up, two down private rented house is £75 a week, but it will generally be an 80 or 90 years old house.

492.

Mr McCaughley: If it is in the same housing market we can address that.

493.

The Chairperson: I know that housing benefit is not a devolved function, but housing is. The Assembly have a right to look at the Housing Bill and ensure that it contains regulations that we think are fit. However, I take the point about housing benefits.

494.

Mr McIntyre: I will now talk about houses in multiple occupation (HMO), which are a sub-set of the market we have just been talking about. We have some powers to deal with HMOs that are unfit - houses that are not up to fire standards, overcrowded or over occupied for the facilities and amenities provided. It is a small-scale, but high-risk sector, which is an important point to make about HMOs. There are nearly 10,000 HMOs at the moment - 30,000 people in flats, bedsits, lodgings, shared houses, bed-and-breakfasts and so forth. They are mainly concentrated in north and south Belfast, Coleraine, around the university area, and Derry. There has been some growth in HMOs in North Down and in towns such as Dungannon and Omagh. It is an important segment of the market for meeting the needs of young, single people.

495.

Around 9% of HMOs are statutory unfit, but more importantly, approximately one out of three do not meet HMO standards such as fire standards, and the facilities that it should have for the number of occupants, or overcrowding. We issued a HMO strategy in June 2000, and there were a number of strands to it. Firstly, there is the issue of legal powers, which I will return to later as it is covered by the legislation. Secondly, there is a 10-year target for inspection and grant aid to bring the sector up to standard. We are seeing the beginnings of an area-based approach in north Belfast and Derry as part of their housing strategies. That will take a little time to move along, as both are fairly recent strategies. Licensing is part of the legislation. There is also the issue of building relationships with landlords. We have started this process with seminars and various other things held around the Province; which are well attended. One of the issues being addressed is the definition of a HMO. I do not want to get tied down in the technicalities, but, suffice to say, there has been sufficient case law to narrow down what may be the initial definition of a HMO, particularly dealing with student housing.

496.

Secondly, in January we had consultation regarding a voluntary licensing scheme, which has just finished. Over 40 submissions were received, with a broad support from most quarters. There are issues over the standards, exclusions, phasing and information that will go into the public domain, and so on. We eventually see this leading to a mandatory scheme.

497.

We have discussed at some length the relationships between rent levels and housing benefit. We need to get on with implementing that HMO strategy. Some may feel that a 10-year strategy is too long, in which case we would need to take views on how that might be shortened. We need clarification about the definition of a HMO, and the legislation will provide that. We need to incrementally move to compulsory mandatory licensing, and the legislation again includes the powers that will allow that scheme to be introduced. We must look at how it might be phased in, and that concerns resources. One might hit the high risk HMOs first - those with most occupants. We must increase the inspection and enforcement activity; our operation is up by 50% to 70% over this past couple of years. We must be seeking changes to the national housing benefit policy linked to standards, a point we have already discussed. That is our views on HMOs, linked into the broader private rented sector.

498.

The Chairperson: Last week we had a delegation from the National Union of Students (UK) and the Union of Students in Ireland, and a point arose from that meeting which I said that I would raise with you. They believe that there is a very poor relationship between you and them. They represent the student body, which is a very important area in HMOs. Is there any way that you can form a relationship with them as far as HMOs are concerned? They do not have any formal relationship with you, which concerns them as they represent the vast majority of people living in HMOs. Like any other tenants' association, they want to be represented on that level. I said I would raise that issue with you.

499.

Mr McIntrye: We would certainly welcome that and will make contact with them. They were part of the consultation on the voluntary licensing scheme. We already have fairly close relationships with the accommodation officers in both universities.

500.

The Chairperson: We will give you the names of the individuals who were here last week. You can make contact with them and that will keep us all right.

501.

Mr ONeill: This has much to do with regulation, which has already been explored with regard to the private sector. Have you had any feedback on the voluntary registration scheme? How effective has that been in defining the number of HMOs, and what level of success have you had in enrolling people? Can you put a percentage on the number of people who have enrolled and those who have not? What are the obstacles to moving them from voluntary to mandatory registration? Mr McIntyre referred to the strategic role that the Housing Executive might perhaps have with regard to the numbers of HMOs in an area, and the environmental consequences - the destruction of local communities and so on.

502.

Mr McIntyre: Perhaps I was not clear. We currently have a proposal under consultation to introduce voluntary licensing in advance of compulsory licensing. That consultation period finished only last week. We had a couple of big meetings in Belfast and in Derry. As I have already mentioned the responses that we have had from about 40 of the meetings have been pretty positive, and we will now analyse those responses. We propose to respond to the consultation on the voluntary licensing scheme this autumn. It will provide a run-in to mandatory licensing, which we expect to see as part of the legislation. We have no direct experience of voluntary licensing to report.

503.

Mr ONeill: Do you know what percentage of the sector has given you a response?

504.

Mr McIntyre: Not at this exact moment, but we can find notify you in writing. We have had about 40 responses from 40 different organisations. The landlord response tends to be more about phasing and timing. I do not think we have had any responses in opposition to licensing from bodies representing landlords. The Association of Landlords, which represents private landlords - not all of them, but quite a lot - has been represented at each of the seminars that we have run on this.

505.

Mr ONeill: Did you have much response from that sector most in need of regulation?

506.

Mr McIntyre: It is hard to tell. There are those who believe it is a good idea and will turn up at those events, and others will not turn up. Having said that, approximately 400 to 500 landlords attended the events around the Province. We were quite pleased with the turn out. Generally, the issue has been about the phasing of licensing, and some aspects of its detail and standards. Good landlords recognise that licensing is a good thing for them. That sums up the feeling from those meetings rather than actual written responses, which is hardly surprising.

507.

The issue of the density of HMO's has been raised before and is predominantly a planning issue. I understand that planners have picked up on the issue as a result of comments made by Assembly Members and other public representatives recently, including, if I am not mistaken, your colleague from Derry, Mr Tierney.

508.

Mr ONeill: I am aware of that, but I am also aware of the role that the Housing Executive has in the environment. Is there not a responsibility for the environment, particularly when you work through your tenants representation groups?

509.

Mr McIntyre: It is an issue, and the most effective way to deal with it is probably through planning powers, as opposed to housing powers. That is our view. In Great Britain it tends to be tackled from a planning perspective, based on evidence from there.

510.

Mr ONeill: I understand the planning consequences, but I would like the Housing Executive to play a role in this.

511.

Mr McIntyre: I will note that point.

512.

The Chairperson: Why are we moving to this voluntary licensing as an interim stage?

513.

Mr McIntyre: Do you mean in advance of legislation? At best, we presume that the draft Bill is not going to be ready for consultation until early 2002. I could be wrong but that is my understanding. It has to go through certain processes and, as it is likely to encourage debate, it could take quite some time before it is set down in legislation.

514.

Last week the National Union of Students was critical of the executive prevaricating about licensing - I think that was the word they used. We are responding by trying to get voluntary licensing in place. At the very least, we will learn some lessons about how to operate a voluntary licensing scheme.

515.

The Chairperson: I will end this section with the same point that Mr ONeill made about houses in multiple occupation changing the character of areas - planners will be loathe to do much about it. A large percentage of the pressure would come on the Housing Executive because, obviously, housing benefit plays a big role in the matter.

516.

Mr McIntyre: I take your point. I am not quite sure whether we have powers that would address it beyond what is available to the planning service at present.

517.

The Chairperson: We are talking about a Bill, and holding these discussions against the background of a Housing Bill. We are trying to fish out information and ideas that will help the Committee to form a view on the Housing Bill. Planners have a role in this matter, but I assume it will be difficult for planners to identify areas of the cities with houses suitable for multiple occupation and houses that are not - they have not done it before. A number of agencies must come together to protect communities.

518.

For example, there are no houses of multiple occupation in the Springfield Road or the surrounding area at present. When the University of Ulster goes in there I would think that within three or four years your properties in that area, which are in areas of high demand, will go to the private rented sector.

519.

Mr ONeill: I would support that. A section of the housing review document involving the environmental side of things was accepted without any controversy by all and sundry. The Housing Executive should play a more strategic role in dealing with the quality of the delivery of housing in the community, rather than just the actual bricks and mortar. This would give the Housing Executive an enhanced role in the community, and in community participation. These areas would have more relevance to this kind of problem than simple planning permission.

520.

Mr McIntyre: Currently we do not have powers to address that - the planning service probably does. If the Committee is saying that the executive needs the powers to address that, I would not disagree.

521.

The Chairperson: The point we are trying to make is that housing has an impact on the character of homes, whether it is through planning or the Housing Executive. The Springfield Road is an area of high demand. You must be blind not to see that in five or ten years time - if the University of Ulster goes into that area - a large amount of the stock there, which is currently owned by the Housing Executive, will move from Housing Executive ownership to housing of multiple occupation. Tenants will buy their own homes and sell them on to landlords, thereby changing that whole community.

522.

Everybody has a responsibility. We were talking to tenants about the future of their areas. The Housing Executive and the communities have a role to play. The Housing Executive, along with the planners and the Department, must take a strategic overview of the matter.

523.

Mr McIntyre: I do not disagree with that.

524.

The next topic is private sector renewal, and the proposed changes to the grant scheme in the legislation. I will not go through the current grant scheme, as people are fairly familiar with it. It is mandatory for renovation grants, replacement grants, houses in multiple occupation (HMO) grants and disability grants.

525.

Grants are an important weapon in dealing with unfitness. That sector accounts for expenditure of about £40 million to £45 million per annum. Between 1991 and 1996, as measured by the house conditions survey, 24,000 dwellings moved from unfitness to fitness; 40% of them did so through receiving grant aid. The house condition survey, which has just started this year and will report next year, will, I suspect, give the same type of data about the importance of grants in attacking unfitness.

526.

The proposals in the legislation are twofold. The first is the intention to shift from a mandatory scheme to a discretionary one, which would put us in line with current GB grants legislation. The starting point for this was a policy review in 1995-96, which said that we should switch to a discretionary scheme because there was a big call on public funds. Until recently the Housing Executive would have supported that position. The other parts of the legislation are concerned with tidying up existing grants, and we do not have any difficulty with that.

527.

The main issue we want to flag up for the Committee is shifting from mandatory to discretionary schemes. Strangely, GB, within the past month, have decided to dump the discretionary system introduced in 1995. In their consultation paper, which went out in March, they are now signalling that there should be a shift from a national improvement scheme to local schemes. We have referred to the consultation document in our submission. In the new scheme, the Government would put a broad framework of powers into place. That would allow each local authority to develop local grants scheme or housing renewal schemes using a menu of tools such as grants, loans, help to agencies, and relocation grants. That is the first shift.

528.

The second shift is that they are looking at diversity of assistance. They are not just looking at grants; they are looking at a bigger role for improvement loans. They are looking at using the equity in houses to generate funds, which would allow people to carry out improvements. Strengthening the assistance available to the elderly and disabled is another part of the proposals, which have come out in March.

529.

The reason for the Housing Executive's shift in approach is partly to do with the fairly recent shift in GB. It is introducing the issue of local schemes for local areas, which is in line with our thinking. As well as that, the huge backlogs, which used to exist in grants, no longer exist. That was another reason why people wanted a mandatory scheme.

530.

One of the issues that need to be tackled in the private sector renewal is unfitness. There are still about 40,000 houses involved. Each year, approximately 4,000 houses move from disrepair to being unfit. Grants would be important in helping tackle that. There is an ongoing need to tackle elderly and disability needs. When talking about the need to accelerate HMO activities there is also the need to prevent houses moving from disrepair into unfitness.

531.

As well as that, you will be fairly familiar with the unfitness standard here, which is basically at the physical level. It deals with lack of facilities and amenities, and poor layout, and triggers many things including access to grants. There are major changes coming in GB, where they are switching to a much broader health and safety rating for a dwelling. It would include items such as warmth and comfort as well as risks such as fire and radon. It would be about risks to the individual as well as the physical condition of the house. We need to take that on board.

532.

There is the need to use grants to attract private investment, and there is an issue about using the grant system to target grant-aid in a more focused way. We ought to be looking at developing a local grant scheme, which combines some elements of mandatory activity - for example, concerning HMOs and disabilities - with discretionary elements to meet the Northern Ireland circumstances. Our view is that the proposed change in the legislation, from mandatory to discretionary, needs to be thought about in light of what is happening.

533.

Secondly, there are legal and tidying up provisions to the grant legislation, which we do not have any particular problem with. We feel that it is a fairly late change.

534.

The Chairperson: The Committee opposes moving from mandatory to discretionary grants because it is an easy way for the Department to raid funds. With a discretionary grant you could take the money in three or four years time and you would not be getting the same amount of money each year. A mandatory system would suit us better.

535.

I am interested in a holistic approach to improving the system. How do you go about informing elderly and disabled people about assistance? The method of getting information to elderly people, irrespective of their situation, to enable them to avail of everything they are entitled to, concerns me. How will the Housing Executive approach the issue?

536.

Mr Shanks: As the Committee will be aware, we work with home improvement agencies, specifically Shelter and Fold agencies to inform and facilitate elderly and disabled people in accessing the grant system. That has grown over the last three or four years and is now working quite effectively. We recently prepared a paper showing that the agencies were doing quite well and we are intent on continuing with that.

537.

The Chairperson: We would appreciate sight of that paper, as we have not seen it. We are endeavouring to target elderly people who would be socially excluded - those not tied into either Shelter or other organisations. They are living alone and have very little contact with people. Some live in appalling conditions but that does not mean that they cannot receive the grant. They are not aware of what they are entitled to and a big percentage of their houses fall into disrepair as a result. Can we do anything for the elderly through Help the Aged or Age Concern, which are more appropriate organisations for the task rather than Shelter?

538.

Mr Shanks: We do engage with these agencies to make contact with the elderly who require grants. The adaptation side of the disabled facilities grants (DFGs) has grown considerably over the last few years as a result of that activity.

539.

The Chairperson: Yes, but that is more to do with the disabled than with the elderly.

540.

Mr McIntyre: As always, we could be doing more. This year we will be looking at a best value review of those home improvement agencies - and whether or not we are getting the best out of them, and if there is a need to expand.

541.

Mr McCaughley: The Fold model is very good, in that they work through networks or contacts with churches, local voluntary organisations. It seems to be a very good way to do business for the elderly and disabled in any area.

542.

Mr Tierney: The Housing Executive automatically refers them anyway.

543.

Mr McCaughley: That is right. It is coming at the problem from two sides.

544.

The Chairperson: Looking at the holistic approach, we have this adage about joined-up government. How do we actually achieve that, and are we going to have some sort of agreement across Departments? We are not talking just about houses and disrepair, end of story. We are talking about a holistic approach, taking into account people who are at risk- elderly people who have no heating and people with disabilities. Those aspects lie outside the control of the Department for Social Development, never mind this Committee. At present disability adaptations come from our budget and we are not going to be left in that role. The Health and Social Services provides the visiting officer, we provide the money and the resources. Has any thought been given to a holistic approach?

545.

Mr McIntyre: Concentrating on the housing and health field alone, last year we issued a major piece of work looking at our relationship vis-à-vis the health sector and the clients we have in common. There are about 20 recommendations to follow through to make that work more effectively. The Department for Social Development and, indeed, your own Committee has established an inquiry on urban regeneration and community development. That relates to our work in housing renewal areas in co-operation with all the other agencies. The message on joined-up government is not lost on organisations like our own, but a lot of work needs to be done to get these partnerships working effectively.

546.

The Chairperson: Those organisations must work effectively if they are to have an impact. It is senseless having good ideas that never come to anything. Large-scale voluntary transfers are a good idea, but there has to be results.

547.

Mr McIntyre: When neighbourhood renewal emerges from the Department for Social Development, it will be the key to pulling together matters on health, housing, community development and so forth at a neighbourhood level.

548.

Mr O'Connor: In some cases, it can take senior occupational therapists 15 months to see patients. Is there any way that the Housing Executive could not be dependent on the Health Service, but have its own trained maintenance officer who can make quick assessments if, for example, a handrail to help the elderly needs to be put in place? There is a safe homes grant in the South, which gives elderly people money to put mortise locks, chains and window locks on to their homes. Can we use the same criteria as those used for the domestic energy grant to give out grants similar to those in the South, so that people - especially the elderly and vulnerable - can facilitate that type of minor work?

549.

Mr McIntyre: We have completed a joint review on adaptations with the Health Service sector. The review says that the Housing Executive will deal with minor adaptations and heating, but occupational therapists must be involved for major adaptations. That applies only to the public rented sector. The legislation says that if you are an owner-occupier trying to get a disability grant in the private sector, you must have the recommendation of an occupational therapist - there is no way around that in the short term. I was at a conference a couple of weeks ago in the South, and the big complaint was that enough money is not being spent there to address poor housing conditions, whereas we are spending £45 million a year on that. We have chosen to follow the way that grant legislation has been developed here. We focus on that rather than giving out smaller grants to address the matter. However, that is not to say that giving smaller grants is not a good idea.

550.

Sir John Gorman: I am on the board of Help the Aged, and at every board meeting there is discussion about this matter. Anne O'Reilly, the executive of Help the Aged, has given the impression that the organisation gets a lot of help from the Housing Executive. What is attractive about the private sector investing through grants, and how does that work?

551.

Mr McIntyre: Owners who put their own money into it carry out most improvement to property. There is a view emerging that if you have a grant of £30,000, it might be better to put the grant at £20,000 and help the individual to raise the balance some other way, perhaps by working with lenders. That can be done, and there are proposals in GB that suggest that it is better to get loans at a lower cost than is currently being done. That might be an example.

552.

Mr ONeill: It is more significant, and I hope that the Housing Executive and others to whom the Committee has spoken look at needs in particular circumstances. We need to take that kind of approach more and more. Regarding disability improvements - or handicapped adaptations, as they used to be called - and the role of occupational therapists in that area, the Minister of Health, Social Services and Public Safety announced that 20 extra occupational therapists are to be employed. Is it possible to quantify the impact that that will have on an occupational therapist's salary? Will it be as bad as it used to be? Will it make any difference or is it sufficient as it is?

553.

Mr McCaughley: The adaptation review predicted that we would solve the public sector problem reasonably quickly, and we have already seen a reduction of about 30% over the past three weeks and heating assessments are all sitting on our desks now. The situation in the public sector will improve. We will have come to terms with it over the next year or two.

554.

The problem, as predicted, has now shifted to the private sector. People who are waiting for a disabled facilities grant are now waiting longer. As the review suggested, the answer to the problem is at least 30 more occupational therapists to enable us to meet the growth in demand for the service. Any additional occupational therapists will have an impact on the situation. We will ease the burden on the private sector by taking work from the public sector, but the big growth will be in the private sector in the years ahead.

555.

The Chairperson: We have no control over the private sector.

556.

Mr McCaughley: We do not have control over that sector, but it would not take much to promote the idea that there should not be an occupational therapist requirement for the private sector, and that could be covered in a Housing Bill. We could quickly assess minor adaptations and provide grant aid.

557.

The Chairperson: There would still be a role for professionals on the big jobs.

558.

Mr McCaughley: Yes. The big jobs would require professional input.

559.

Mr ONeill: We might take up that suggestion.

560.

The Chairperson: Even if we are successful in getting more occupational therapists, can the Housing Executive cope with additional adaptations at a faster rate?

561.

Mr McCaughley: We have bills on our desks to the value of £5 million because of the backlog of heating requests, so we have made an in-year bid for an additional £5 million.

562.

The Chairperson: You will probably get about £4.

563.

Mr McIntyre: We received a fair amount of money last year, which quite significantly reduced the heating backlog. Our concern is to get the industry and our machine in a position to do the adaptations. We put the bid in because we think that we can do that. We seem to get quite a good hearing for money for adaptations.

564.

The Chairperson: Seeing is believing.

565.

Mr Tierney: I do not think that one Department should provide 20 new staff while another Department provides the money to carry out the process.

566.

Mr McIntyre: Perhaps this is when we will be sacked. There has been a lot of debate about large-scale voluntary transfers. Originally, this was a political issue in Great Britain because it was Conservative policy to take responsibility for housing away from local authorities. New build had gone, and the right-to-buy scheme had run out of steam, so the Government were looking for ways of taking responsibility for housing away from local authorities.

567.

More recently, the debate has been about how to address the investment backlog of about £22 billion. The Government have made a commitment to provide everyone in the social rented sector with a decent home within 10 years. There are still big targets to meet in the fifth year of the process.

568.

Large-scale voluntary transfer is one of a number of options that are available in Great Britain now, and I think that we finished our submission with some extracts from the Green Paper on housing which showed the other models. Investment in the social rented sector has also doubled over the past couple of years, so large-scale voluntary transfer is now seen in a slightly different context. About 400,000 dwellings have been transferred since 1988, and about 200,000 per year are scheduled for the next three years. It is worth bearing in mind that the Government have set a maximum of 12,000 dwellings for large-scale voluntary transfer. We were in Glasgow last week where they have 90,000 dwellings, and that is causing real problems - I might come back to that in a moment.

569.

Large-scale voluntary transfer is also about local authorities taking on a more strategic role, and getting out of the private sector. There are problems with the financing of large-scale voluntary transfers. Early transfers were from Shire councils, which were selling good quality stock. The receipts that they got from the transfers were bigger than the debts outstanding on the stock, so the receipts paid off the debts, and there were no problems. The receipts for the next set of transfers tended to be less than the outstanding debt on the stock, particularly in urban areas, and that caused problems for the Government. The Government in Scotland, and now in England, are starting to take care of what are described as "over-hanging" debts. They have changed the rules to suit this as they have gone along. It has to be done with tenant agreement, so a majority of tenants must vote for it.

570.

Another important issue has emerged recently, and that is the idea of rent convergence. Local authority rents have tended to be a lot lower than those in the registered social rented sector. Building business plans around large scale voluntary transfers (LSVTs) and using the rate of inflation plus 2% has created a poverty issue. The Government have now decided that, as part of a rent convergence policy, rents in future will be based on the rate of inflation plus 1%, followed later by rate of inflation plus 0·5%, and eventually zero. This has presented some LSVTs with a problem.

571.

From a Northern Ireland perspective, there has always been a facility to transfer dwellings, and the legislation provided for a single tenant to stop transfer that taking place. The proposal in the Bill is that this provision should be removed, and we have no problem with that.

572.

There are other models. Scotland is going for community-type landlords. In Glasgow the funding authorities have stated that they do not want their stock broken up into 12 housing associations, each with 10,000 houses. From a funding perspective they need cross-subsidisation - the good stock must subsidise the bad. In Glasgow there will be a single transfer to a single housing association.

573.

In LSVTs the ownership transfers to a registered social landlord. Other models include "arms-length" companies where ownership does not transfer. In our context, a separate company would be set up within the Housing Executive with a separate agreement with the board. It would be able to borrow public money as opposed to private money. LSVT's have access to private borrowing.

574.

The Finance and Personnel Committee is looking at a private finance initiative (PFI), and we have enclosed a submission that we made to it recently. This is marginal in terms of its impact in GB. Under this type of initiative a company bids to design, manage, operate and repair under contract to the Housing Executive. We pay it a service charge, and ownership reverts to us at the end of 30 years, for example. PFIs are really intended for schemes rather than stock, whereas the "arms-length" approach pertains to the whole stock.

575.

There is the traditional public sector route. Our investment backlog is about £200 million, and there is a continuing need for investment. Full use of capital receipts could clear that backlog within a reasonable period of time. That is another model which is available, but it will keep borrowing within the public expenditure system.

576.

In Northern Ireland there is the issue of whether you can mix strategic and operational roles. We have performed a mixture of roles for 30 years reasonably successfully. There is an ideological view about mixing the provider role with the strategic role and the regulator. It is clear that as an organisation with mixed roles we have been able to influence urban renewal, health and so on that might not have been possible with landlord involvement.

577.

We have a fairly sophisticated tenant involvement framework with a range of options available to tenant groups from lobby groups through to a number of groups who manage some aspects of our responsibility. We detect no great movement among tenants to manage stock. Research indicates that tenants want good service, full information and full consultation without necessarily being involved in ownership and management. We need to bear this in mind.

578.

We have one fully working management tenant body, which is Strathfoyle in Derry. We tried an LSVT in Ballysally, Coleraine, but it did not get off the ground. We all hear the bad stories, but research tells us that tenants have a reasonably good view about the service provided by the Housing Executive.

579.

On small-scale versus large-scale landlords the view is that small is good, large is bad. Nevertheless, there are debates over fragmentation, economies of scale, common standards and so forth. In relation to large-scale voluntary transfers, there would be an addition of 10 to 12 small social landlords in an already very crowded marketplace here. Securing additional finance is probably more critical than any ideology, and I have already talked about that. The Housing Executive is accountable, the chairman of the board is accountable to a Minister and you can call us to account. That would not necessarily be the case with different structures.

580.

As you know, a joint Department of Social Development/NI Housing Executive study is looking at the options. We are using a firm of consultants who have a lot of experience in Glasgow and Birmingham. Interestingly, Glasgow told us last week that £60 million have been spent on consultancy fees, surveys of property, separate structures et cetera to reach the position where they are still deciding whether or not to go ahead. There is a big price to be paid before we decide. That study is due to report in about September.

581.

We have no difficulty with the current legislative proposal, and it should be proceeded with. We will complete the investigation into other models, and I understand the Minister has made a commitment to share it with the Committee. We have no answer at the minute. We need to be thinking of the best way to address those issues in a Northern Ireland context, rather than think that something like large scale voluntary transfer can easily be imported.

582.

The Chairperson: The whole thrust behind the large-scale voluntary transfers across the water was financial. During the last number of years housing has not been at the top of the list. The only way to deal with huge repair bills was through private finance. The situation here is completely different.

583.

Mr McIntyre: There is a backlog but it is not as significant, and there is a need for continued investment. However, we are not addressing the same thing.

584.

The Chairperson: The thrust across the water was purely financial.

585.

Mr McIntyre: In recent years, absolutely.

586.

The Chairperson: That pressure is not here. If the Housing Executive were to get the loans or the debt charges reduced from the £240 million currently being paid, would those repayments fall over the next five or ten years?

587.

Mr McIntyre: The profile will probably begin to fall off in 2004. I suppose there will be capacity to borrow further when that begins to ease.

588.

The Chairperson: My point is that financially the Housing Executive or the Assembly are not under the same financial pressure as their equivalents are across the water, so the drive for large-scale voluntary transfer is not the same.

589.

Mr McIntyre: Absolutely.

590.

The Chairperson: If the Housing Executive's debt and repayments were to fall, there might be a better chance. The Department of Social Development is talking to Finance and Personnel about capital receipts and loans. In four or five years' time the Housing Executive could be in a stronger financial position than it is today.

591.

Mr McIntrye: When the consultants report on the different models the Housing Executive and the Executive will see for themselves the best financial approach to take in funding that investment and it might just be the traditional public sector route.

592.

Sir John Gorman: It is a totally different situation that we retain, or notionally retain, all the proceeds of house sales. Presumably, if we went in for large-scale voluntary transfers we would still be in that position?

593.

Mr McCaughley: No. It is subject to an individual deal between the local authority and a particular housing association, but the broad guidelines show that the receipts would probably be split.

594.

Sir John Gorman: But in the absence of a local authority's having any interest in this and the stock's being to a great degree Housing Executive stock, where does the split occur?

595.

Mr McCaughley: The Government view is that under no circumstances must the new landlord reap a windfall beyond the date of the agreed transfer. All this is built in before you start - what grants you are going to charge and what is going to happen to any disposals after the date of transfer. In broad terms it is like a profit sharing arrangement at that stage.

596.

Sir John Gorman: So there is no huge benefit from the £240 million interest payment that is now coming out of the Executive's housing budget? There is no particular benefit from large-scale voluntary transfers?

597.

Mr McCaughley: I am sorry. I was talking about the disposal of the property in the future. What happens to the loan debt is critical to any of these calculations, and there are a number of scenarios. Scenario one is that you have a declining debt anyway. The question is who gets the windfall from that? Is it the Northern Ireland block, or is it raided by the Treasury?

598.

If it is a negative value local authority, it can ask the Government to buy it out. The Government will give Glasgow £964 million to buy out the debt, but they will want to ensure in the years ahead that nobody reaps the benefits from that without their having firm control over it.

599.

Mr ONeill: What happened to the budget when they bought Glasgow out?

600.

Mr McIntyre: The large-scale voluntary transfer in Glasgow has not happened yet. We were there two years ago. It is an interesting tale, because they were exactly as they are now. The Minister decided that, as opposed to a single transfer, she wanted the thing to fragment and break up into 10 or 12 housing associations around Glasgow. A number of investigations by funders and consultants told them two things. One, it could not be broken up because you need good stock to subsidise bad stock as far as the funder is concerned. Secondly, in any event, there is a leasing problem. You cannot use secondary leases in Scotland because of the law. So they are back to where they were two years ago, which is proposing a single transfer. Glasgow Housing Association was set up a couple of years ago employing 60 people - there are a lot of people in Glasgow City Council working this out - and they are now going for a single transfer again. They are supposed to be out balloting tenants in November this year, which will be difficult for them. So it has not happened yet.

601.

Mr O'Connor: We talked about public and private money. Private money invariably means that somebody somewhere gets a kickback. There has to be one somewhere when you are talking about private money. Obviously, the Executive should not be able to borrow at much more competitive rates from the Government than any other organisation. So if you are going to go down the road of privatising anything, which is what a large scale voluntary transfer (LSVT) is - you are privatising 10,000 houses, 30,000 houses, or whatever - somebody somewhere has to pay for it. In the end shareholders, bankers or somebody will get a dividend from the public purse. That is the difficulty that I have with it. Public money is there to benefit the public, not private individuals who can afford to finance such an operation. That is what invariably happens.

602.

Mr McIntyre: I agree with what Mr O'Connor is saying.

603.

The Chairperson: We will move on to the right to buy for housing associations.

604.

Mr McIntyre: The same rights should apply to all socially rented dwellings. We now have a single waiting list with a common allocation policy and performance measures and a common housing benefits scheme. We do not see why housing association tenants should not have the same right to buy.

605.

Some points have been made about the financial impact. The grant that the association got when it built the property is not recouped on sale. The grant pays for the discount lost. Financially, I am not sure that the consequences are as dire as may have been suggested.

606.

We also have to consider exclusions. For example, sheltered schemes are excluded under our scheme. It has also been suggested that small associations have their stock excluded and that rural areas and areas of high demand should be excluded, elements of schemes across the water. It must be borne in mind that we are playing a totally different ball game. Exclusions need to be examined very carefully from the equality point of view before you decide what, if anything, you are going to exclude.

607.

We are reviewing our right to buy scheme. A suggestion was made that we were doing it on the back of this recent inquiry. In fact, the Minister, in answer to a question last December, said that we were carrying this review out. It will be going to the board in May, then to the Minister, then out for consultation and then no doubt to the Committee.

608.

We are looking at joint purchase, tenancy qualification, repurchasing, what exclusions should or should not apply, historic costs and discount levels. We will also carry out a full equality assessment. Whatever scheme we end up with as a result of that should apply to all registered social landlords, stock, exclusions and everything. That is our view.

609.

Mr ONeill: The Committee's current examination of the right to buy has been mentioned. You also referred to supporting the right to buy of housing association tenants. House sales in Northern Ireland have surpassed what was sometimes regarded as the mythical figure of 70% of the housing stock.

610.

Mr McIntyre: We sold 90,000. Owner/occupied houses account for about 70%.

611.

Mr ONeill: That is fairly near the limit. Should we not look at those exclusions that we are talking about? I am aware that people must be treated equally. We are supportive of that in the Assembly, but a person to be housed must have equality of opportunity as well, which must be weighed against the right to buy. The right to social housing may be even more important than the right to buy.

612.

If the right to be housed is important, do we not need to re-examine the entire house sales policy? That includes what the Housing Executive has been doing and what is proposed for the housing associations. We must ensure that that most important right of all - the right to a house - can be catered for.

613.

Mr McIntyre: The key issue around the house sales scheme is probably what is included and what is not. People might suggest that some should be included that are not. We will be looking at the equality assessment impact from both sides of that coin, particularly with regard to rural housing and areas of high demand. There is an equality issue there. When it is put into the political domain, given how often that issue has been debated at the Housing Council, it will be a narrow outcome.

614.

The Chairperson: The whole issue is equality. Once a house is sold, it is gone forever. Selling houses in areas of high demand changes the whole focus of those areas from public housing to private housing, and whole areas are lost to emerging tenants.

615.

Mr McIntyre: We are going to look at repurchasing as part of a right to buy scheme, for example, in areas where houses are coming back on the market.

616.

The Chairperson: Why sell them in the first place if you are going to purchase them again? What about capping?

617.

Mr McIntyre: It is one of the issues that we will be examining as part of the review. The review is not completed, but we are looking at capping discounts that have been applied to schemes elsewhere.

618.

The Chairperson: What about subsidising tenants who live in areas of high demand to move elsewhere?

619.

Mr McIntyre: We will be looking at as part of the review. It is a very expensive entry point.

620.

The Chairperson: Yes, but giving people discounts to buy a house in an area of high demand and then having to buy it back is also a very expensive way of doing things. Not only that, but the house is lost for ever.

621.

Mr McIntyre: There are equality issues there as well to do with who gets a house and who does not.

622.

The Chairperson: It may not be the person who needs it.

623.

The other issue is about tenants buying their homes. What percentage of people who buy homes are not tenants?

624.

Mr McCaughley: That rule was partially changed about 18 months ago, and it is now part of the review. The issue was to what extent we would demand that you be a resident in the household to be party to the mortgage. About 18 months ago we tightened it so that the person had to be a relative, because people unrelated to the residents were buying the houses.

625.

The Chairperson: Yes, but even people who are related are buying the houses in areas of high demand - not the tenants. People who are on the waiting list for an area cannot get a house, and it is not the tenants who are stopping them - it may be their son, daughter or granddaughter.

626.

Mr McCaughley: They are buying them jointly; they cannot buy them in their own right. The simple answer is that that is part of the review as well. There are also residency rules concerning the purchasers.

627.

The Chairperson: Those are big issues.

628.

Mr McIntyre: And another one is that the more you cut the sales down, the less is the receipt as well.

629.

Sir John Gorman: I would like to give notice that I am strongly against the view that you are expressing. There is an equality issue here, and there is absolute equality between a social tenant a house owner and their families. They are entitled to be seen as part of the country's strategic housing programme. I would be very opposed to being at a Committee that carried an idea that house purchases and ownership were in some way less meritorious than house rental. I say that just in case there is any belief that we are all for one thing and not for the other.

630.

The Chairperson: No, selling homes to tenants is perfectly all right, but what I am saying is that a lot of tenants -

631.

Sir John Gorman: You used the phrase "lost for ever", Mr Chairman.

632.

The Chairperson: They are lost for ever.

633.

Sir John Gorman: No - they are being used by people.

634.

The Chairperson: They are lost for ever to public housing.

635.

Mr ONeill: I will rationalise this a bit. Perhaps we have reached that mythical threshold of the number of social houses that can be sold while leaving us with a balance between social and private housing. That is my concern, and that is what you are saying as well, Mr Chairman. This issue must be focused on, and I am glad to see, given the responses from the Executive, that that is happening.

636.

Mr O'Connor: To develop this point further, I am in favour of extending the right to buy to private landlords as well. We had evidence last Thursday from the Chartered Institute of Housing who, as has been suggested, could say "You are entitled to a £20,000 discount on your home. We will give you £20,000 to move out of the area and go elsewhere." My concern about that is that people may then buy their homes because they can only afford a mortgage of between £15,000 and £20,000.

637.

What would be your views on the impact of such a scheme? Would it create an us-and-them situation where, in an area of high demand, if you were to put a freeze on house sales, you would end up with an us-and-them estate: an estate totally for social rental. You would then lose the advantage that you have gained over the past years of estates being mixed tenure?

638.

Mr McIntyre: One of the possible benefits of the house sales scheme at the levels you have talked about, which probably were not anticipated at the time, is that it has done more to create mixed tenure in estates than any other Government policy that has tried to tinker with it. The real situation is not reflected in the 30 or 40 estates that you read about in the press, estates where there are serious problems of anti-social behaviour and so forth, which are predominantly publicly rented.

639.

There are 550 estates beyond that, mixed tenure estates with high levels of owner occupation. There are lots of pluses and minuses about this thing, which is why we will be presenting a fairly complicated policy. A lot of the decisions are political -should you have a house sales policy, and, if you do, what should you or should you not sell. Any policy has prices and trade-offs.

640.

Mr O'Connor: The Chairman talked about the situation where if I, as a tenant, purchase my home, that property is lost forever to the public sector. Surely people have taken advantage of discounts and things in the past. Is there room for a buy-back clause for the Executive? For example, if a house is in an area of high demand, and the Executive sells it to me, when I want to sell it first refusal could go to the Executive under the Acquisition of Satisfactory Houses scheme (ASH), or whatever, to ensure that social provision is maintained in that area.

641.

Mr McIntyre: Again, that is one of the issues within the terms of reference of the review.

642.

The Chairperson: Good. Thank you very much.

MINUTES OF EVIDENCE

Tuesday 8 May 2001

Members present:

Mr Cobain (Chairperson)

Mr Hamilton

Mr B Hutchinson

Mr O'Connor

Mr ONeill

Mr Tierney

Witnesses:

Mr A Hassard ) Belfast City Council

Mr W Francey )

643.

The Chairperson: Good afternoon. You are all welcome to the Committee.

644.

Mr Francey: I thank the Committee for allowing the Belfast City Council to present its views today, and I congratulate the Committee on taking the initiative to examine these important issues.

645.

A written submission has been made on behalf of Belfast City Council, but, as stated in the covering letter, the council itself has not had an opportunity to consider or endorse that submission. However, we will be presenting it to the relevant council committee on 21 May. If there is any significant change in the council's view at that time, we will notify the Committee.

646.

Even though the views contained in the submission are an officer response, they are based on views expressed by the council in reviews dating back to the late 1980s.

647.

The council was asked to comment on private sector renewal, and with regard to that we commented on the rules governing grants. The council recognises that there are reasons for a shift in the balance between discretionary and mandatory grants. However, there are considerable qualifications about moving excessively towards discretionary grants. Since the late 1980s the council has supported the idea of having a strong statutory link to mandatory grants and notices which are served under the Public Health Acts or the Rent Order (Northern Ireland) 1978 in relation to houses in the controlled sector.

648.

The council recognises that such grant aid spent on maintaining housing conditions is difficult to justify through investment appraisals. However, Belfast City Council feels that expenditure of that type should not be tested in that way, particularly in relation to notices under the Public Health Acts. The proper yardstick for the appropriateness of that expenditure is the amount of hardship relieved. The people involved are usually from the most extreme social conditions, and the work is of a minor first-aid nature.

649.

The other qualification is that there need to be rules governing the exercise of any discretion regarding the payment of grants. Grant expenditure and scarce resources need to be allocated to areas of greatest social need and to the worst housing conditions. A crude application of mandatory grants cannot be expected to deliver that. A good example of a blunt instrument was the change in the rules governing mandatory grants for owner/occupiers where a cost ceiling of £500 was imposed a number of years ago.

650.

When that was introduced, the council expressed the view it had previously expressed about the importance of retaining the mandatory link with the controlled sector. It pointed out that using that kind of instrument without means testing, if it were to achieve its ostensible purpose, would probably result in a strong downside. Owner-occupiers who had difficulty financing essential repairs would be the casualties of that kind of approach.

651.

There are arguments for moving to discretionary grants, but we feel that the mandatory approach serves the purpose of allocating scarce resources best provided that it is linked with means testing where appropriate.

652.

The Chairperson: We will cover each sector as we go along. Are you saying that mandatory grants are more focused?

653.

Mr Francey: Yes - with means testing. We recognise that there can be administrative difficulties.

654.

The Chairperson: I was going to ask you about that.

655.

Mr Francey: Mr Hassard has more day-to-day contact with these problems. We will provide any clarification necessary.

656.

The Chairperson: The Committee agrees with mandatory grants - for different reasons, of course. The difficulty is that the administrative costs of means testing probably outweighs the amount you want to pay out.

657.

Mr Hassard: We recognise that there are difficulties with that. However, as Mr Francey has said, there is merit in trying to focus public money into the areas of most need. There may be other ways round this. However, for tenants and landlords who are subject to the Rent (Northern Ireland) Order 1978 in the controlled sector, where only subsidised rents are available to allow for repairs, there still needs to be some mechanism to enable repairs to be carried out and so protect those tenants.

658.

Some of the money for repair grants is being spent on vacant property that is subject to a public health notice. Ultimately, this is seen as an investment by people who want to bring such stock back into use either to let as a furnished property or to sell. That is a drain on public money. We recognise that there are difficulties, but there is a need to get heads around the idea of targeting people in most need, and means testing is one of the ways of doing that.

659.

Mr Francey: Public health notices are not discretionary. The criteria are statutory and have been in existence for a long time. They have been refined over the years by case law, but essentially the constraints are well defined.

660.

At the risk of stating the obvious, it is sometimes worthwhile as a starting point to recognise that HMO (houses in multiple occupancy) tenants are characterised by the special difficulties they face. These derive largely from the nature of HMOs. The sense of care and responsibility that exists between members of a single household cannot be relied upon to ensure the health, safety and welfare of HMO tenants where, by definition, there is no such family or household link.

661.

For that reason statutory standards that have been laid down, which address amenity matters and things like fire precautions, are needed to cover this risk, which is of a special type that is not found in normal houses.

662.

The statistics, to our knowledge, are not detailed on this sector, and we are relying on evidence from a general house conditions survey. A special survey of houses in multiple occupation was done about 10 years ago, and there are statistics in the Housing Executive's draft strategy. However, from our analysis of those statistics, it is obvious that there is a high level of substandard conditions. We know that almost one in ten of the houses in this sector are unfit. However, about a third do not meet the standards that govern things like amenities and fire precautions. According to the figures, I believe that the Housing Executive in Belfast served something in the region of 900 notices in a sector of about 4,500 houses. That is a very substantial proportion.

663.

The other statistics that are presented alongside those by the Housing Executive raise some questions about the effectiveness of the measures taken to ensure that houses are brought into compliance with those regulations to secure appropriate standards of health and safety. This underlines our belief that there are difficulties for tenants if the level of regulatory activity is determined by the level of grant funding. That is why we have always felt that there is a need to separate the regulatory and management functions. In fact, that is something which, as far as I am aware, was presented by the Government at the time of the 1994/96 Housing Policy Review.

664.

Our position is that there needs to be a separate application of statutory remedies, just as there is in the controlled sector - through the use of whatever powers are available, be it the Rent (NI) Order 1978 or the Public Health Acts - rather than have it limited in an arbitrary sense. This is an uncontrolled sector. By and large landlords are not in the sort of financial straits that tenants or even landlords in some parts of the controlled sector face. The health and safety of tenants should be paramount.

665.

The Chairman: Good.

666.

Mr Francey: The third issue to do with the private rented sector and regulation therein is the Rent Order. We are aware that a review has been initiated by the Department on the workings of the Rent Order and the wider issue of regulation. It is the council's intention to press again to have weaknesses in the Order addressed, and these are issues that Belfast City Council has been pressing for nearly 20 years in some cases. However, there is one point that also applies to the other points about the regulation of housing in multiple occupation. I know you have heard this before because, since our written submission was made, I have seen the submission made by the Chartered Institute of Environmental Health. Belfast City Council has repeatedly made the point that consideration should be given to whether there would be benefits for tenants from creating a comprehensive regulatory function for district councils on housing matters.

667.

The council has been concerned that, while the remedies that are available to councils are applied vigorously and rigorously, it is difficult to explain why some of them, such as notices for dealing with unfit houses that are widely recognised as having been rarely, if ever, used, must be seen as complementary. I assume that, as with houses in multiple occupation, there are two issues, one perhaps being the investment assessment of expenditure of that type. I am speculating about that. We feel that the remedies should be used in appropriate circumstances.

668.

We have made the point in the past that the range of remedies that are available to tenants in Northern Ireland has always been less than is available in Great Britain. One omission is the power to serve a notice on houses that are not unfit but are in substantial disrepair, a section 190 notice under the 1985 Housing Act.

669.

We feel that that power could be applied beneficially in Northern Ireland. It is not available, the council has pressed for its introduction, and we feel that the arguments for that are strong. The fundamental point is that consideration should, at least, be given to a universal enforcement role for councils. Councils are well suited to that. They have a strong culture of regulation; councils are responsible for hundreds of regulations across a wide range of functions. That is generally supported by legal resources, and the result is that regulations are applied cost effectively.

670.

A specific issue that the council has repeatedly pressed about is the need to address the weakness in the Rent (Northern Ireland) Order 1978. There are two principal points there. We have direct experience, gathered over many years and going back to the introduction of the Order in 1978, of landlords avoiding their responsibility to comply with a certificate of disrepair in a regulated tenancy simply by living outside the jurisdiction. A simple remedy for that is to define an owner in the same way as in the Public Health Acts. The consequence of that is that the agent, the person who manages the property and collects the rent, would be responsibile and could, therefore, be held to account and required to comply with any such notice. This has worked well with public health notices for over 100 years. In fact in 1988 the Department acknowledged that the merits of that had been recognised and said that changes would be made, but those changes did not materialise in the Housing (Northern Ireland) Order 1992.

671.

Secondly, I find it difficult to understand why changing the regulation was resisted, but the Rent Order defines the respective repairing responsibilities of tenants and landlords. However, that does not apply where there is a tenancy agreement that is not compatible with that. The tenancy agreement takes precedence if there is any inconsistency.

672.

I cannot help thinking that there would be uproar if there were any attempt to alter the repairing obligations of tenants and landlords in public sector housing. When the Order was introduced the Minister at the time pointed out that agreements of that nature should not be lightly set aside. We did not consider it to be a question of setting it aside lightly, but rather of simply identifying that one of the principles of the Rent (Northern Ireland) Order 1978 was to establish rent parity with the public sector. In return for that, one would assume, landlords should have similar repairing obligations to the public sector landlords.

673.

The solution would have been simple -repeal article 40, define the obligations of landlords and tenants and to give them universal application.

674.

Defining an enforcing authority for rent book regulations is important. Those regulations have been on the statute book for many years, but no one has been assigned responsibility for enforcing them. That is easy to put right, and representations have been made, not just by councils, but also by groups such as the Housing Rights Service.

675.

Those are the specific points that we raised in the submission.

676.

The Chairperson: Thank you very much.

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LIST OF WITNESSES WHO GAVE ORAL EVIDENCE
TO THE COMMITTEE

Department for Social Development

Chartered Institute of Environmental Health

National Union of Students (UK) and the Union of Students in Ireland

Northern Ireland Tenants' Action Project

Northern Ireland Co-ownership Housing Association Limited

Council of Mortgage Lenders

The Chartered Institute of Housing in Northern Ireland

Northern Ireland Federation of Housing Associations

The Northern Ireland Housing Executive

Belfast City Council

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LIST OF WRITTEN EVIDENCE SUBMITTED
TO THE COMMITTEE

LIST OF WRITTEN EVIDENCE SUBMITTED TO THE COMMITTEE
(THESE ARE PUBLISHED IN VOLUME 2 OF THIS REPORT)

 

The Northern Ireland Federation of Housing Associations

Belfast City Council

Castlereagh Borough Council

Simon Community Northern Ireland

Council of Mortgage Lenders Northern Ireland

Northern Ireland Housing Executive

Environment and Heritage Service

Ards Borough Council

Northern Ireland Co-ownership Housing Association Limited

Environment and Heritage Service

Northern Ireland Tenants Action Project

Ballynafeigh Housing Association Ltd

Hearth Housing Association

Ballymoney Borough Council

Queens University Belfast

Council of Mortgage Lenders Northern Ireland

Fermanagh District Council

Chartered Institute of Housing in Northern Ireland

Paddy Hillyard, Paddy Gray and Ursula McAnulty

Housing Rights Service

Shelter (Northern Ireland)

Health Action North and West Belfast

Coleraine Borough Council

National Union of Students (UK) and the Union of Students in Ireland (NUS - USI)

Disability Action

Cookstown District Council

Northern Ireland Tenants Action Project

Co-ownership Housing

Donacloney Housing Association Ltd

Presbyterian Housing Association (NI) Limited

Northern Health and Social Services Board

Ballymena Borough Council

Flax Housing Association Ltd

Craigavon Borough Council (Public Services Liaison Committee)

Habinteg Housing Association (Ulster) Ltd

Chartered Institute of Environmental Health

North Belfast Mission Housing Society Ltd

Newtownabbey Borough Council

Open Door Housing Association (Northern Ireland) Ltd

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GLOSSARY

 

BTS Below Tolerable Standard

DETR Department of Environment, Transport and Regions

DOE Department of Environment

DSD Department for Social Development

EHO Environment Health Offices

HAG Housing Association Grant

HHSRS Housing Health and Safety Rating System

HMO House in Multiple Occupation

LSVT Large Scale Voluntary Transfer

NICHA Northern Ireland Co-Ownership Housing Association

NIHE Northern Ireland Housing Executive

PRS Private Rented Sector

PRTB Private Residential Tenancies Board

PSBR Public Sector Borrowing Requirement

RTB Right to Buy

VPG Voluntary Purchase Grant

Volume 2

VOLUME 2 - WRITTEN SUBMISSIONS RELATING TO THE REPORT

COMMITTEE FOR SOCIAL DEVELOPMENT

1. The Committee for Social Development is a Statutory Committee of the Northern Ireland Assembly, established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement and under Assembly Standing Order No 46.

2. The Committee has a scrutiny, policy development and consultation role with respect to the Department for Social Development and has a role in the initiation of legislation.

3. The Committee has power:

 

    • to consider and advise on Departmental budgets and Annual Plans in the context of the overall budget allocation;

 

    • to approve relevant secondary legislation and take the Committee Stage of relevant primary legislation;

 

    • to call for persons and papers;

 

    • to initiate inquiries and make reports

 

  • to consider and advise on matters brought to the Committee by the Minister for Social Development.

4. The Committee was established on 29 November 1999 with 11 members including a Chairperson and Deputy Chairperson and a quorum of 5. The membership of the Committee is as follows-

 

    • Mr F Cobain (Chairman)

 

    • Ms M Gildernew (Deputy Chairperson)

 

    • Sir John Gorman

 

    • Mr T Hamilton**

 

    • Mr B Hutchinson

 

    • Mr G Kelly

 

    • Mr D McClarty *

 

    • Mr D O'Connor

 

    • Mr E ONeill

 

    • Mr M Robinson

 

    • Mr J Tierney

 

  • Mr S Wilson

5. All correspondence should be addressed to the Clerk to the Committee for Social Development, Room 419 Parliament Buildings, Stormont, Belfast BT4 3XX.

* Mr McClarty was removed from the Committee on 6 February 2001.

** Mr Hamilton was appointed to the Committee on 6 February 2001.

TABLE OF CONTENTS

VOLUME 2

WRITTEN SUBMISSIONS

The Northern Ireland Federation of Housing Associations
Belfast City Council
Castlereagh Borough Council
Simon Community Northern Ireland
Council of Mortgage Lenders Northern Ireland
Northern Ireland Housing Executive
The Northern Ireland Federation of Housing Associations
Environment and Heritage Service
Ards Borough Council
Northern Ireland Co-ownership Housing Association Limited
Environment and Heritage Service
Northern Ireland Tenants Action Project
Ballynafeigh Housing Association Ltd
Hearth Housing Association
Ballymoney Borough Council
Queens University Belfast
Council of Mortgage Lenders Northern Ireland
Fermanagh District Council
Chartered Institute of Housing in Northern Ireland
Paddy Hillyard, Paddy Gray and Ursula McAnulty
Housing Rights Service
Chartered Institute of Housing in Northern Ireland
Shelter (Northern Ireland)
The Northern Ireland Federation of Housing Associations
Health Action North and West Belfast
Coleraine Borough Council
National Union of Students (UK) and the Union of Students in Ireland (NUS - USI)
Disability Action
Cookstown District Council
Northern Ireland Tenants Action Project
Co-ownership Housing
Simon Community Northern Ireland
Donacloney Housing Association Ltd
Presbyterian Housing Association (NI) Limited
Northern Health and Social Services Board
Ballymena Borough Council
Flax Housing Association Ltd
Ballynafeigh Housing Association Ltd
Craigavon Borough Council (Public Services Liaison Committee)
Habinteg Housing Association (Ulster) Ltd
Chartered Institute of Environmental Health
Hearth Housing Association
North Belfast Mission Housing Society Ltd
The Northern Ireland Federation of Housing Associations
Newtownabbey Borough Council
Open Door Housing Association (Northern Ireland) Ltd

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Written Submissions

Written Submission by:
THE NORTHERN IRELAND FEDERATION OF
HOUSING ASSOCIATIONS

16 May 2001

Many thanks for your letters of 9th and 10th May 2001.

Draft Transcript of NIFHA's Oral Evidence

I enclose minor amendments to pages 4 and 5 of the transcript. Mr Kelly felt these will clarify the points he was making.

Further Comments of Relevance to the Housing Inquiry

We appreciate the opportunity to make a few points to supplement what we said during the abbreviated session on 3rd May.

They are:

(a) The policy questions should be considered in the light of the Programme for Government's overall aim of housing policy and the following more specific criteria:

 

    • the best long-term interests of existing tenants of social housing;

 

    • the needs of present and future housing applicants;

 

    • the best use of taxpayer's money; and

 

  • maintaining the stability and efficient working of the housing market.

(b) Small-scale transfer of NIHE stock should be tried in appropriate circumstances. It has the potential to deliver earlier improvement work to the tenants while "freeing up" millions of pounds of the Assembly's housing budget.

(c) The Housing Executive deserves credit for having largely achieved the objectives originally set for it.

Thirty years on, in the context of a local Assembly and transformed housing conditions, we feel it is appropriate for the Committee to review the role of the Housing Executive.

Under devolution, Northern Ireland has ten government departments including the Department of Social Development whose work is scrutinised by this Committee. For a population of only 1.7 million, we believe it would be logical for housing strategy to be the direct responsibility of the Department.

The Housing Executive staff engaged in strategic work should be given every encouragement to take up new posts in the Department, where their skills and experience would be invaluable.

The new Housing Executive would concentrate on its landlord function, it would be "business as usual" for the great majority of Housing Executive staff and tenants would be unaffected.

This redistribution of functions would put the DSD in a better position to integrate housing policy with related social and economic policies such as employment, education and health.

The Department would be ideally placed to impartially inspect the quality of service delivery by all the social landlords.

In Scotland, Wales, England and the Republic of Ireland the appropriate government department has responsibility for housing strategy. We feel there are even sounder reasons for adopting this arrangement in Northern Ireland.

(d) A policy of giving public subsidy to encourage tenants of social housing to become owner-occupiers is worthy of consideration but it needs to strike a reasonable balance between the aspirations of existing social tenants and the needs of those who badly need social housing.

It should also carefully consider the total value of the public subsidy per year and how it should be distributed between tenants wishing to purchase.

Thirdly, the policy should take account of the fact that housing associations are independent voluntary organisations which are funded in an entirely different way from the NIHE. The policy should not undermine the viability of any provider of social housing.

The Federation has commissioned independent research which will illuminate the subject and point towards a more appropriate scheme to help social tenants satisfy their home ownership ambition.

We trust the Committee and the Assembly will draw on our research to inform their deliberations.

CHRIS WILLIAMSON
Director

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Written Submission by:
BELFAST CITY COUNCIL

1 May 2001

I refer to your letter of 12 April 2001 regarding the above Housing Inquiry.

I have enclosed for your attention a response from the Health and Environmental Services Department. A copy of which was faxed to you last week.

I would emphasise that this is an officer response which has been based on the Council's previously stated positions regarding Private Sector renewal, Houses in Multiple Occupation and the regulation of the Private Rented Sector. The response will be considered by the Council's Health and Environmental Services Committee at its meeting on 21 May 2001.

Should you require any additional information please contact me or Andrew Hassard, Head of Health Protection at extension 3281.

WILLIAM FRANCEY
Director of Health and Environmental Services

Introduction

Belfast City Council's Health & Environmental Services Department welcomes this opportunity to make a formal submission to the Social Development Committee's Housing Enquiry. This is a departmental submission and will not be considered by the Health & Environmental Services Committee until its meeting on 21 May 2001. However the content of this submission is based on the previous comments made by the Council during the 1996 Housing Policy Review 'Building on Success - proposals for future housing policy'.

Any review of Housing Policy is of considerable interest to the Council in light of its historical and continuing role in housing and the profound impact which housing policy has on public wellbeing.

The Council's Health & Environmental Services Department has considerable housing experience particularly with regard to the regulation and enforcement of standards.

Private Sector Renewal

In recognition of the need to make the most effective use of the public resources which are currently available for grant work a shift in the balance between mandatory and discretionary approaches to grant schemes could be supported but we believe that there is still a need for mandatory grants in some circumstances. Criteria based on need should also be established to enable the appropriate exercise of any discretion which may be allowed to the Housing Executive for grant purposes.

The Council has always supported the link between Public Health Notices and Repairs Grants on the grounds that expenditure on first aid repairs to deal with conditions which are prejudicial to health should be assessed against the considerable hardship relieved rather than against the short-term nature of any improvements in the housing stock. However the present regime, which provides mandatory repair grants for work carried out under public health notices, has not always resulted in the appropriate targeting of public funds and has created some operational difficulties for Environmental Health Departments. In 1996 the Government introduced legislation to limit to £500 the maximum amount of repairs grant available to owner occupiers, however landlords in the private rented sector and the owners of vacant properties can still qualify for repairs grant up to a maximum of £5,500 for each notice served regardless of their means or of the potential income from their property.

It would therefore be considered appropriate that more targeted means testing should apply to most cases of work carried out under public health notices. There are however exceptions which should apply. Landlords of protected tenancies which are controlled under The Rent (NI) 1978 can only charge what the Rent Officer sets as the legally recoverable rent for the property. This will usually be equivalent to a Housing Executive (subsidised) rent. Indeed some protected tenancies even have their rent limited to their 1978 value. We would suggest therefore that it would be appropriate, in view of the limited income from protected tenancies, to continue to apply where work is carried out following the issue of a public health notice or a certificate of disrepair.

The increasing level of owner occupation is likely to involve a proportionate increase in the number of owner occupiers who will face difficulty in financing necessary maintenance. Consideration should be given to mechanisms, including grant assistance, to assist owner occupiers to ensure that the housing stock is maintained in an appropriate level of repair.

Houses in Multiple Occupation and Regulation of the Private Rented Sector

The Council welcomed the emphasis that the 1996 Housing Policy Review placed on the necessity of separating regulatory and delivery functions. However the Council was disappointed that the review failed to acknowledge the current role that District Councils have an improving housing standards through the enforcement of statutory repair remedies and to consider the merits of further developing that role.

It is clear that District Councils are in many respects better placed to fulfil the role of regulator of housing standards than the Northern Ireland Housing Executive due to their greater accessibility, democratic accountability and their independence from owners of property. The Housing Executive is not only the major landlord in the province but has also, in certain circumstances, received a number of housing enforcement notices issued by Belfast City Council. In addition district councils have wide ranging and extensive enforcement and regulation experience, including the enforcement of housing standards. In this context we would suggest that the regulation and enforcement of housing standards, including the assessment of fitness, would be better placed with District Councils.

It should also be noted that the existing statutory remedies for dealing with disrepair in the private rented sector are inadequate. They compare unfavourably with those in England and Wales where section 190 of the Housing Act 1985 allows local authorities to require a landlord to effect repairs to those of their properties which are in disrepair but not unfit. This provision has never been extended to Northern Ireland and the Council is of the opinion that its introduction would provide a means to prevent significant numbers of houses from slipping into unfitness. In line with the Council's stated position regarding regulation and enforcement it is of the opinion that such a power if enacted would best be discharged by district councils.

Houses in Multiple Occupation

It has long been recognised that some of the worst living conditions are to be found in houses in multiple occupation. The existing powers have often been less than effective in remedying many of the unsatisfactory conditions that regularly arise in this section of the privately rented sector. It is clear that there is a need for a properly targeted pro-active policy of enforcement supported by an appropriate legislative framework if the health and safety of all people living in HMOs is to be protected. It would be a matter of concern if cash limits on available grant aid were to determine the level of regulatory activity being applied to ensure adequate standards of health and safety in HMOs. Figures contained within the Housing Executive's draft strategy for HMOs published in June 1999 would tend to raise some questions in this regard. These indicate that since 1993 a total of 893 notices had been served however only 267 grant schemes had been completed, and only 7 prosecutions had been taken. It should also be noted that the section of landlords within the private rented sector who are least likely to apply for grant are often providing accommodation for the most vulnerable people in society. Against this background we believe that consideration should be given to separating the grant aiding and regulatory roles. District councils who are already involved in HMOs with respect to a number of public health issues and for the reasons previously outlined, are well placed to take on the regulatory function with regard to HMOs.

The current definition of an HMO has given rise to a number of difficulties. Many shared houses particularly those occupied by students are excluded from the provisions. The DETR in Great Britain has recently suggested that there should be a new clearer definition of an HMO namely:

 

  • a house occupied by persons who are not all members either of the same family or of one or other of two families.

 

  • The application of this definition should be applied in Northern Ireland.

The Government has previously given a commitment to introduce a mandatory licensing scheme for HMOs in England, Wales and N Ireland. In Northern Ireland the Housing Executive have proposed a voluntary licensing scheme however such a scheme is unlikely to adequately address the worst houses in multiple occupation which often house the poorest and most vulnerable members of society. The Council would like therefore to see the introduction of a mandatory licensing scheme as soon as is practicable within Northern Ireland.

The Rent (Northern Ireland) Order 1978

Any review of the private rented sector needs to include a review of the Rent Order. It is understood that the Minister for Social Development has commissioned a review of this Order and the Council looks forward to being consulted during the review. However the Council would draw the Committee's attention to the shortcoming in the Rent Order which it has previously brought to the Department's attention during the 1996 Housing Policy Review.

The restrictive definition of 'owner', in relation to regulated tenancies, and the opportunity for landlords to place all of the responsibility for repairs on tenants continues to create circumstances which place tenants in this sector at a considerable disadvantage.

It is therefore the council's view that the definition of 'owner' under the Rent Order should be extended to include the person who receives the rent of the property and that statutory repairing obligations under the Order should apply irrespective of any express or implied terms of the contract of tenancy.

The Council would also wish to see the enforcement procedure for Certificates of Disrepair extended to allow the courts to impose a daily penalty where an Order of the court has not been compiled with. This would ensure that landlords who had previously been convicted for contravening an Order of the Court would not be able to escape further sanction if they continued to fail to honour their repairing obligations.

The Rent Order requires all landlords to provide tenants with rent books, and appropriate regulations have been enacted. However the Rent Order does not designate any enforcing authority for these provisions. It is the experience of the Council's environmental health staff that many landlords ignore these requirements. Consideration should be given to allocating this enforcement responsibility to district councils. This would not only provide tenants with greater security but would also facilitate many of the investigations carried out by Environmental Health Officers into allegations of harassment and illegal eviction.

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Written Submission by:
CASTLEREAGH BOROUGH COUNCIL

27 April 2001

Terms of Reference

 

    • Private Sector Renewal

 

  • Houses in Multiple Occupation and Regulation of Private Rented Sector

Introduction

The Northern Ireland Chief Environmental Health Officers' Group (CEHOG) is made up of the Group Chief Environmental Health Officers from Northern Ireland's four Environmental Health Group Committees, the District Chief EHOS or Directors of Environmental Health from each of the country's twenty six District Councils, along with the Chief Environmental Health Officer of the Department of Health, Social Services and Public Safety. Their principal purpose is to bring a co-ordinated approach to the delivery of Environmental Health services throughout the Province and, where appropriate, to advise and respond to proposed government policies.

District Councils, through their Environment Health departments, daily contribute to the protection of people's health, safety and welfare in the field of housing, primarily through their powers under the Public Health Acts and the Rent (NI) Order 1978. The Environmental Health profession (and their historical predecessors) have long had an interest in housing and would welcome any opportunity to comment on factors that impact on housing conditions.

Private Sector Renewal

The 1996 House Condition Survey estimated that there are 602,500 dwellings in Northern Ireland. One fifth of the housing stock was built before 1919 and two thirds was built post 1945. The social rented sector (NIHE and Housing Associations dwellings) has dropped to approximately 25% of the stock primarily because of the house sales policy.

Disrepair and unfitness are primarily problems of the private sector. The CEHOG consider that the current unfitness level of 7.3% is unacceptable. Of these 50% are owner occupied, 29% are vacant and 12% are privately rented. There is a similar picture of disrepair with 88% of privately rented dwellings having repair problems. The age of the dwelling is particularly significant with six out of seven pre-1919 houses having disrepair problems.

Addressing Disrepair

CEHOG understands that it is government policy to move from a mandatory to a discretionary grants system. It is recognised that grants play an essential role in supporting the maintenance and improvement of housing stock but would urge that these be directed at those most in need. In particular the present system which provides for a mandatory repairs grant for work carried out to fulfil the terms of a Public Health Notice is not the most appropriate use of public funds. The use of the legislative system by owner occupiers is resource intensive for Environmental Health departments and, given that individual repair grants are generally of low value (limited to £500 maximum to owner occupiers since 1996), the overall gain in most cases is insufficient to halt the slide into disrepair.

Notwithstanding CEHOG's concerns about conditions in the private rented sector, it is also considered inappropriate that landlords, as well as owners of vacant property, can still qualify for a repair grant up to a maximum of £5,500 irrespective of their own means or any potential income from the market rents that they charge for their property. CEHOG believe that this grant should be means tested.

CEHOG would therefore support a move from a mandatory to a discretionary grants scheme with appropriate targeting and means testing.

Addressing Unfitness

Although unfitness has fallen from the unacceptably high levels of the early 1970s CEHOG considers that even the present level of 7.3% is still unacceptable. It is particularly concerned about unfitness in some of the more rural areas, like Fermanagh and Mid-Ulster, where there are still significant problems with isolated, country dwellings often occupied by single, elderly people.

The reduction in unfitness is probably due to three main factors; new build, slum clearance and the grants system. It would, however, be an over simplification to look at any of these factors in isolation as the "flow" of dwellings into and out of unfitness is a complex issue.

Although the Northern Ireland Housing Executive has achieved a great deal over the last 30 years CEHOG still has certain reservations regarding current policy. As with disrepair, CEHOG would like to see the Housing Executive targeting those sectors in greatest need, in particular, the high levels of unfitness in the private rented sector and some parts of the owner occupied sector.

CEHOG would also wish to see the Housing Executive make greater use of their powers to deal with individual unfit dwellings. At times there is a perception that the NIHE is more comfortable with its role as a housing provider rather than as a regulator of housing services.

The proposed Housing Bill provides the opportunity to release the Housing Executive from its current conflicting role as the province's largest landlord whilst simultaneously being responsible for regulating housing standards. Environmental Health Officers working for local authorities have the expertise to interpret the fitness standard (they do so for the Rent Order) and have ample experience in the enforcement field. They can act independently and objectively, and their general background and expertise in health and safety will be invaluable when the anticipated Health and Safety rating system replaces the current fitness standard.

Addressing Problems with Area Action

Although there is not the same potential for the widespread slum clearance and redevelopment action that was undertaken in the 1970s and early 1980s, CEHOG believe that any future urban renewal must be based on objective and accurate information. Some of the recently designated Urban Renewal Areas were previously Housing Action Areas where the Housing Executive invested heavily to improve housing conditions and reduce unfitness. It is difficult to accept therefore the reported high levels of unfitness in these areas given the previous initiatives.

CEHOG believe that there should be independence in the assessment of the fitness standard by a body such as the District Council's Environmental Health department.

Houses in Multiple Occupation and Regulation of the Private Rented Sector

Houses in Multiple Occupation

CEHOG recognises that HMOs have an important role to play in the provision of housing for some sections of society. For young people, such as students in college, or those needing ready mobility to follow work, such accommodation fulfils a purpose. Unfortunately however HMOs can also be a permanent home for some of the most socially or economically disadvantaged in our population.

Poor fire and health and safety standards are all too common, along with disrepair, overcrowding and inadequate facilities resulting in some of the worst and most dangerous living conditions.

CEHOG supports the government's aim that HMOs should be safe and should provide acceptable living conditions and would therefore see the proposed housing bill as an opportunity to address some of the present shortcomings.

Definition of HMO

CEHOG recognises that there are concerns with the legal definition of HMO. The present definition is "a house that is occupied by persons who do not form a single household". It is considered that this is too restrictive. It has given problems in that many shared houses, particularly those occupied by students, have been excluded from the provisions of the legislation. CEHOG would welcome the adoption of the new definition suggested by the DETR in their consultation paper "Licensing of Houses in Multiple Occupation - England", namely; "a house occupied by persons who are not all members either of the same family or of one or other of two families".

Enforcement Strategy

CEHOG is concerned that the Housing Executive's strategy in relation to HMOs is primarily grant led rather than enforcement led. It is CEHOG's opinion that a strategic approach is needed to identify and prioritise those HMOs where problems are most severe and then utilise the appropriate mechanisms to ensure statutory compliance. Grant assistance should be a separate consideration. Public safety, rather than the willingness to seek grant aid, should be the driving force. CEHOG believe that there is a compelling argument for separating the two functions of statutory enforcement and grant provision and the proposed housing bill could be the vehicle to give effect to these proposals.

Area Approach

While recognising that there is wisdom in he Executive's strategy in having dedicated HMO units, CEHOG would question the fact that there are only two to cover the whole of Northern Ireland. It would be difficult to pursue an active enforcement policy for premises in, for example Enniskillen, when the officers involved are based in Coleraine. Grant provision however can be much more easily administered from afar compared to statutory enforcement.

Licensing

CEHOG supports the government's commitment to the introduction of a mandatory licensing scheme for HMOs in England, Wales and Northern Ireland and would call for this to be implemented locally as soon as is practicable.

It is considered that the Housing Executive's proposed voluntary licensing scheme, though laudable, would not be successful in addressing the main problems associated with HMOs. Environmental Health officers' experiences with this sector would indicate that such a proposal was unlikely to attract those landlords whose properties present the greatest risk and which often house the poorest and most vulnerable members of our society.

Regulation of the Private Rented Sector

Some aspects of the problems of regulation of the private rented sector have already been touched on in the Private Sector Renewal section.

Houses in Disrepair (but not unfit)

In England and Wales local authorities have powers to require a landlord to carry out repairs to tenanted property which is in disrepair but is not unfit (Section 190 Housing Act 1985). This helps in that it can prevent some houses from "sliding" into unfitness. Such powers, however, were never extended to Northern Ireland. Locally District Councils can usually only bring about repairs by using the Public Health Act. This however is limited in that it can only be used in respect of disrepair that could give rise to risk of illness or disease, rather than risk of physical injury.

CEHOG would urge that powers similar to those in Section 190 of the Housing Act 1985 be granted to District Councils in Northern Ireland.

Amendments to the Rent Order

A provision of the Rent (NI) Order 1978 requires all landlords to provide their tenants with a rent book and appropriate regulations were made. Unfortunately though, the primary legislation failed to designate any enforcing authority for these provisions so many landlords deliberately ignore the requirements. CEHOG would urge that any future Housing Bill would contain an amendment designating District Councils as the enforcing authority for the Rent Book Regulations.

Enforcement of the Housing Fitness Standard in NIHE Property

Although not strictly a matter of regulation of the private rented sector, this is a matter that could well be addressed in a future Housing Bill.

In theory the fitness standard is applicable to all housing but in practice it does not apply to NIHE owned property for the simple reason that the NIHE cannot take enforcement action against itself. The 1996 House Condition Survey would indicate that the Executive owned some 23% of the total housing stock (138000 dwellings) of which over 3000 were unfit. Executive tenants undoubtedly should be afforded the same protection as those in the private rented sector. CEHOG therefore believe that District Councils should be given the responsibility for enforcing the fitness standard in NIHE owned property.

Conclusion

The Chief Environmental Health Officers' Group are grateful for the opportunity to respond to the Social Development Committee's letter of 15 February 2001.

Whilst we acknowledge the work done over the years by the Northern Ireland Housing Executive we would nonetheless recommend that Environmental Health departments should play a much greater role in the enforcement of housing standards. This could be done by increased partnership working with the NIHE, using service level agreements or by the transfer of certain regulatory functions to District Councils. This would allow the Housing Executive to concentrate on their strategic and facilitating functions while reducing any potential conflict of roles that they may face.

Summary of Recommendations

 

    • Grants should be discretionary, targeted and means tested.

 

    • Unfitness action should be targeted with a greater use made of statutory powers.

 

    • District Council Environmental Health departments have the necessary expertise and enforcement expertise to undertake or assist in unfitness and HMO enforcement action.

 

    • A new definition of HMO should be adopted.

 

    • Mandatory licensing of HMOs should be introduced.

 

    • Powers similar to those contained in Section 190 of the Housing Act 1985 for dealing with disrepair in otherwise fit houses should be made available to District Councils in Northern Ireland.

 

    • District Councils should be designated as the enforcing authority for the Rent Book Regulations under the Rent (NI) Order 1975.

 

  • District Councils should be responsible for enforcing the fitness standard in NIHE owned property.

HEATHER MOORE
Secretary
Chief Environmental Health Officers' Group

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Written Submission by:
Simon Community

26 April 2001

As discussed, thank you for providing the opportunity for Simon Community NI to put forward a couple of points in relation to topics 3 and 4 in the Social Development Committee's inquiry to housing issues in Northern Ireland.

Our points are as follows:

ITEM 3 Large Scale Voluntary Transfers and the NIHE:

23.2% of the housing market comprises social rented accommodation:- 20.8% managed by NIHE and 2.4% by Housing Associations.

Given the size of the population living in this sector, it is therefore vital that the best possible arrangements for the functions of allocation, housing management, landlord responsibilities and repairs/maintenance are in place. As part of the renew in this area we suggest that it is critical that the following questions are answered:

  • What added value would large scale voluntary transfers bring to the tenant?
  • What cost would be incurred in the process, and could this not be used in some other way to increase or improve the stock of socialised housing?
  • What evidence is available about the current processes/outcomes for tenants in social rented housing, ie who are the better landlords?
  • what impact do such transfers have on the remit and role of the Housing Executive and Housing Associations respectively?

ITEM 4 - The Rights of Housing Association Tenants to Buy Their Properties:

We are concerned that the right to buy will firstly reduce the overall stock of social rented housing in Northern Ireland and secondly reduce the stock of "better" social rented provision in desirable areas. The reduction in stock and specifically desirable stock will significantly reduce the options available to those on income levels who are unable to access owner occupation and the private rented sector. The Simon Community are concerned that given the level of homelessness and urgent housing need in Northern Ireland, evidenced from the Housing Executive's figures (10,997 and 11,734 households respectively) that the Assembly should be seeking to maintain and indeed increase housing options to all sectors of the community, and not to reduce these. In addition, given the already high level of owner occupation in Northern Ireland (67.8% of the total housing stock) the increase in house prices and connected increase in mortgage payments, we are concerned that increasing owner occupation will result in an increase in the level of mortgage default, a further reason for homelessness.

Finally on this point, we support the concerns put forward by the Council of Mortgage Lenders, that allowing housing association tenants the right to buy could prove a serious threat to smaller housing associations.

Conclusion

Given the interconnections between availability of and access to social housing and homelessness, we welcome this opportunity to put forward our concerns on these 2 issues to the DSD Committee. If you require any further information please do not hesitate to contact me.Many thanks.

FIONA BOYLE, Director - Research & Development

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Written Submission by:
Council OF Mortgage Lenders Northern Ireland

20 April 2001

Introduction

1. CML Northern Ireland is pleased to respond to the inquiry into housing issues in Northern Ireland initiated by the Social Development Committee. This response focuses on the issues of Large Scale Voluntary Transfers (LSVTs) and the Northern Ireland Housing Executive (NIHE) and on the proposed extension of the Right to Buy (RTB) to tenants of housing associations.

2. The Council of Mortgage Lenders is the representative trade body for the residential mortgage lending industry. Its 118 members currently hold over 98% of the assets of the UK mortgage market. CML Northern Ireland represents those lenders active in Northern Ireland.

3. The Committee of CML Northern Ireland has discussed the above issues over several months and this response therefore reflects the views of members in Northern Ireland.

Large Scale Voluntary Transfers

4. CML Northern Ireland supports the proposal by the Department for Social Development (DSD) that the right of one tenant to halt a stock transfer proposal in a ballot should be scrapped. It is clearly right that a decision to transfer or not to transfer a significant amount of the housing stock should be taken by a majority of those affected and not by a single individual. The Committee has indicated that it wishes to discuss the broad issue of LSVTs and the NIHE however, and this response will therefore go on to consider that issue.

5. LSVTs have been the major development in the organisation of social housing in the UK over the past twelve years. To date over 500,000 homes have been transferred in a total of 137 LSVTs. Some £21 billion or private finance has now been raised via direct borrowing by Registered Social Landlords (RSLs) or through transfer. One hundred and fifteen different lending institutions have been involved. To date almost all stock transfers have taken place in England, but in Scotland the Scottish Executive has been promoting stock transfer via the New Housing Partnership Programme and the expectation is that the first transfers will take place shortly. Wales currently lags behind England and Scotland; there have been no large-scale transfers and the National Assembly has yet to give a clear lead to Welsh local Authorities over the issue. The impetus for stock transfer has been fuelled by the need to make up for years of inadequate public investment in the social housing stock and by the unwillingness of Government to commit adequate public resources for the future.

6. LSVTs are rightly perceived to offer a number of advantages:

 

    • they enable private finance to be levered in to undertake much needed repairs and improvements, circumventing the Public Sector Borrowing Requirement (PSBR) and supplementing inadequate public investment;

 

    • transfers mean that public investment is protected within a not-for-profit, regulated sector;

 

    • tenant participation is maximised; typically receiving RSLs have one third tenant representation on their management boards; and

 

  • local accountability is maintained through management board representation for the local authority while the organisation is locally focussed.

7. LSVTs have been popular with tenants. A recent survey of tenants by DETR showed that tenants of LSVT RSLs are more satisfied with their landlord than local authority tenants and former local authority tenants who have transferred are more satisfied with their new landlord than with their former landlord.

The Northern Ireland Housing Executive

8. While there have not as yet, been any LSVTs in Northern Ireland, Housing Associations have around £126 million of private finance outstanding at the present time. Northern Ireland is different than elsewhere in the UK, since the NIHE rather than local authorities owns all non-housing association properties. The NIHE has had a good record as a housing provider. NIHE stock is newer than that in the private sector and the rate of unfitness is lower. NIHE stock is also in better condition than social housing in other parts of the UK due to relatively high levels of public expenditure maintained by successive Governments in Northern Ireland.

9. Therefore, there are fewer immediate reasons for introducing private finance in Northern Ireland as there are in the rest of the UK. Nevertheless, there are reasons to consider opening up access to private finance in the longer term. Supplementing public investment with private finance enables public investment to go further. While NIHE stock is in good condition further improvement remains desirable, there is significant disrepair in the private sector that the NIHE does not currently have the resources to eliminate. In addition the historically high levels of Northern Ireland public expenditure relative to the UK as a whole cannot be expected to continue indefinitely as political normality returns. There is a prudent case for considering the possibilities offered by private finance.

10. There are also good reasons why the model for social housing management offered by the NIHE should be examined -

 

    • the housing association sector in Northern Ireland is smaller than in England and Wales, and individual associations are themselves smaller than the UK average;

 

    • there is a case for subjecting the NIHE to a degree of competition and allowing individual tenants a greater degree of choice; and

 

  • the NIHE has seen its stock levels falling to less than 125,000 over recent years due to the effects of the Right to Buy (RTB) and to the transfer of new build to the housing association sector. There may come a time where economies of scale may begin to work in reverse and the future of the NIHE as a landlord will need to be considered.

Options for Private Finance

11. A number of options have been discussed in terms of their ability to bring in private finance. These include Arms Length Companies, Private Finance Initiative (PFI) and a changed status for the NIHE as well as the LSVT option.

12. Arms length companies, owned by local authorities, have been seen as an option in England. They provide for transfer of housing stock to a wholly owned company with some consequent relaxation in borrowing within the PSBR. There has been only limited progress towards this option in England, with local authorities struggling to meet the criteria set by the Government. It is also not clear that following this option would provide a solution to the near monopoly status of the NIHE, and in any case, there is no release from the PSBR and thus the option does not bring in increased private finance.

13. PFI for social housing is currently being piloted in England. While not wishing to rule out PFI, CML Northern Ireland would point out that it is still very much untried in housing and that it is considered to be expensive by some. In addition it does not fit into the established regulatory framework which applies to housing associations and which gives comfort to tenants.

14. There has been some discussion about changing the status of the NIHE itself to facilitate the introduction of private finance. One option could be for the NIHE to become a wholly owned public corporation, like the Post Office. This would offer more freedom to borrow within PSBR limits but would not enable those limits to be transcended. To escape PSBR limits the NIHE would need to become genuinely independent; perhaps constituted as a large RSL. While this would enable it to raise private finance it would also raise serious questions as to the public accountability of the NIHE, its ability to carry out its strategic functions and how it would sit with the existing housing associations in Northern Ireland who each manage on average less than 400 properties.

15. While the above options could be applied singly or in combination and cannot be dismissed without consideration, they are all relatively untried and potential problems have not yet been resolved. LSVTs by contrast, are well tried, have produced good results and can be initiated relatively straightforwardly.

LSVTs and Northern Ireland

16. LSVTs can make a valuable contribution to the provision of social housing in Northern Ireland -

 

    • they provide a proven means to lever in private finance outside of the PSBR;

 

    • transfer to a number of associations would assist in building the housing association sector in Northern Ireland and end the near monopoly of the NIHE;

 

    • successive transfers could be undertaken over time allowing lessons to be learnt;

 

    • the regulatory framework exists to offer security to tenants and comfort to lenders; and

 

  • transfer to housing associations offers an established way of increasing tenant participation.

17. For the above reasons and because of the absence of an obviously appropriate alternative CML Northern Ireland recommends that the Social Development Committee give serious consideration to LSVTs as a means of securing the longer term future of social housing in Northern Ireland.

Housing Association Tenants and the Right to Buy

18. CML Northern Ireland supports the right of NIHE tenants to buy their own homes. The application of this policy has contributed to Northern Ireland having the highest rate of home ownership in the UK at 71.9%. More than 40,000 tenants have been able to fulfil their aspirations to homeowner ship since 1989. Eighteen percent of owner occupied properties in Northern Ireland are former NIHE homes.

19. The extension of RTB to tenants of housing associations can present some difficulties however, particularly at the rates of discount currently offered by NIHE under its scheme. There is a balance to be struck between the rights of individuals to buy their homes and the need to safeguard public and private investment. CML Northern Ireland has had concerns about the proposal that -

 

    • receipts from sales could be insufficient to meet housing associations' debts; and

 

  • growing organisations could be transformed into shrinking bodies with poor morale and lack of forward vision.

20. The Department has indicated that in extending RTB to housing association tenants it would also extend the Voluntary Purchase Grant (VPG), which is currently paid on voluntary sales. This would have the effect of compensating housing associations for discounts paid out under RTB on the condition that this grant was reinvested. The extension of VPG has alleviated concerns about lender's security and about the ability of associations to meet their debts. Nevertheless the Committee should consider the longer-term implications of this policy. VPG will be expensive, particularly if the NIHE level discounts to be offered create high demand for properties. Should public finances come under pressure in the future, the Executive could be faced with the choice of cutting VPG or eroding funds for other programmes. Reducing VPG could cause the above concerns about the security and viability of housing associations to re-emerge and would cut across any plans for stock transfer since receiving landlords would be 100% debt funded and thus more vulnerable to the effects of RTB.

21. CML Northern Ireland therefore urges the Committee to carefully consider the long term as well as the short-term implications of extending the RTB to housing association tenants

 

This response has been prepared by Andrew Heywood. Comments or queries should be addressed to Andrew:

Telephone: 020 7440 2227
E-mail: andrew.heywood@cml.org.uk

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Written Submission by:
NORTHERN IRELAND HOUSING EXECUTIVE

20 April 2001

1. Thank you for inviting the NIHE to make a submission to the Social Development Committee enquiry within the terms of reference that you have set down.

"To investigate current proposals in Northern Ireland relating to the Rights of Housing Association Tenants to buy their own properties; to examine the benefits and disbenefits of such proposals and produce a report."

2. The document attached places the proposal in the context of present tenure patterns, the ability of housing association tenants to buy in England and Scotland, the scale of the housing association movement in Northern Ireland, and the impact of the NI Voluntary Sales Scheme on housing association stock.

3. In summary the NIHE believes that similar rights should exist between all tenants of the social rented sector including the Right to Buy (RTB) in whatever form it takes. The Committee should note that the Executive is currently reviewing its House Sales Policy and will be issuing its proposals for discussion in early summer.

4. Arguments against the principles of applying RTB to housing associations, who are now the providers of new social housing in Northern Ireland, are difficult to sustain. However, it is recognised that the Housing Association movement has reservations about RTB. Up until April 2000 only 14 out of 45 associations had sold to a total of 214 tenants; a small proportion of the 24,302 dwelling stock. However it must be recognised that because of the historic focus of the movement on supported/sheltered/elderly schemes there would be concerns about such property being available for sale. Under the current Housing Executive Sales Scheme they would be excluded from purchase.

5. In addition, housing associations will wish to see exceptions over and above those that apply to NIHE house sales. These include smaller associations where it is felt that house sales may threaten viability. 12 of the 45 associations have less than 100 units of accommodation. There is a view that the number of associations in Northern Ireland is too large in any event and that some consolidation would assist financial and housing management, and the achievement of performance standards. Consolidation could reduce the impact of exemption from RTB on the basis of size.

6. Similarly, it has been suggested that tenants more than 4 weeks in arrears should be excluded. This is contrary to the NIHE Sales Scheme, which obliges tenants in arrears to settle up before sale completion. It would be reasonable to apply the rules of the NIHE scheme (which has delivered over 90,000 sales to tenants) to housing associations RTB thus ensuring consistent treatment of tenants in the social rented sector.

7. Representations have been made that the RTB if applied to Housing Association Schemes would from a lender' perspective have a negative impact on the securing of private funding for existing or new schemes. There are several points to note in relation to this argument.

 

    • Most supported/sheltered schemes are 100% Housing Association Grant (HAG) funded with no private funding and would generally be excluded from RTB.

 

  • The new RTB would apply to housing provided for general needs purposes (which would previously have been provided by NIHE) and which is funded under mixed funding arrangements. We believe the financial arrangements to compensate an association for loss of its assets goes a long way to satisfying the concerns outlined in para 1.8 and 2.5 of the supporting report.

8. Finally, the Committee is asked to note that the NIHE is reviewing its house sales scheme. It is anticipated that proposals (which will deal with joint purchases, tenancy qualification, over 60s exclusion and maximum cash discount ceiling) will be available for consultation in the early summer. The scheme is currently subject to an Equality Impact Assessment under Section 75 of the Northern Ireland Act 1998.

P McINTYRE
Chief Executive

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Written Submission by:
THE NORTHERN IRELAND FEDERATION OF
HOUSING ASSOCIATIONS

20 April 2001

Introduction

I refer to your letter of 26th March 2001 requesting comments on the following housing issues in Northern Ireland:

 

    • Large Scale Voluntary Transfers and the Role of NIHE.

 

  • The right of housing association tenants to buy their properties.

The Federation is the representative body of all DSD-registered housing associations and of a number of unregistered associations in Northern Ireland. As the voice of the voluntary housing sector, we welcome the opportunity to outline our perspective on these important matters.

NIFHA would be glad to discuss our views with the Committee and send further written material to expand on the points made in this brief submission. In particular, the results of the major research we have commissioned on house sales policy in Northern Ireland will contribute valuable new insights into a complex and under-researched field of public policy.

Unfortunately, the proposed Housing Bill has not emerged from a recent, comprehensive analysis of housing problems and policies. We understand it is likely to contain miscellaneous proposals that have emerged over a long period and which may not relate well to each other. NIFHA therefore recommends Assembly Members and other interested parties to "step back" from each particular proposal and consider it in a wider strategic context.

We suggest that the starting point for this strategic evaluation should be section 2.3.2 of the Programme for Government which the Assembly approved in March:

"The aim of our housing policies and programmes is to promote economic and social well-being by providing everyone with the opportunity to access decent, affordable housing, in the tenure of their choice."

It goes on to state:

"Working with the Housing Executive, housing associations and others in the voluntary sector, we plan to improve the quality of accommodation generally. We intend to increase the numbers of properties that meet special needs such as the needs of those with disabilities, older people and others. We also plan to make improvements in services to the homeless; traveller accommodation; energy efficiency in the social housing sector; and the number of households experiencing fuel poverty."

To supplement the broad aim of housing policy, NIFHA suggests that decisions on the two issues which are the subject of the present submission should be guided by the following criteria:

(a) the best, long-term interest of existing tenants in social rented housing;

(b) the needs of present and future applicants for social rented housing;

(c) the need to make best use of the taxpayers' money entrusted to the Assembly; and

(d) the desirability of maintaining the stability and efficiency of the housing market.

Large Scale Voluntary Transfers and the Future Role of the NIHE

Although there is obviously a clear link between the two parts of this issue, for analytical purposes we shall sub-divide it and firstly consider the role of the Housing Executive.

The Role of the NIHE: Past and Future

When the Housing Executive was set up thirty years ago it was charged with the following main tasks:

 

    • absorbing the housing stock of scores of local authorities and unifying their management structures and policies;

 

    • promoting fairness in the allocation of housing;

 

    • improving the quality of Northern Ireland's housing stock, mainly by direct provision and grant aid to the private sector;

 

    • assessing aggregate housing need;

 

    • researching house condition; and

 

  • providing information and advice.

The Federation pays tribute to the generally excellent job which the Housing Executive has done in achieving these aims over the last thirty years.

In 2001, with much of this work completed and in a very different operating environment, the role of the Housing Executive deserves to be reassessed. Some of the major changes which ought to be taken into account are:

1. Devolution and the Programme for Government's commitment to review Non-Departmental Public Bodies and public administration generally (section 7.4).

2. The Programme for Government's determination to find new ways of financing our public services, notably by reviewing the opportunities for drawing in private finance (section 7.5).

3. Widespread acceptance of the principle that it is generally better to separate direct service provision from the planning and commissioning of services.

4. The demonstrated ability of registered housing associations to accept additional responsibilities including the development of almost all new social housing.

5. The need for "tailored" solutions to varied and intensely localised housing needs, rather than "broad-brush" responses to general shortages or substandard dwelling condition.

6. The growing residualisation and stigmatisation of social housing.

In these new circumstances, the Federation believes it would now be appropriate to transfer to the Department of Social Development the strategic functions which the NIHE currently carries out, leaving the reformed Housing Executive to concentrate on its roles of:

(a) landlord;

(b) enabler of housing development by others;

(c) provider of improvement grants to the private sector;

(d) energy conservation authority; and

(e) agent for the administration of vital public services including Housing Benefit and the proposed Supporting People Fund.

It seems logical that the Department for Social Development should be responsible for housing strategy since:

(i) it is directly accountable to locally elected representatives;

(ii) it would be easier to link housing policy to the Department's other responsibilities such as social security, urban regeneration, community development and voluntary activity;

(iii) it is woven into the new system of inter-Departmental working; and

(iv) it would be best placed to oversee all social housing providers, make impartial comparisons and promote sector-wide service improvements.

This type of reasoning seems to have led the Scottish Executive and the Welsh Assembly to take direct control of housing strategy.

Transfer of Housing Executive Stock

In the Federation's opinion, the Committee is right to consider the transfer of NIHE stock to socially-motivated bodies whose borrowing falls outside the definition of public expenditure because such a policy:

1. Would release very large sums of the Assembly's budget for reinvestment in other aspects of housing policy and/or other programmes contributing to economic and social well-being.

2. Could enable some NIHE tenants to get their homes upgraded earlier than would otherwise be the case, while not disadvantaging other tenants.

3. Could open up new or enhanced opportunities to support community development, tenant involvement and neighbourhood regeneration.

4. Would offer more choice for tenants.

Please note that we have been careful not to limit our thinking to large-scale voluntary transfers. NIFHA feels that, given the generally good condition of the Housing Executive's stock, the most sensible way of proceeding would be to initiate a pilot programme of small scale transfers selected on the basis of objective, pragmatic considerations such as:

 

    • the length of time tenants of an estate may have to wait for publicly-financed improvements; and

 

  • the proximity of the estate to other stock already owned by the proposed new landlord.

The "Rights" of Housing Association Tenants to Buy their Properties

The housing association movement recognises the aspiration of many social tenants to become owner-occupiers. Most registered associations also agree that it is reasonable for the public purse to provide some incentive to help tenants exercise tenure choice.

We hope that a scheme can be devised, suitable not only for the great variety of registered housing associations but also the Housing Executive, which would give all social tenants access to similar help to purchase.

But the housing association movement is far from being satisfied that the present NIHER House Sales Scheme strikes the correct balance between:

 

    • enabling present tenants to achieve their home ownership ambition; and

 

  • enabling present and future housing applicants to satisfy their need for a decent affordable home.

In contrast to the situation in Great Britain and the Republic of Ireland, there has been no significant debate about how a House Sales Scheme contributes to the aim of housing policy or whether the present NIHE Sales Scheme is designed in the most appropriate way.

To illuminate the key policy issues the Federation is undertaking a major piece of research which will examine the rationale for, and impact of, discounted house sales to sitting tenants of social landlords. It is being conducted in two parts:

1. Independent research on the aims of house sales policies (commissioned to the University of Glasgow, under the direction of Professor Robina Goodlad - report due October 2001).

2. In-house research by NIFHA to assess the impact of a range of house sales scenarios on the ability of housing associations to meet housing need and remain financially viable.

The Federation will use the results of this research, which we will of course make available to the Committee, to inform our definitive policy position on the house sales issue.

In he meantime we have produced the attached discussion paper which we hope will stimulate debate. It has been issued, for comment, to our members, the Department for Social Development, the Housing Executive and the Chartered Institute of Housing in Northern Ireland. We trust the Social Development Committee will find it useful.

Please do not hesitate to contact me if any points require clarification.

We welcome the Committee's inquiry into these major housing issues and would be glad to discuss them face to face.

CHRIS WILLIAMSON, Director

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Written Submission by:
ENVIRONMENT AND HERITAGE SERVICE

18 April 2001

With reference to your committee's call for comments upon the above, we would like to raise the following issues which you may wish to consider. These are based upon our experience in dealing with listed buildings.

1. Mandatory grant schemes have resulted in some instances in an overzealous renovation of historic buildings and we would encourage the committee to accept a discretionary approach to grant aid. In the present arrangements, many unnecessary renovations are to be carried out with the aim of addressing perceived problems. In particular, slate roofs and good quality timber windows are often replaced by inferior materials that have a much shorter life span. This is sometimes justified on the grounds of energy efficiency, modern construction standards or ensuring a thorough renovation. However, research has shown that this can be erroneous logic and in fact an expensive waste of resources.

Sash windows, in particular, have been shown in a recent study by English Heritage to work to adequate modern standards if properly repaired, and draught proofed. Slate roofs have lasted without felt for hundreds of years and their repair to modern standards is only really justifiable if they have failed. Slate as a material is much more durable than the man made alternative presently funded by the grant. EH have also proved conclusively that energy efficiency measures are much more cost effective if employed elsewhere in a dwelling than the windows. It takes on average 60 years to repay the cost of window replacement in energy savings according to their figures.

In relation to listed buildings many of our concerns are presently addressed by a cross check of all NIHE proposals by architects employed in this Department. We would argue however, that the unnecessary replacement of materials in all buildings in addition to being expensive and not cost effective (modern S/W timber windows have a life span of on average 25 years as opposed to historic timber taken from more mature forests which last hundreds of years) it also reduces the charm and character of much of our older buildings. These buildings form an important part of the tourist potential of our region and, though they are not listed owners should be given the opportunity to restore them sensitively. They should also be given the opportunity to restore them piece by piece as their funds allow, which is also more likely to maintain their character.

2. The idea of 'sub-standard conditions' should be carefully considered by the committee. At present low door heights, low ceiling heights, and kitchen work-surfaces of less than 3.6m are deemed to be sub-standard conditions eligible for grant. While we do not object to the principle of benchmark standards for grant eligibility we would point out that the Building Regulations no longer have minimum height requirements nor do they insist that existing dwellings be altered to comply with current standards. Quite considerable costs can result from the raising of doors and ceilings in particular. For example, the roof may also have to rise resulting in a massive increase in costs. Such conditions are often perfectly acceptable to the occupants of the houses. We would consider that this can often be an unnecessary cost and that the requirement should be reviewed.

3. The committee should also carefully consider the present Replacement Dwelling policy. When the cost of upgrading a dwelling to the required standard passes a threshold, the NIHE (sensibly on the grounds of cost effectiveness) will require a new dwelling to be built. However the corollary to this offer is that the original dwelling must be demolished. This is a 'statutory requirement' on the Executive from which they rarely deviate. The policy has resulted in a major loss of unlisted historic dwellings particularly in the countryside. Perhaps the greatest loss has been in the Government designated Areas of Outstanding Natural Beauty, which has obvious implications in terms of future tourism. These areas often coincide with the areas of greatest rural poverty and have been targeted by the NIHE to improve living conditions in recent years. While we do not object to the cost effective improvement of housing standards across Northern Ireland, we feel that the requirement for demolition should be left to Planning Service to decide. Our understanding of the justification for this policy is that it will avoid future improvement applications with regard to a dwelling deemed unfit; could this not be addressed in a legal or recorded manner without recourse to mandatory demolition?

In one recent example one of our architects visited a farm where the farmer, after great protest, had demolished his former farmhouse. The same farmer had created a lake nearby by diverting a river and had stocked it with fish. This person was a prime example of the rural diversification and initiative that the Government has said it would like to encourage. We are sure you will agree that this farmer's chances of success would have been much greater had his historic cottage remained to convert into fisherman's accommodation (without aid from NIHE). In a general sense, the policy implies the demolition of much loved family homes, perhaps continuously inhabited by the same family from Plantation times. Prosperous Victorian farms in our valleys often have the old homestead as a barn in the farmyard, why should today's improvers not be allowed to retain this link with their past?

In conclusion we understand that the committee's concern is primarily a social one and the concerns of architects at Protecting Historic Buildings are not paramount. However, in our opinion, the present grant situation could be adjusted to allow a more cost effective application of Government money and, therefore, tackle more social need. In the same way it could tie in with public concerns and policies of another branch of the Executive and become a good example of 'joined up government' in action.

JANIS LUNN RIBA
Senior Conservation Architect

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Written Submission by:
ARDS BOROUGH COUNCIL

18 April 2001

I refer to your letter dated 15 February 2001 regarding the Social Development Committee's enquiry into housing in Northern Ireland in light of the proposed Housing Bill which will be considered by the Assembly in the near future.

At the meeting of the Council's External Affairs and Planning Committee held in March, members considered the contents of your letter and agreed to note its contents.

I hope this information is of assistance.

A BORELAND
Director of Administration

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Written Submission by:
NORTHERN IRELAND CO-OWNERSHIP
HOUSING ASSOCIATION LIMITED

18 April 2001

Thank you for your letter of 26 March, inviting submissions to the Committee's inquiry into Large Scale Voluntary Transfers and the NIHE and also the Rights of Housing Association Tenants to Buy Their Properties. On behalf of this association, I would make the following comments:

NICHA appreciates the valuable role that tenant choice must play in social housing. If we accept the right to choose, it follows that we must explore ways to provide choice.

Large Scale Voluntary Transfers and the NIHE

The Northern Ireland housing environment has its own unique characteristics, and I would therefore be hesitant about commenting other than in general terms at this stage, before proposals have been developed. However, it is clearly important as a first step to assess the potential for LSVTs in terms of:

A. Stock.

B. New types of landlord.

C. Support from those likely to be affected (including the Housing Executive tenant base and those on the Common Waiting List).

Assuming it can be demonstrated that the potential exists, it is important that alternative options should not adversely impact:

1. Established performance standards for social housing management.

2. Mechanisms for control and accountability.

3. Policy and programme delivery.

4. The relative situations of individual tenants.

the rights of housing association tenants to buy their properties

The distinction between housing association and Housing Executive tenants is an important one. Housing Executive tenants may buy their homes, housing association tenants (largely) may not. The discounts available to sitting tenants through the Executive's sales scheme are both well known and attractive, accounting in no small measure for its continuing success. Taking this scheme into consideration together with the opportunity, open to all tenants, of choosing an alternative property and location through the Co-Ownership scheme, it could be argued that adequate home buyer initiatives are already in place.

Clearly extending the right to buy could have implications for the future supply of rented properties, particularly in urban areas.

Ultimately, it may be a matter of clarifying policy. If the underlying intention is to provide housing choice on an equal basis to all, which objective should take precedence: enabling the maximum number of households to buy affordable homes or enabling the maximum number of households to buy the homes in which they currently live.

K E BUTLER, Director

Written Submission by:
ENVIRONMENT AND HERITAGE SERVICE

18 April 2001

With reference to your committee's call for comments upon the above, we would like to raise the following issues which you may wish to consider. These are based upon our experience in dealing with listed buildings.

1. Mandatory grant schemes have resulted in some instances in an overzealous renovation of historic buildings and we would encourage the committee to accept a discretionary approach to grant aid. In the present arrangements, many unnecessary renovations are to be carried out with the aim of addressing perceived problems. In particular, slate roofs and good quality timber windows are often replaced by inferior materials that have a much shorter life span. This is sometimes justified on the grounds of energy efficiency, modern construction standards or ensuring a thorough renovation. However, research has shown that this can be erroneous logic and in fact an expensive waste of resources.

Sash windows, in particular, have been shown in a recent study by English Heritage to work to adequate modern standards if properly repaired, and draught proofed. Slate roofs have lasted without felt for hundreds of years and their repair to modern standards is only really justifiable if they have failed. Slate as a material is much more durable than the man made alternative presently funded by the grant. EH have also proved conclusively that energy efficiency measures are much more cost effective if employed elsewhere in a dwelling than the windows. It takes on average 60 years to repay the cost of window replacement in energy savings according to their figures.

In relation to listed buildings many of our concerns are presently addressed by a cross check of all NIHE proposals by architects employed in this Department. We would argue however, that the unnecessary replacement of materials in all buildings in addition to being expensive and not cost effective (modern S/W timber windows have a life span of on average 25 years as opposed to historic timber taken from more mature forests which last hundreds of years) it also reduces the charm and character of much of our older buildings. These buildings form an important part of the tourist potential of our region and, though they are not listed owners should be given the opportunity to restore them sensitively. They should also be given the opportunity to restore them piece by piece as their funds allow, which is also more likely to maintain their character.

2. The idea of 'sub-standard conditions' should be carefully considered by the committee. At present low door heights, low ceiling heights, and kitchen work-surfaces of less than 3.6m are deemed to be sub-standard conditions eligible for grant. While we do not object to the principle of benchmark standards for grant eligibility we would point out that the Building Regulations no longer have minimum height requirements nor do they insist that existing dwellings be altered to comply with current standards. Quite considerable costs can result from the raising of doors and ceilings in particular. For example, the roof may also have to rise resulting in a massive increase in costs. Such conditions are often perfectly acceptable to the occupants of the houses. We would consider that this can often be an unnecessary cost and that the requirement should be reviewed.

3. The committee should also carefully consider the present Replacement Dwelling policy. When the cost of upgrading a dwelling to the required standard passes a threshold, the NIHE (sensibly on the grounds of cost effectiveness) will require a new dwelling to be built. However the corollary to this offer is that the original dwelling must be demolished. This is a 'statutory requirement' on the Executive from which they rarely deviate. The policy has resulted in a major loss of unlisted historic dwellings particularly in the countryside. Perhaps the greatest loss has been in the Government designated Areas of Outstanding Natural Beauty, which has obvious implications in terms of future tourism. These areas often coincide with the areas of greatest rural poverty and have been targeted by the NIHE to improve living conditions in recent years. While we do not object to the cost effective improvement of housing standards across Northern Ireland, we feel that the requirement for demolition should be left to Planning Service to decide. Our understanding of the justification for this policy is that it will avoid future improvement applications with regard to a dwelling deemed unfit; could this not be addressed in a legal or recorded manner without recourse to mandatory demolition?

In one recent example one of our architects visited a farm where the farmer, after great protest, had demolished his former farmhouse. The same farmer had created a lake nearby by diverting a river and had stocked it with fish. This person was a prime example of the rural diversification and initiative that the Government has said it would like to encourage. We are sure you will agree that this farmer's chances of success would have been much greater had his historic cottage remained to convert into fisherman's accommodation (without aid from NIHE). In a general sense, the policy implies the demolition of much loved family homes, perhaps continuously inhabited by the same family from Plantation times. Prosperous Victorian farms in our valleys often have the old homestead as a barn in the farmyard, why should today's improvers not be allowed to retain this link with their past?

In conclusion we understand that the committee's concern is primarily a social one and the concerns of architects at Protecting Historic Buildings are not paramount. However, in our opinion, the present grant situation could be adjusted to allow a more cost effective application of Government money and, therefore, tackle more social need. In the same way it could tie in with public concerns and policies of another branch of the Executive and become a good example of 'joined up government' in action.

JANIS LUNN RIBA
Senior Conservation Architect

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Written Submission by:
NORTHERN IRELAND TENANTS ACTION PROJECT

9 April 2001

I refer to the above and to my previous correspondence dated 22 March 2001. Once again I am pleased to enclose the comments and observations from the NITAP staff team by way of formal response to the issues you raise. It is worth noting that the consideration of possible large scale voluntary transfer of Housing Executive stock has sparked lively discussion within the organization and we are pleased to be participating in the consultative process.

As a public sector landlord, the Northern Ireland Housing Executive enjoys high levels of customer satisfaction in the delivery of housing services and many community groups enjoy a constructive and participative relationship with housing staff. It is hoped that nothing in the proposals serves to undermine that relationship and the benefits that accrue to landlord and tenant as a result. It is therefore hoped that any consideration of the long-term future of the Housing Executive will include the views of tenants and their representatives.

Further, I note your comments on the consideration of anti-social behaviour and look forward to participating in the discussion on these matters.

I hope you find these comments useful and informative and a positive contribution to the consideration at hand.

MURRAY WATT
Liaison Officer

Large Scale Voluntary Transfers
Comments from Nitap Staff Team

In general it is felt that this is a consideration of the long-term future of the Housing Executive as a landlord; as such, it needs to be given the widest consultation to ensure that the views of tenants are taken into account. The matter of LSVT can be seen on the one hand as an opportunity to widen choice and better target responses to diverse housing need; on the other it can be seen as a threat to high quality housing services and tenant consultation which the Housing Executive has provided over the years. It is important that the debate is constructed to ensure the participation of the widest range of interests.

There is a great deal of uncertainty as to how LSVT will impact on housing in Northern Ireland and how it will be initiated and a number of issues will need to be addressed before the discussion can mature:

 

    • will LSVT involve the transfer of mainstream housing services to existing housing associations;

 

    • will arms length housing management companies be established to take on the delivery of the landlord function;

 

    • on what basis will transfer be initiated; at the estate level, District or Area ;

 

    • why is the issue being considered at the present time;

 

    • how will transfers be decided eg through balloting tenants and will simple majorities suffice to effect transfer;

 

  • in the rest of the UK, LSVT is seen as responding to the failures of public sector landlords and leveraging in private sector finance, is this the case in NI?

Benefits of LSVT

It is argued that one of the principal benefits of LSVT is that it enables public funding to be extended by accessing private sector sources. It is clear that many tenants would be attracted by the prospect of seeing maintenance or improvement schemes carried out in the shorter term which would be a positive outcome of the transfer process.

In Great Britain LSVT has been seen as responding to the failures of public sector landlords and that alternative providers have been able to respond more directly to the needs of tenants not just through increased financing but also through the introduction of new and innovative thinking. It is also suggested that the transfer process has enabled business discipline to enter into the public rented sector.

There may also be benefits in separating the regulatory function of social housing from the delivery mechanism which may suggest a different future role for the Housing Executive, more in line with the Housing Corporation or Scottish Homes.

One particular benefit of LSVT is that it might pave the way for greater tenant control of the housing service through the development of management or other co-operatives where neighbourhood services are effectively managed by the people who live there.

Community Participation Compacts currently being introduced might be the catalyst for instigating such change and LSVT the mechanism to develop the process further.

Disadvantage of LSVT

There are at present uncertainties as to the precise nature of LSVT as it may apply in Northern Ireland and indeed to whom stock would be transferred to should it apply. There is currently an absence of tradition in the province for examining housing policy, and time must be given to allow such a tradition to develop. Indeed the Housing Executive, the Housing Rights Service and the Chartered Institute of Housing are to be commended for their efforts to stimulate and encourage discussion and debate; this must be acknowledged as a stumbling block to a full and informed debate on the future direction of housing policy.

Nonetheless a number of disadvantages have been identified through discussions with NITAP staff and representatives of local community groups; these are as follows:

 

    • we do not know that alternative landlords have the capacity to deliver the landlord function as effectively as NIHE, some may be encouraged to take on tasks not suited to their organization;

 

    • there is a danger that in undertaking more mainstream housing services the experience of the smaller more specialist associations might be lost;

 

    • the need to adapt to ever changing roles, eg maintaining large investment portfolios and asset management may cause associations to move away from their voluntary ethos and not always to the benefit of their tenants;

 

    • many large estates have already seen a large change in tenure as a result of the Right to Buy, there is already confusion regarding services which may be complicated by further transfer of ownership;

 

    • NIHE has pioneered community involvement in NI and has made great strides in consulting tenants and residents on planned schemes and service delivery, there is a danger that this might be lost on transfer;

 

    • will the full rights of public sector tenancies be diluted on transfer from secure to assured, for example, and is this in the best interests of the customer;

 

    • there is a danger that the best stock is transferred leaving a residual public stock, marginalized and facing further under-investment;

 

    • as public life becomes more accessible, open and accountable, is there a danger that the transfer of stock will reverse this in the housing market;

 

    • will training and awareness raising on the issue be made available in all social housing areas, and if so who would provide such and how would it be resourced.

 

    • NIHE has provided considerable leadership in promoting community development and a vital role in sustaining processes in social housing areas whereas very few housing associations have any policies on consultation and participation;

 

    • through Consumer Panels and Community Participation Compacts NIHE has brought the customer closer to decisions on service delivery, there is a danger that other social landlords may not be able to sustain such participation;

 

    • what will happen in an area if a minority of tenants oppose transfer;

 

    • there may be an opening for some of the registered social landlords in GB taking over services or even ownership, which may not be in the best interests of tenants or NI based associations;

 

  • as a unitary authority, NIHE is able to deliver services uniformly across the province, LSVT may not achieve the same consistency.

An observation worth re-stating is the LSVT provides the potential for introducing new and innovative thinking into housing policy and would benefit from being regarded in that light rather than solely as a mechanism for introducing private finance into the public sector. It is therefore important that the structure in place whereby local community organizations participate in consumer panels with NIHE is utilized to develop the thinking on this issue. At the same time it is also important that housing professionals and the voluntary sector are involved in these discussions and that all groups can feel they have a stake in housing policy as it matures.

Community Participation Compacts, in line with GB, are being introduced across NI and there is no doubt that these carry the potential for developing alternative methods of delivering local housing services, but it is important that they are given time to develop and the opportunity to explore such ideas as LSVT. This will take time and it ought to be resourced. The absence of management and par-value co-ops in the housing sector and other such tenant run associations in NI is something which ought to be addressed and it is hoped that the proposed housing bill will open the door for such consideration; LSVT could be a mechanism to support such initiatives.

One further concern should be expressed. In considering this issue recognition should be given to the potentially damaging impact uncertainty over the future of the NIHE might have on the morale of its staff. There is no doubt that the housing service is being delivered in NI by experienced and skilled housing professionals and care must be exercised that this is not undermined by discussions on LSVT or other issue. Indeed it would be beneficial if housing staff are brought into these discussions not just through trades unions and professional bodies but also in the workplace; failure to do so might be very damaging.

rights of housing association tenants to buy their properties

There is no doubt that this issue presents a thorny issue for Housing Associations and it is important that policy neither limits the rights of tenants nor damages the long-term viability of the voluntary housing movement.

As housing associations have an increasing role in the provision of mainstream social housing, mainly as a result of the transfer of new development activity, the same rights should apply to association tenants as do to those of the Housing Executive; particularly as associations receive public funding.

At the same time it is acknowledged that this will present difficulties for associations under a mixed-funding regime. Concern will no doubt be expressed by associations that having spent time and resources developing, and long-term private finance obligations, they do not want to lose their best stock and face a declining asset base. An additional problem may face the smaller specialist associations who will have to either diversify their interests or face being swallowed up by stronger and better resourced associations. There is a danger that associations will have to move further away from their founding ethos just to sustain themselves and this does not bode well for the interests of their tenants.

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Written Submission by:
BALLYNAFEIGH HOUSING ASSOCIATION LTD

6 April 2001

Thank you for your letter of the 27th March, 2001 regarding various topics in relation to housing which will be brought before the Assembly.

I shall indeed be putting this Association's views on the relevant subjects to Mr Chris Williamson, Director of the Northern Ireland Federation of Housing Associations and trust that none of the concerns we may express will become diluted in a general reply.

Should you require any further information kindly do not hesitate to contact me.

P O'NEILL
Development Officer

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Written Submission by:
HEARTH HOUSING ASSOCIATION

6 April 2001

Thank you for your letter of 27 March concerning the next stage of the Social Development Committee's inquiry into housing issues.

I understand that you have asked the NI Federation of Housing Associations to make a composite response to items 3 and 4 of your agenda, and we have written to them with our views.

Although we have many common interests, you will be aware that housing associations are not a monolithic body, and they embrace a number of special interests. In our case, we provide social housing through the restoration of historic buildings, and we have a number of special concerns which NIFHA may not feel are ones they can put forward on behalf of the movement as a whole. I would be grateful therefore if you would permit me to make these to you directly.

1. We would be keen to see an equity sharing scheme in operation. This would not necessarily be the same as that run by the Co-Ownership HA, whose tenants are expected to move on to full ownership in due course, and we would like to see a limit to the extent of equity a tenant could acquire. This would allow associations to retain an interest in the property, while at the same time permitting the tenant to take a proprietorial interest in it and to gain from any capital appreciation it experiences. We believe that this has the advantage of retaining rental accommodation where it is needed - in that the tenant with means would have in due course to buy elsewhere - while at the same time providing tenants with the foothold on owner occupation which is the aim of the legislation.

2. Unlike the Housing Executive, associations use private finance towards their work. In our case we have also used Heritage Lottery Funds and other private charitable resources in order to achieve good standards of historic restoration, and we believe that it will be hard to obtain such funds in future if there is seen to be an element of potential private gain by former tenants.

3. As a specialist association, we certainly cannot always replace stock in a given area. Many of our properties are unique, and we have invested considerable effort and resources into bringing them back from dereliction into use. Often other properties in the area which would have been of interest to us have been demolished.

4. Because of our own charitable status and also to fulfil the requirements of bodies like the Heritage Lottery Fund, we need to demonstrate that the properties will retain their historic interest, and this cannot be guaranteed if we no longer own them. We have concerns about the control of design features, particularly in terraced houses where owner occupiers may wish to change doors or windows and break up the architectural integrity of the terrace to the disadvantage of neighbours. It is possible to control such matters to some extent through covenants, but the leasehold reform act has made this more difficult. Formerly we might also have relied on the listing system protecting such properties, but as your Committee may be aware lack of planning enforcement has been a major issue in recent years, and many buildings are being de-listed as a result of unsuitable alterations.

I hope that you can include these points in your discussion paper.

>

MARCUS PATTON

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Written Submission by:
BALLYMONEY BOROUGH COUNCIL

6 April 2001

Council recently considered your letter of 15th February regarding the inquiry into Housing in Northern Ireland.

The Council has noted the Consultation Document by the Housing Executive to licence houses in multiple occupancy and welcomes progress in the provision of a voluntary scheme. However, it takes the view that a compulsory scheme should be introduced.

Members also expressed a view that as the houses in the multiple occupancy sector was increasing the properties ought to be better regulated than currently. It believes that the change of use to houses in multiple occupation should be included as a category in Planning Legislation so that Planning Permission and Building Regulation Approval would be required and aspects such as Fire & Safety matters could be controlled.

It is hoped that these matters can be taken into account as part of the inquiry process.

 

LIZ JOHNSTON
Corporate Services Officer

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Written Submission by:
QUEEN'S UNIVERSITY BELFAST

3 April 2001

I refer to your letter dated 27 March 2001, addressed to Mr B Hannon at Malone Housing Association, Leslie Morrell House.

The property portfolio of the Malone Housing Association was purchased by Queen's University in April 2000. In light of this change in ownership and status, the University has no comments in relation to any of the items outlined in your letter and does not intend to forward a response to the Northern Ireland Federation of Housing Associations. I would be grateful if you would pass on this information.

Many thanks.

LORRAINE McCALLUM

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Written Submission by:
COUNCIL OF MORTGAGE LENDERS NORTHERN IRELAND

3 April 2001

Introduction

1. CML Northern Ireland welcomes the opportunity to respond to the inquiry issued by the Social Development Committee into Housing in Northern Ireland in light of the proposed Housing Bill.

2. The Council of Mortgage Lenders is the representative trade body for the residential mortgage lending industry. Its 118 members currently hold over 98% of the assets of the UK mortgage market. CML Northern Ireland represents those lenders active within Northern Ireland.

Licensing the Houses in Multiple Occupations (HMO) and Private Rented Sector (PRS)

3. The Northern Ireland Assembly should carefully evaluate the benefits and costs of introducing regulation to either the HMO end of the private rented sector (PRS) and the PRS more widely. The PRS has undergone a renaissance in the 1990s in Northern Ireland having grown from 3.5% to 4.4% of all dwellings between 1994 and 1999. However, it is still a relatively small sector by UK standards with the proportion of households renting privately in Northern Ireland less than half the proportion in Great Britain.

4. Clearly, there is a need to raise standards and protect tenants from unscrupulous landlords and poor quality housing in some parts of the PRS. But the Assembly needs to ensure that landlords and investors are not discouraged out of the sector by disproportionate regulation.

5. Any scheme should be unambiguous, consistent across the UK, and not duplicate or conflict with other regulatory regimes. Many investors in the PRS have portfolios across the whole of the UK and will expect similar regulatory standards to apply across Great Britain and Northern Ireland. Similarly, Government should ensure the burdens on business is kept to a minimum.

6. Licensing HMOs could impact on the amount of affordable housing in the private sector, particularly for young people. Firstly, the costs of compliance with the scheme may impact on landlord overheads, resulting in increased rents. Secondly regulation could have an impact on the availability of property. A DETR study in England in 1999 on the impact of restrictions on rent eligible for housing benefit for single people under 25, revealed landlords were more likely to withdraw from the market than reduce their rents. HMO landlords may similarly choose to withdraw from the market if they consider the costs of compliance entailed by licensing, will reduce their rental return.

7. Despite Government initiatives to encourage investment in the private sector, lenders and institutions have remained cautious about committing to a long-term investment in the sector. Historically investors have been nervous about the threat of regulation. A licensing scheme for HMOs with the threat of extension to the wider PRS may send mixed messages to investors about Government's attitude towards the PRS. The PRS has experienced a renaissance in the UK as landlords and lenders have seen that renting privately is an attractive alternative to both owner occupation and social housing.

8. The Northern Ireland Executive should be extremely cautious about discussing licensing the whole of the PRS. There is always a concern amongst investors and landlords that discussion could lead to action without a proper evaluation of the consequences. Any review of the regulatory requirements will have to take into account the impact of onerous regulation on lenders' and landlords' future willingness to invest in the sector.

Private Sector Renewal

9. The CML believes the home improvement grant system is in need of substantial reform across the whole of the UK and would welcome a review of the Executive's grant giving powers. The Northern Ireland Assembly should look at the capacity for levering in private finance to make the existing mandatory grant funding go further than it currently does in meeting home owners' repair and improvement needs. There is a similar review currently under way in England and Wales.

10. As well as grants, NIHE should have the ability to make interest-bearing loans and also award grants, which are repayable. The current system is inflexible, especially given the varied financial circumstances of owners of poor condition housing Any new system should provide a range of assistance based on homeowners' needs and their ability to pay for repairs.

11. At one end of the spectrum lower income households with very limited equity need grant assistance. At the other end, homeowners on higher incomes and with equity in their homes, should be encouraged to unlock and use that capital to repay for repairs and improvements.

12. Homeowners with sufficient equity in their home need to be encouraged to use that equity to repair their property. The CML is working towards guidance on equity release products with a view to assisting homeowners who would like to unlock equity in their home to pay for improvements.

13. The UK Government's approach to Regulating Mortgages (HM Treasury, 2000) means that all loans over 5 years in length secured on land will be regulated by the Financial Services Authority (FSA) and no longer caught by the Consumer Credit Act. This makes it easier for lenders to make small sum advances for home repair, and would allow middle-income borrowers to pay for their own home improvements, rather than relying on mandatory grants.

14. The Assembly could also explore the option of providing guarantees for loans for home repair. The presence of a guarantee brings comfort to lenders and could lower the marginal costs to borrower and lender alike.

15. The CML believe that grants should be given where no other option is available or practicable. The Housing Executive is best placed to judge what form of help to give in each case. The grant could be made recyclable by insisting that the grant is repaid on the sale of the property, which would increase the sums of money available to the Housing Executive over the long term. We believe that the grant should always be ranked behind any mortgage in order of priority.

Comments or queries about this paper should be addressed in the first instance to Andrew Heywood, telephone: 020 7440 2227, e-mail: andrew.heywood@cml.org.uk.

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Written Submission by:
FERMANAGH DISTRICT COUNCIL

3 April 2001

I refer to your letters of 15th February and 27th March 2001 regarding the Social Development Committee's deliberations into a member of Housing Issues in Northern Ireland and would confirm that Fermanagh District Council discussed these matters at their Environmental Health Committee meeting on 8th March 2001 and Council meeting on 2nd April 2001. The following is a brief synopsis of their discussions/recommendations:

Private Sector Renewal

Fermanagh District Council commends the present mandatory grants scheme and are of the opinion that it is the best policy for improving/replacing the large number of unfit dwellings. It is anticipated that the 17.5% unfitness level recorded for the Fermanagh District Council area in the last House Condition Survey of 1996 will show substantial improvement in 2001 but it is acknowledged that many more houses will require improvement/replacement before Fermanagh's housing unfitness rate falls to an acceptable level.

The present Minor Works Grant should in the Council's opinion, be extended to include people of all ages who are in receipt of means tested benefits and not limited to those aged over 60 years. This would also mean that there would be no necessity to continue with payment of grant to owner occupiers on the basis of Public Health Nuisance Notices. The payment of grant to landlords on the strength of a Public Health Notice/Certificate of Disrepair is, however, seen as a useful tool in having necessary repairs carried out to properties which are often occupied by the elderly and more vulnerable members of society.

Fermanagh District Council has a number of occasions raised the matter of grant eligibility in respect of replacement grant applicants form houses subject of Closing Order procedure (ie Closing Orders made by the Northern Ireland Housing Executive where grant applicants were not living in the property for 2 years). It is considered that this policy adopted by the Northern Ireland Housing Executive is wrong and many genuine applicants are being refused grant aid as structurally better houses which are also subject of Closing Orders and where the grant applicant is living in the property for less than 2 years are eligible for Renovation Grant. This anomaly needs to be addressed.

Any Group Repair Scheme being proposed in new legislation should be adaptable to town/village locations. In the past area action was often seen by the Northern Ireland Housing Executive as being applicable only to large urban residential areas.

Houses in Multiple Occupation

As the proposed licensing scheme recently announced by the Northern Ireland Housing Executive is voluntary, it is considered that responsible landlords will be more likely to participate in the scheme. It is Fermanagh District Council's opinion that a mandatory scheme is the only way that the problems occurring in the worst and most dangerous properties can be addressed.

Private Rented Sector

It is understood that the Minister has recently convened a Working Group to review this legislation and the Council looks forward to having an opportunity to input into any subsequent consultation. It is recognised that the existing Rent (Northern Ireland) Order 1978 requires amendment but it is a useful piece of legislation. Amendments should include designation of District Councils as the enforcement authority for Rent Book Regulations.

Fermanagh District Council would thank the Social Development Committee for this opportunity to comment on the above matters at this formative stage of the legislative process.

R C FORDE
Director of Environmental Health

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Written Submission by:
CHARTERED INSTITUTE OF HOUSING IN NORTHERN IRELAND

April 2001

The Chartered Institute of Housing in Northern Ireland welcomes the opportunity to make this written submission as part of the second stage of the Social Development Committee's inquiry into Housing in Northern Ireland, in light of the proposed Housing Bill.

We note the intention to produce a single report on the first four topics identified as part of the review, to be released before the summer recess and trust that our comments, views and opinions will be of assistance.

Large Scale Voluntary Transfer and the NIHE

"To investigate current proposals in Northern Ireland for Large Scale Voluntary Transfers; to identify the benefits and disbenefits of such proposals and to examine the effects on, and future for, the Northern Ireland Housing Executive and produce a report."

The Minister for Social Development has stated his intention to bring forward legislation on a range of housing matters, including Stock Transfer. However, the proposal as currently penned is devoid of explanation and appears simply to remove the power of veto that a single tenant can have, should stock transfer be proposed. In effect the legislation to facilitate stock transfer already exists in Northern Ireland, but, under current legislation, should one tenant in a scheme proposed for transfer object, then the transfer could not proceed. The proposal from the Minister is, therefore, to remove this veto and introduce a simple majority of tenants voting to agree a transfer proposal.

While the legislation exists but has rarely if ever been used, the question is why change the rules if you are not contemplating making use of these new powers? The Department for Social Development explains that this is simply a passive measure to bring Northern Ireland into line with the rest of the UK. However, such a change should not be taken in isolation from the debate on future options for the delivery of housing services both on grounds of investment and management. We are pleased that the Social Development Committee has been prepared to stimulate this debate through the current inquiry that has been initiated, and we welcome the opportunity to contribute.

Despite Northern Ireland's good track record in maintaining investment levels in housing, NIHE now has a growing backlog of repair and improvement work, with investment running at only two-thirds of what is required. In England, Government has set a target of tackling poor conditions in social housing within ten years. In Northern Ireland, the problem is not as big (even in relative terms) but given present investment levels the picture will get worse, not better, over the next decade. At present there is no equivalent target to the one set for England.

At the same time there is an issue about the appropriateness of NIHE as a structure for the future, given the institutional changes that have begun as a result of devolution. NIHE has a stock of 120,000. Until now, it has been able to compare itself as a housing authority with the likes of Birmingham (88,000 stock) or Glasgow (95,000 stock) but this will soon change as both these large local authorities head down the transfer route and break up the ownership of their stocks. Is it now time for the Housing Executive, too, to be re-invented in a new form?

Our comments here are a very preliminary look at some of the options for NIHE. This is against the background of what is happening elsewhere and the Programme for Government proposal to finance a programme for improvement linked to the disposal of remaining public housing stock to social ownership, managed by housing associations or self-managed community development trusts. (Programme for Government section (f): Enhancing physical mobility and the environmental fabric.)

Option 1
Do Nothing

In Northern Ireland there is general consensus among tenants and all shades of political opinion that the Housing Executive has been a successful framework for delivering housing services. So, if it is not broken why try to fix it!

However, maintaining the status quo does not appear a realistic option in the current climate, as funding to meet increasing needs is unlikely to be forthcoming. We have already seen the transfer of the new build function to Housing Associations, not because they had asked for this or, indeed, that it was felt that this could be delivered more efficiently by associations, but solely to allow the levering in of private resources. One consequence of this has been the break down of the current consistent pattern of rents, as associations have to set rents to service loans rather than on size, age, and amenity.

It is also clear that with the evolving political structures for governing Northern Ireland a new framework will be required within which the Assembly can set its own strategies and priorities. This will require the harnessing of resources and expertise and a mix of public and private investment, setting the implementation of future strategies within the context of nationally identified needs and priorities. This will require an evaluation of alternative models of delivery to develop a specific housing strategy, reflecting the political, social and economic situation in Northern Ireland.

Consideration of the additional options outlined below does in no way imply criticism of the NIHE or advocacy of change. Our comments are provided in consideration of what some of the options might be to improve service delivery, given developments elsewhere in the UK.

Option 2
Public Corporation with more Borrowing Freedom

This option would retain NIHE as a unit (although it would be linked to other options to devolve management). NIHE would become a wholly owned public corporation like the Post Office. It would then be given more borrowing freedom within public sector borrowing controls based on it maintaining a prudent borrowing regime. Its relationship with the Government might be based on a renewable contract, with subsidy related to delivery of services and targets set out in the contract. The Executive could finance more investment if it was able to increase rents, but would have to do so within an agreed business plan with limits on the rate of rent increases.

There may be ways of giving a reformed Executive more flexibility to meet its investment needs in other respects, for example:

 

    • capitalise the benefit of future rental streams to make new investment now (possibly through securitisation);

 

    • build up surpluses for the same purpose;

 

    • have more freedom to dispose of assets and re-use the proceeds;

 

  • transfer the NIHE debt to central government as is happening in England with stock transfer.

This option is the lease challenging to the NIHE current structure, but could be made a challenging option in terms of its business plan through the contract/subsidy relationship with Government.

Option 3
A Big Housing Association

This option has already been mooted by members of the Social Development Committee and would be akin to a whole stock transfer, with NIHE being reconstituted as a large housing association, able to receive grants, raise private finance, etc in the normal way. This option is relatively simple in principle, but raises a number of major questions and issues:

 

    • in relation to the other associations, it would be a massive fish in a tiny pond

 

    • How would it be accountable?

 

    • Would it carry on with it the strategic functions or would these be left with (say) DSD?

 

    • Would it be able to do new build?

 

  • How would it be regulated?

A variation of this option would be a group structure, with a big parent body and smaller local ones based on existing NIHE district offices. This would help solve the accountability issue, but some of the other questions would remain. Would local associations derived from the existing NIHE districts offices feel genuinely independent or would the structure remain monolithic in practice, if not in appearance?

Option 4
Several Housing Associations

Under this option the stock would be broken up between new housing associations set up at district level. They would be independent of each other and of any central body. This option, therefore, implies a strong strategic unit within DSD (or separately) to deal with overall strategy and private sector issues that are now handled or proposed to be handled by the Housing Executive. This option could be phased in, with transfer taking place over a period and the Executive, as currently exists, being gradually wound down.

The option addresses some of the issues raised under option 3 but might be just as threatening to existing housing associations as that option, as there would be a large number of new bodies competing for grant etc. Also, given the strength of the Housing Executives strategic role, it would be important to have a new arrangement to place that retained it and did not have all the key staff going to local level as new housing association Chief Executives (a problem occurring in England with stock transfer).

Option 5
Arms Length Companies

In this option the Housing Executive is retained centrally but is allowed/encouraged to set up arms length companies based on its districts. There would have to be performance thresholds before arms-length could be established and each would require a business plan (maybe operating in shadow from pre-ALC). The Housing Executive's existing business planning process should be robust enough to facilitate this option.

Consideration would need to be given to the financial arrangements that might accompany these changes. One possibility would be to introduce resource accounting for the ALCs, with the stock re-investment indicated in their business plans financed through a new Major Repairs Allowance, as in England. This would be public subsidy so would not in itself solve the problem of where new funds would come from. The ALC could borrow within prudential guidelines and could undertake PFI deals (though there may not be any clear advantage in the latter).

This option has the attraction of retaining a relatively strong central base for the Executive and being less threatening to existing associations, as they would (at least initially) still be the main agents for new build. The ALCs could have local boards and be the basis for greater local devolution at a later stage. The big disadvantage is that it does not bring in private finance.

Option 6
A Mixed Strategy

One way of addressing the weakness of the last option is to pursue a mixed strategy in which districts which could be viable within a resource accounting regime (because they have better quality stock) become ALCs, whilst those with poorer stock are transferred to benefit from private finance. In many ways this would give the best of both worlds and would create more diversity.

Option 7
A Mixed Strategy - With Competition

Another variation on the previous option would be to allow existing housing associations to compete to take over the stock as an alternative to a new association being formed from the existing district offices. This would be a more open approach but may be of questionable feasibility given the size of the majority of existing associations. However, it would have the advantage that in poor performing districts there would be an alternative to the present management set up (although staff would in any case have to move across through TUPE rules).

There, of course, may be more options than those mentioned, but this provides a basis to discuss the advantages and disadvantages of different approaches as requested in your terms of reference. However, fundamental to developing structures for the future is undoubtedly the issue of over-hanging debt.

Treatment of NIHE Debt

Any of the above options could be combined with the taking over of the NIHE debt to be serviced by central government. The advantage of this would be to simplify its financial preparatory to one of the above changes, by brining current expenditure more or less in line with revenue from rents and capital receipts. The precedent is the write-off of debt which takes place in England with LSVT, where the Treasury bears the costs and effectively takes the debt onto its own books. Such a move is neutral in terms of Public Sector Borrowing Rules. (PSBR)

The complication in the case of Northern Ireland is the same that has occurred in Scotland, that the Treasury may regard debt repayment as a call on the Northern Ireland block, so that (unlike England) it could affect current spending. This would need investigation and may depend on the status of the NIHE debt ad the historic level of debt from the Public Works Loan Board (PWLB) inherited from the 65 different housing bodies that were amalgamated in 1971 to form the Northern Ireland Housing Executive. However, a clear difference between Scotland and Northern Ireland is the NIHE receives substantial subsidy towards debt servicing costs direct from Central Government. (In Scotland's case, direct subsidy has already disappeared for most authorities and debt is serviced from rent income.) This distinction is undoubtedly an advantage in the argument for the Treasury to bear the costs of this overhanging debt.

In the halcyon days of the 1980's, when housing was declared to be the government's main social priority in Northern Ireland, it should be noted that some £366m of NIHE debt had been written off, together with an accompanying reduction in loan charge requirements. Without this write off a higher level of public expenditure would have been required from the Northern Ireland Block, without any benefit to the physical housing programme. Similar action now would facilitate the development of an appropriate model of service delivery with the investment required to maintain and improve the social sector.

More Modest Reform Possibilities

One further consideration of structures for delivering housing services could also involve the re-aligning of existing Housing Executive district office boundaries to become co-terminus with electoral boundaries, rather than district council boundaries. As the devolved structure of the Northern Ireland Assembly is on the basis of six representatives from each constituency, it is worth considering a move to eighteen District Offices, determined by population and stock size, rather than strict adherence to council boundaries, which have no relevance to delivery mechanisms. The current district structure of the NIHE is primarily the same as created at the establishment of the Housing Executive in 197` when there were 43 District Offices. A number of Districts have since amalgamated, within District Council areas, creating the current 37 District offices. However, at that time the stock levels numbered 212,000 properties compared to 120,000 currently, as a result, primarily, of slum clearance and house sales. Existing constraints have prevented the Housing Executive from doing little more than "tinker" with this structure, whereas a more fundamental review could achieve greater efficiencies.

Indeed, one could go further and create, for example, one office for Belfast, with an increased network of smaller neighbourhood offices, bringing delivery to the doorstep of local residents. Economies of scale can be achieved with this move from the seven existing offices, nearly all with city centre locations and simplify the administration of tasks duplicated in each individual outlet.

Such change could take place within current structures or as part of the introduction of the preferred option for the future delivery of housing services.

Finally, as the Social Development Committee is no doubt aware, the Department for Social Development and the Housing Executive have jointly commissioned research, to be undertaken by HACAS Chapman Hendy, into the future options for investment and management of social housing in Northern Ireland. As the terms of reference of that research project appears to overlap with this current review and to avoid duplication, it would seem appropriate for this research document to be incorporated into your report, as part of the ongoing review. CIH calls on the DSD and NIHE to publish the consultant's report, to stimulate the wider debate, which we have called for in this submission.

The Rights of Housing Association Tenants to Buy Their Properties

"To investigate current proposals in Northern Ireland relating to the Rights of Housing Association Tenants to buy their own properties; to examine the benefits and disbenefits of such proposals and produce a Report."

It is clear that the primary driver to extend the Right To Buy (RTB) to Housing Association Tenants is on the basis of "equity". It is argued that it is only fair that all social housing tenants in Northern Ireland should be treated in the same way and that Housing Association tenants should have the same rights as Housing Executive tenants. Those advocating this change point to the dilution of rights which those tenants, rehoused in new properties built by Housing Associations under current arrangements for accessing private funding, had previously enjoyed as Housing Executive tenants. However, such a blanket extension of the right to buy without proper analysis or debate on the short term and long term implications, is short-sighted and fails to take into account the likely impact on future housing provision and strategies.

The growth in owner-occupation in Northern Ireland is due in no small measure to the Housing Executive's House Sales scheme with over 90,000 sales completed to date. It is, though, predominately the better properties in the better locations which have been sold.

Former tenants have benefited, but in some areas, including many rural locations, there is too little affordable housing to meet local needs. There is clearly a need to review the current house sales arrangements across the sector to develop a scheme, which is more flexible so that it can take into account the needs of local communities. We can also learn from developments elsewhere in the UK, particularly in Scotland where the Scottish Parliament are to introduce their own house sales policy taking account of demand and capping discounts.

It is also important to understand how and why the RTB has developed in Northern Ireland compared to the rest of the UK. In Northern Ireland, for example, the Housing Executive sells properties to sitting tenants not under the provisions of the RTB legislation, but under the more generous provisions of its own voluntary sales scheme which was introduced in 1979. Under the latter, for example, a NIHE tenant is eligible to buy from the first day that he/she becomes a tenant. Under the RTB one would have had to be a tenant for a minimum of two years.

History of the Right to Buy

The original RTB was introduced in England and Wales in the Housing Act 1980, and the Scottish Tenants Rights Act 1980. It gave secure tenants of councils and non-charitable housing associations the right to purchase the freehold or leasehold of the property they occupied at a discount, dependent on certain conditions. In Northern Ireland the RTB was introduced in the Tenants Charter in 1984 and was modelled on an existing NIHE voluntary sales scheme, later enshrined in legislation in 1992. In fact all NIHE sales are under the voluntary scheme rather than the statutory RTB as it is less administratively onerous. Since 1979 over 90,000 properties have been sold, and sales continue to average over 4,000 per year.

Since 1989 in the rest of the UK, new tenants of both charitable and non-charitable housing associations have been granted assured tenancies under the 1988 Housing Act. This means that whilst existing secure tenants of non-charitable associations have maintained the RTB, new assured tenancies do not have this right. The Housing and Planning Act 1986 brought in the preserved RTB for tenants whose council properties are transferred to housing associations.

In Northern Ireland, we have a single secure tenancy for housing association and Housing Executive properties, but the RTB is not linked to the type of tenancy but the type of landlord.

The Right to Acquire (RTA) was introduced in England and Wales in the 1996 Housing Act for tenants of housing associations built after 1 April 1997 with the aid of public money. The RTA is significantly different from the RTB. In particular, housing associations can re-invest the receipts from sale and properties in rural settlements with population of less than 3,000 are exempt. The RTA does not apply in Scotland or Northern Ireland.

Recent Changes in RTB

Modest changes to the RTB in England were introduced in December 1998, with the maximum discount allowed varying according to Region. It has been reduced from £50,000 in all regions and now ranges from £22,000 in the North East to £38,000 in London and the South East. In Wales the maximum discount is £24,000 across the country and came into force in 1999. However, Scotland, like Northern Ireland, has no fixed level discount: the maximum discount remains at 60% for houses and 70% for flats. One recent valuation in Northern Ireland, at over £100,000, allowed the sitting tenant a discount of over £60,000. Current proposals in Scotland will "cap" the discount at £20,000.

The RTB also has a "Cost Floor Rule" which has been modernised and harmonised in the rest of the UK and applies to works carried out on a property up to 10 years earlier (the previous period was eight years). The rule has been extended to include repairs and maintenance over the cost of £5,500 incurred in that period. There has been no equivalent change in Northern Ireland as the Cost Floor Rule continues to apply only to capital works carried out up to £5,000 over a period of 8 years.

There has also been a change to the Right to Acquire in England, which came into effect in December 1999. This amendment limits the discount available to 50% of the value of the property where that value is lower than the flat rate discount for the area. The discount available depends on the area and is currently between £9,000 and £16,000.

Reforming the Right to Buy - Scottish Executive Proposals

Following a lengthy consultation process, a number of important reforms to the RTB have recently been proposed by the Scottish Executive. The changes will affect new tenants rather than current tenants, with the latter retaining the right to buy under current terms and conditions. New tenants will have the right to buy under the reformed system and will apply equally to both council and housing association tenancies. The proposals include reforms in the following areas:

 

    • New tenants will become eligible for RTB after five years, rather than the two years for current tenants.

 

    • Discounts will start at 20% after five years, increasing by 2% per annum until they reach a level of 50% after 15 years. Discounts will apply equally to flats and houses and will be capped at a maximum value of £20,000.

 

    • RTB to be suspended for new and re-let properties (ie not current tenancies) in areas which are designated high pressure areas for rented housing. Councils would be able to apply for such a designation under the housing plan process and they would last for a specified period with the possibility of extension if pressures had not been eased.

 

    • Landlords would be able to offer tenants financial incentives (the "portable discount") towards the purchase of a property on the open market.

 

    • The current exemptions to the RTB would continue to apply for charitable housing associations and would be extended from sheltered housing to include all group housing provided for people with special needs.

 

    • Individual housing associations can choose to bring particular properties within the scope of the new scheme if they wish but if there is a concern about financial viability they can remain exempt for up to ten years.

 

  • The "cost floor rules" will remain unchanged at 10 years, following the amendment in 1998.

The principles behind the Scottish reforms are to make the discount scheme less onerous on selling landlords and making the RTB more responsive to local housing markets.

House Sales in Northern Ireland

The House Sales scheme in Northern Ireland has been seen as a resounding success, providing an opportunity for many tenants to move into home ownership for the first time. Indeed, the capital receipts from the sale to sitting tenants has been a vital source of income for the Housing Executive and had been ploughed back to fund mainstream development programmes. However, it was felt that the number of tenants applying to buy would eventually tail off, but this has not proved to be the case and, consequently, the Housing Executive is no longer permitted to keep all the money it makes from selling to tenants of its properties. In fact, in the last five years the Housing Executive has had to hand back over £60 million for distribution within the Northern Ireland Public Expenditure Block. Thus, the capital receipts are no longer ring-fenced for housing but to supplement the spending of other departments and agencies.

The house sales scheme continues to be more generous than the equivalent schemes operated in the rest of the UK with no account taken of demand or targeting as part of a strategy to develop mixed tenure. Tenants are entitled to 30% on taking up the tenancy; 32% after two years, rising by 1% per year to a maximum of 60%. In the case of flats, the discount is 40% on becoming a tenant, 44% after two years rising by 2% per year to a maximum of 70%.

The Housing Executive has also introduced a standard processing time of twelve weeks from the date of application. Properties specifically made available for elderly or disabled tenants are exempt from the scheme, as are squatters, those in temporary accommodation and those in rent arrears unless this debt is settled before purchase. Tenants who sell the property within three years from date of purchase have to pay back the discount on a sliding scale. Sale within one year requires the entire discount to be repaid; between one and two years, 66% is repaid; and between two to three years 33%. After three years there is no clawback of discount.

There is also no obligation on the tenant who has exercised the right to purchase to offer the property for sale back to the Housing Executive. Consequently, we have over the last few years witnessed the Housing Executive buying back properties at full market value, under the Acquisition of Satisfactory Housing Scheme (ASH), which had not so long before been within its own stock. Indeed, this year housing associations have similarly been invited by the Department to identify and re-purchase back former NIHE properties in high demand areas to meet demands for social housing in certain high demand areas, such as West and North Belfast. It is claimed that such action has fuelled property prices in these areas.

There is also some anecdotal evidence that former housing executive properties account for the rise in private renting in some areas, with market rents now being paid where formerly the property was owned by the Housing Executive. The Executive has recently invited the University of Ulster to undertake some research in this area and the report is awaited.

It is clear that the house sales scheme has benefited many former tenants, particularly in high demand areas. With the annual rise in rents, coupled with the reducing mortgages rates, house sales will continue to be an attractive option for many tenants. In particular, those paying full rent or those receiving benefits with relatives prepared to purchase on behalf of the sitting tenant will wish to take advantage of the discounts and the "minimum risk" investment opportunity that this presents. At a time when less than 2000 new social housing units are being built by housing associations each year, the annual loss of over 4,000 Housing Executive properties each year will continue to affect the ability of social housing to meet housing need. The sector will further contract and become a tenure choice only for those unable to buy for themselves, or with the help of relatives who don't even need to live in the property.

It should also be noted that the Council of Mortgage Lenders has expressed its concern about the possible extension of the RTB to housing associations, as lenders have funded housing associations to undertake new build with private finance on the assumption that the stock, and thus the security of the loan, will remain in the ownership of the association. They are anxious that the receipts from sales may not cover the outstanding debt and it is possible that some lenders may seek immediate repayment of outstanding debt on each property as and when it is sold. Future borrowing may, as a result, be frustrated.

CIH Policy on the Right to Buy

The CIH policy on RTB is long-standing and is stated in the policy reports Sustainable Home Ownership, Housing Makes the Difference, Putting the House in Order and Putting People First. The CIH is not opposed to the extension of the Right to Buy to all tenants of social housing. The Institute wants to see reforms of the RTB which achieve a better balance between the aspirations of individual tenants to own their own homes and the needs of communities to provide decent rented housing for people who need a home but cannot or do not wish to buy. Recent research in England has confirmed the view that many of those who have bought under the RTB have benefited considerably by doing so. In some parts of the UK, however, sales have undermined the sustainability of the social sector by depriving it of its best properties. In some cases, particularly in rural districts, sales have significantly reduced the overall supply of affordable rented housing. Given the low level of new development in the social housing sector, it does not seem sensible to continue providing substantial discounts for properties that still experience strong demand.

What is required is greater flexibility on discounts to enable the Housing Executive to reflect sub-regional markets and the local housing strategies. Within Northern Ireland, the ability to apply a more local approach would mean that discounts could be restricted on properties in high demand areas and relaxed in neighbourhoods where it is believed sales could help create balanced or stable communities. The application of the right to buy could then become a useful tool as part of a national housing strategy to ensure balanced sustainable communities.

There is also a clear case for reform the RTB to protect rural areas. Any extension of the RTB to housing associations should be "Rural Proofed" and brought into line with the Right to Acquire so that settlements with population of less than5,000 are exempt from the RTB.

The Department for Social Development clearly believe that the extension of the RTB to all housing association tenants is fair and equitable. However, the current scheme is neither fair or equitable as larger discounts are awarded to tenants living in high demand areas than those in lower demand areas with lower property values. The financial impact of extending the RTB to housing associations as it currently exists could also affect the financial viability of some associations, particularly locally based community associations who have up-graded their properties.

The CIH recommends:

 

    • Ending the obligation on the Housing Executive to sell under RTB.

 

    • Allow policies for both Housing Executive and housing associations sales of existing and new properties to be decided according to local strategies.

 

    • Allow discounts to be determined locally subject to a new national monetary cap.

 

    • Allow Housing Executive and housing associations to retain all future RTB receipts for housing purposes.

 

    • Introduce quota selling to preserve a certain percentage of homes or particular types of stock.

 

    • Introduce tighter rules on eligibility.

 

    • Standardise discounts for flats and houses.

 

    • Protect rural areas from losing affordable housing through exempting settlements of population less than 5,000.

 

    • Condition of sale that property offered back to former landlord.

 

    • Ensure financial viability of existing associations by allowing exemption for a specified number of years.

 

    • Introduce transferable discounts for tenants in high demand areas wishing to buy, allowing stock to be retained.

 

    • Cost floor rule to include repair and maintenance in addition to capital costs.

 

    • Examine the three year clawback period.

 

  • Introduce a system of monitoring and review.

The Housing Executive has operated a scheme to sell to sitting tenants since 1979. It is clear that after this time the operation of the Right to Buy is in need of fundamental review. The current passive proposals to extend the RTB to housing associations in Northern Ireland will not create equity as is intended. There is, however, an opportunity to modernise the house sales scheme for all social housing tenants with flexibility on discounts linked to housing need.

We welcome the review which the Social Development Committee has initiated, and trust that our views, comments and opinions will be of assistance.

KIERAN WALSH
Director

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Written Submission by:
PADDY HILLYARD, PADDY GRAY AND URSULA MCANULTY

30 March 2001

Thank you for asking us to contribute to the discussions on the private sector. At the moment we are conducting a study for the Northern Ireland Housing Executive on the privately rented sector in Northern Ireland, which also includes an examination of the current law in relation to that sector both in Northern Ireland and Great Britain. This element of the study is not yet complete, but we will forward the analysis when it is finished. The research in which we are engaged is on-going and we will be in a much better position to provide detailed comment on the areas which you have listed by the summer.

In the meantime we would like to make one general comment and a number of specific points. The general comment is that in order to carry out an adequate study of the private sector it is necessary to consider the fiscal and subsidy regimes in all tenures. We acknowledge that fiscal policies are outside the remit of the NI Assembly, however, it is our view that the owner occupier sector is in a more advantageous position than other sectors.

Houses in Multiple Occupation (HMOS)

There are a number of issues which need to be considered in relation to HMOs: the voluntary licensing scheme, standards of accommodation and service delivery, grants, allocation of units to social housing tenants.

Voluntary Licensing Scheme

A number of problems have been experienced in voluntary registration schemes in Great Britain. These include levels of fees applied, who the registration agency should be, the amount and quality of service from the registration agency, and the reluctance of landlords to participate. It is important that any voluntary scheme should accommodate these problems and any voluntary scheme should be attractive to landlords.

Standards of Accommodation and Service Delivery

We support the idea of minimum standards but we would question the method of policing in the sense that once the standards have been met how are they maintained? We believe that minimum standards can be achieved by targeted grant support which reflects the actual costs of improvement in contrast to the current regime where estimated costs for grant purposes are substantially lower than open market costs. We also believe that not only should there be minimum standards but that there should be different categories of standard reflecting the quality of the dwelling and the quality of management. We further suggest that there should be a service level agreement between landlord and tenant. This could be introduced at the outset of the tenancy for an agreed period between the landlord and the tenant.

Grants

We support the introduction of discretionary grants which should be targeted on an area basis which must include dispersed rural areas given the high rate of unfitness in the west of the province. We also support group repair schemes. In addition, the allocation of any grant aid must be monitored in line with the equality and new TSN agendas.

Allocation of Units to Social Housing Tenants

In order to protect the public subsidy and to achieve equality objectives we recommend that a proportion of prospective tenancies which are created as a result of grant aid, be specifically allocated to social housing tenants.

Star System

Many of these issues could be addressed by the introduction of a grading scheme such as the awarding of stars depending on the quality of accommodation and the standard of service. This could be based on similar schemes operated by Tourist Boards whereby star categories can run from one to five. This would produce a sound basis for registration and also provide the tenant with a statement of what they can expect within each category. We would recommend a differential fee structure depending on the category awarded. There would then be an incentive for landlords to pay higher fees for higher category properties. These could then be widely publicised.

We hope these comments are helpful.

PADDY HILLYARD
PADDY GRAY
URSULA McANULTY

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Written Submission by:
HOUSING RIGHTS SERVICE

29 March 2001

1. Introduction

1.1 Housing Rights Service is an independent voluntary organisation providing advice, information and training on housing issues to individuals and agencies throughout Northern Ireland. Established in 1963, the organisation deals with approximately 5000 enquiries each year from individuals who are homeless or in housing need. In the last 12 months just over 25% of the enquiries we received were from people who are experiencing problems with privately rented accommodation.

1.2 In the letter inviting our comments reference is made to "current NI proposals". I would like to emphasise that as we have not been made aware of the detail of any specific proposals, we are not in a position at this stage to offer comment on these. This response therefore focuses on highlighting common areas of concern for our clients and has been informed by our practical experience, on a daily basis, of providing advice and assistance to people who live in the private rented sector.

2. Context

2.1 Until now, only limited research has been undertaken into the private rented sector within Northern Ireland and therefore little is known about the character or composition of the sector or indeed the role which it plays in the wider housing market. It is however our view that, whilst statistically the sector may be relatively small, it plays a distinct and complementary role to the social sector and makes a very significant contribution to meeting the housing needs of those who are unable or unwilling to access social housing.

2.2 The private rented sector caters for a diverse range of people including affluent professional households who typically inhabit the high quality accommodation at the upper end of the private sector. Traditionally however it has also been an important source of housing for vulnerable groups including students, many of whom are experiencing independent living for the first time, and elderly people on low incomes who are long term residents in this sector. These groups tend to be concentrated in the lower end of the market characterised by disrepair, poor management standards and lack of rights for the people who live there.

3. Houses in Multiple Occupation and Regulation of the Private Sector

3.1 Given the important role of the private sector within the general housing market there is an urgent need for a strategic approach to be taken to improving both physical and management conditions within not only HMOs but the private rented sector as a whole. Housing Rights Service believes there should be a legislative requirement to develop and implement a strategy for this sector and the formulation of this strategy should involve not only the key statutory players but also those from the voluntary and private sectors.

3.2 In our experience many private rented sector landlords do not have the necessary resources or expertise to provide a quality management service to their tenants. We believe that good practice within this sector should be encouraged through the development of resources for landlords and by ensuring networks are available for both landlords and tenants to advice them on their rights and responsibilities. In particular we would support the establishment of a tenancy relations service with an independent mediation role which aimed to prevent/proactively resolve difficulties which may arise between landlords and tenants.

3.3 A particular problem for private sector clients seeking advice from our agency is the threat of harassment and illegal eviction from their homes by their landlord. At present the Housing (NI) Order 1992 provides local councils with the power to investigate such incidents and to prosecute landlords. In practice however to implementation is on an ad hoc basis and the degree of protection afforded to tenants is largely dependent on the District Council area in which they live. We do not consider this lack of uniformity to be appropriate and believe that there should be a DUTY on councils to investigate allegations of incidents which have resulted in a tenant losing their home. Regrettably we have also been involved with clients where the Police have assisted the landlord in illegally evicting the tenant from their home and we are concerned about the general lack of awareness of the law in this area.

3.4 There is a need to clarify the legislative definition of "Houses in Multiple Occupation". Following the Barnes case there has been there has been uncertainty in this area and many properties previously regarded as HMOs would be excluded under the definition emanating from this case. This includes for example, student lets and buildings which are divided into self contained flats. In practice the Housing Executive has continued to adopt a broad definition but Housing Rights Service believes this matter requires legislative protection and recommends that an appropriate definition would be "any house (or flat) occupied by more than two persons who are not members of the same family".

3.5 There is also a need to strengthen the present regulatory framework in relation to Houses in Multiple Occupation. Under the terms of the Housing (NI) Order 1992, the Housing Executive has the power to serve notices requiring landlords to remedy shortcomings in both physical and management standards within HMO properties. In practice however the Housing Executive has, at times, been reluctant to use these powers. Regularly our clients have been advised that the Executive was not undertaking inspections or issuing notices as they did not have sufficient resources to meet the demands which would be subsequently generated for grand aid. Housing Rights Service believes that the legislation should be amended to place a DUTY on the Housing Executive to act to remedy poor standards which compromise the welfare and safety of tenants.

3.6 Housing Rights Service welcomes the proposal to introduce a licensing scheme for HMOs from September 2001 and would agree with the suggested detail of the scheme contained in the consultation paper on this matter which was issued in January 2001 by the Housing Executive. We firmly believe however that to be effective in tackling the problems which exist in this sector, the scheme must be placed on a mandatory basis. It appears inevitable that the voluntary scheme will only be taken up by good landlords and will therefore have little real impact on conditions. We would therefore urge the Committee to ensure the inclusion in the forthcoming legislation of a requirement for compulsory licensing of HMOs. This would place no additional burden on responsible landlords - only those providing substandard accommodation would have anything to fear. The introduction of such a scheme would contribute positively to promoting social inclusion by guaranteeing standards to vulnerable tenants and ensure VFM by providing a mechanism for guaranteeing that public resources spent on housing benefits to tenants were supporting good standard housing.

3.7 Many of the people who currently live in the private rented sector, particularly within HMOs are not tenants but licencees. In practice therefore they enjoy very limited rights, have no legal protection against harassment and illegal eviction and can be asked to leave their home with virtually no notice (reasonable packing up time only). Whilst we accept this may be appropriate for some types of HMOs for example, Bed & Breakfast establishments we do not consider it to be appropriate in other types such as bedsits/shared flats, some of which are occupied by long term residents. Housing Rights Service believes people living in certain categories of HMO accommodation should be entitled to a written contractual licence which includes a specified notice period.

4. Private Sector Renewal

Housing Rights Service is unable to comment on the detail of any proposals which may exist to move from mandatory to discretionary grants schemes in Northern Ireland. We do however believe in the principle that people are entitled to adequate housing which meets basic fitness standards and is appropriate to their needs. We would not therefore support a proposal to make grants discretionary in any circumstances where the work is required to bring a property up to basic fitness standard or where the work is associated with providing a disabled person with accommodation appropriate to their needs. In particular we would be concerned that if disabled facilities grants were not available on a mandatory basis this would further restrict the accommodation options available to disabled persons, have an adverse impact on their ability to remain in their homes and subsequently increase demand for the provision of specially adapted dwellings in the social sector.

5. Should you wish clarification or additional information on any of the comments contained in this response contact:

JANET HUNTER
Housing Rights Service
72 North Street
Belfast
BT1 1LD

Tel No: 028 90245640
Fax No: 028 90312200

Email: janet@housing-rights.org.uk

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Written Submission by:
CHARTERED INSTITUTE OF HOUSING IN NORTHERN IRELAND

29 March 2001

The Chartered Institute of Housing in Northern Ireland welcomes the opportunity to make this written submission as part of the Social Development Committee's enquiry into Housing in Northern Ireland in light of the proposed Housing Bill.

The CIH is the only professional body representing all those working in housing. Our purpose is to take a leading and strategic role in encouraging and promoting the provision of good quality affordable housing. We have over 17,500 individual members working for local authorities housing associations, Housing Executive, educational establishments and the private sector.

As requested, this submission will pay particular attention to the stated terms of reference regarding Private Sector Renewal and Houses in Multiple Occupation and Regulation of the Private Rented Sector. In due course, we would welcome the opportunity to respond on the remaining topics that are to be considered as part of this review.

In general while we support many of the outline proposals in the proposed Housing Bill, the provisions are widely seen as a "tidying up" exercise to address a number of existing anomalies rather than a comprehensive housing strategy for Northern Ireland. We are pleased that the social Development Committee has commenced this consultation process which should assist in developing a more strategic approach to housing services which the piecemeal, incremental approach in the proposed legislation appears to lack.

Our comments are informed from the experiences of our members and colleagues from Northern Ireland and the UK, who are active in the areas of urban renewal, private rented sector and policy development.

Private Sector Renewal

"To investigate current proposals to move from mandatory to discretionary grants schemes and group repair schemes and, if appropriate, conduct comparisons with the United Kingdom and the Republic of Ireland, and produce a report."

Research by the Housing Executive has shown that grant aid is the most important policy instrument available to tackle rural and urban unfitness. Given the financial pressures which the Executive has faced over the last number of years on its grant budget, it is felt that a change from mandatory to discretionary grants (except in the case of Disabled Facilities Grants) will ease the pressure on the grants budget and will ensure that resources are directed at the areas and people in greatest need. This, it is argued, will enhance the ability of the grants scheme to meet its main aim of targeting unfitness and directing financial resources to be spent as effectively as possible.

The proposal to move from a mandatory to a discretionary grant regime will mirror the legislative changes introduced in England and Wales under Parts I and IV of the Housing Grants, Construction and Regeneration Act 1996. Similar proposals formed part of the action plan prepared by the then Department of the Environment (NI) following the Housing Policy Review, "Building on Success", undertaken in 1996.

However, since 1996 there were a number of factors that precluded the introduction of the housing legislation proposed at that time, not least as a result of the evolving political structures for governing Northern Ireland. Nevertheless, such a singular move to introduce a discretionary grants scheme at this time fails to take account of developments since 1996; the impact of this change; proposals in the English Green Paper; calls for a move from fitness standards to fitness ratings and the recently released consultation document on Private Sector Housing Renewal which proposes Reform of the Housing Grants, Construction and Regeneration Act 1996, the Local Government Act 1989 and Housing Act 1985.

As it seems clear that the proposed housing legislation for Northern Ireland is unlikely to be introduced before April 2002, there is, undoubtedly, an opportunity to consider and evaluate these additional matters as part of the process of housing policy development in Northern Ireland.

The experience of many Local Authorities in England is that the move to discretionary grants, while allowed targeting at low-income homeowners, led to the total grant budget not being spent and being redirected to other spending priorities beyond housing services. In practice, many authorities have made increasing use of home repair assistance, which is subject to fewer controls, and less use of the other main grants. Because of the controls on the other main grants, local authorities are using home repair assistance for small scale but urgent repairs (such as replacement of old electric cables). While justifiable, this was not the main purpose for which the grant was intended, which was to help older and disabled people with minor but essential repairs, improvements or adaptations.

In addition, it has been found that the widespread use of grants can sometimes have a perverse effect. For example, in some areas, targeted under the discretionary grant regime, where large grants are given as part of an area-based renewal programme, these can discourage homeowners with resources of their own from carrying out the repairs themselves.

Recently, in England and Wales, there have been far reaching changes to the Private Sector Renewal Support Grant. From this year, allocations from the Department of the Environment Transport and the Regions (DETR) is in the form of a single housing pot with a modest separate provision for disabled facilities grants of £75m rising to £89m in 2003/4. Funding for Private Sector Renewal will have to compete with other spending priorities. Since 1996 in England the move to discretionary grants has been in tandem with drastic cuts in the resources available under the grants regime. We would not wish to see such reductions replicated here.

In the recent Green Paper "Quality and Choice: a decent home for all", the Government expresses its aim to allow local authorities even more flexibility over grant distribution. They invited ideas on how to change the grant scheme and broaden local authority loan-giving powers to encourage home-owners to commit more of their own finance to improvements and maintenance. In addition the Government is looking at ways of allowing local authorities to make payments to third parties, such as Home Improvement Agencies, to lever in private finance for repairs and maintenance.

These proposals are now set out for consultation in the Private Sector Housing Renewal document issued by the DETR this week, with responses to be received by 29 June 2001. It should be noted that on the list of organisations and individuals to be consulted on these proposals, (provided by the DETR as an Annex to the consultation document), the Department for Regional Development in Northern Ireland is included, but not, it would appear, the Department for Social Development.

The CIH has been invited to respond to the consultation document and I am happy to forward a copy of this response on completion, should you require.

The Housing Executive in its response to the "Building on Success" policy review back in 1996, welcomed the proposed change from mandatory to discretionary grants believing that this would ensure that resources would be available to tackle a higher number of unfit properties. There are some 44,000 unfit properties in Northern Ireland, largely in rural areas and research has shown that around 75% of the reduction in rural unfitness has been achieved through grant aid. It remains a key objective of the Housing Executive to reduce unfitness across all tenures and some 9,000 grants are approved each year.

Another issue, which requires consideration as part of this Review, is the possibility of replacing the current fitness standards with a new fitness rating to be used to improve the overall condition of stock in all sectors, as well as dealing with properties on an individual basis.

Although enacted in different legislation, the statutory standard of fitness for Northern Ireland is the same as England and Wales and is based on a minimum habitable condition. Structural stability, freedom from damp, adequate lighting and ventilation, the piped supply of wholesome water and adequate drainage, facilities to prepare and cook food and a WC and bath/shower and hand basin with hot and cold water are all statutory requirements. Failure to meet just one of these criteria, making the property "not reasonably suitable for occupation" renders it unfit for human habitation and requires the Housing Executive or District Council Environmental Health Officers to use cost-benefit analysis to decide on repair, deferred action, closure or demolition.

In Scotland there is a "below tolerable standard" rating which closely resembles legislation for the rest of the UK except that disrepair and amenity provision are excluded but includes satisfactory access to all external doors and buildings.

Levels of enforcement of the existing fitness standards applicable throughout the UK are low as the discretionary grants system does make enforcement difficult especially in respect of owner occupiers who either may not be able to afford to or may not wish to carry out improvements. However, it may be possible to stretch available funds to a large number of households by combining partial grants with low cost loans in a "matched funding" arrangement. This may give some owners an incentive to invest in their homes and we welcome the new powers proposed by the Government in the recent consultation document to provide assistance across tenures through grants and loans.

The DETR is also currently working on a new Housing Health and Safety Rating System (HHSRS). Its underlying principle is that any dwelling should be a safe and healthy environment both for its occupants and visitors, and has identified 24 hazards compared to the ten in the fitness standards. It covers houses, flats, bedsits, including any shared access areas.

Such a rating standard could include internal arrangement, radon pollution, thermal efficiency etc and would be much more comprehensive and objective than the current fitness standard. The dangers of Radon Gas in homes, for example, is not currently a factor in determining fitness and yet is estimated to be responsible for 60 out of 800 cases of lung cancer in Northern Ireland each year. This reinforces the proven correlation between housing conditions and poor health.

The fitness standard could be introduced in Northern Ireland and widened to include more measures of condition and to provide an effective measurement for non-traditional stock. As a result, within Northern Ireland, the Housing Executive could have responsibility towards property fitness in all sectors and have a duty to enforce a nationally set basic level of fitness together with powers to enforce locally set aspirational targets. The duties should be proactive as well as reactive with a requirement to draw up local strategies to deal with unfitness. Reducing the level of unfitness would then become a measurable key performance indicator in meeting the stated objective of alleviating unfitness as set out in Housing Executive annual report. Current and future proposals for private sector renewal are almost exclusively reactive in response to a grant application.

The Housing Executive could promote the importance of property fitness and condition and to offer advice and assistance to homeowners and landlords. Home owners should be encouraged and landlords compelled to maintain their properties, possibly as part of a compulsory licensing scheme for the whole private rented sector, as discussed in the second part of this submission.

Other innovative approaches could be encouraged such as building on the Quality Mark scheme in England which identifies responsible builders for owner occupiers, and negotiating a reduced price for work to be carried out in bulk by a recommended contractor, using the "Egan principles" on rethinking construction.

A fitness or condition rating would be a useful tool for measuring condition, and making the condition public could be an incentive for individuals to maintain their property. Owners, for example, could be encouraged to incorporate the fitness/condition standard in the "sellers pack" which is being introduced as part of the house buying process in England and Wales but does not yet appear to have made it on to the current housing agenda for Northern Ireland.

Research has also shown that some 260,000 Executive grants have been completed since 1976 plus a further 110,000 small value Repair Grants issued by Belfast City Council, with a total spend of £250m. Investment in private sector grant aid in Northern Ireland easily outstripped investment elsewhere, and remains the highest in the UK. It is important that the level of investment is not diluted or put at risk with the proposed move from mandatory to discretionary grants.

It should also be noted that the grants available in Northern Ireland are broadly consistent with the grants available in England and Wales, subject to their own cost ceilings. However, the current Northern Ireland legislation makes provision for an additional and unique grant - the Replacement Grant. This grant, first introduced on an extra statutory basis in 1991, is only available in rural areas and allows the construction of a new house to replace an unfit home where improvement is uneconomic. To date over 1,300 replacement grants have been completed at a cost over £30,000 per property totalling nearly £40m. When the scheme was introduced the maximum grant was £50,000 but since 1996 this upper limit was reduced to £30,000. Now that the scheme has been operating for some ten years, there is an opportunity to assess the impact that this has had in addressing unfitness, particularly in Fermanagh where a third of the replacements have been completed.

Finally, it is important that the proposed move to discretionary grants takes into account the impact of other grants and funding priorities. The recently launched "Warm Homes" scheme has been criticised by some, including the Social Development Committee, for targeting support at the over sixties. The Minister for Social Development has responded to this perceived inequity by suggesting that others under 60 equally deserving support may qualify under the Housing Executive's Disabled Facilities Grant. However, such additional pressure on this grant can only lead to further delays with increased waiting times for those in greatest need.

It seems clear that rather than complimenting other grant programmes as proposed, the Warm Home scheme will add to the workload of Occupational Therapists who will be required to undertake assessments to determine eligibility, particularly as the Minister is seeking to have these cases fast tracked by the Executive. Clearly, additional funding will not be forthcoming to service these additional needs, as, if this were the case, this could have been simply incorporated in the DEES II scheme at inception. Cynically, the move the discretionary grants could allow additional resources to be redirected to achieve reductions in fuel poverty but at the expense of targeting unfitness, which is the accepted advantage of such a move.

In conclusion, The Chartered Institute of Housing is concerned that the Department is considering changes to the renovation grants without first setting clear targets for government policy in this area. In relation to the changes being proposed in England and Wales, the CIH will be calling for the reduction or elimination of unfitness in the private sector; equivalent to the ten-year target set for the social housing sector. In Northern Ireland no such target has been set, yet the fact that unfitness is concentrated overwhelmingly in the private sector suggests that a target is even more important here than in the rest of the UK. We, therefore call on the Department first of all to consider and consult on the objectives of the grant system, and a target for reducing or eliminating unfitness, before addressing the issue of whether or not a discretionary grant scheme would be a better tool than the existing scheme. Without clear objectives, a decision on the choice of tools is meaningless.

Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector

"To (1) examine current NI law and policy in relation to the above, conduct comparisons with the UK and Republic of Ireland, summarise existing NI practice in relation to HMOs and the PRS; and (2) identify benefits/disbenefits of new proposals and produce a report."

The current legislation affecting the Private Rented Sector in Northern Ireland dates primarily from 1978, although the history of the sector goes back to the early years of the century, and indeed up to 1939, about 90% of the housing stock was privately rented.

The current make-up of the sector is unique and has not followed developments and deregulation as experienced elsewhere in the UK or the Republic of Ireland.

Historically, the inflexibility of the rent restriction legislation laid to a rapid decline in the sector and by the mid-60's the sector had dropped to 34% of housing stock. By the end of the 70's it was 12%, falling to just 3.5% in 1994. Data on the current size of the sector is poor, reflecting the size of the sector in comparison with owner occupation and social housing cohorts. According to DSD statistics for 1999/00 the current size of the sector is 30,500 units, or 5.1% of the total occupied stock.

By the 1970's the conditions in the PRS were so bad that the Government entered into a lengthy debate and consultation about what should be done. This started in 1973 with a committee chaired by Sir Robert Porter QC and his report in 1975 revealed that of the 50,000 properties in the sector about half of the tenants were paying rents of less than 50p a week, and three-quarters less than £1. These levels of rent had produced a vicious circle resulting in lack of repairs and maintenance and further deterioration and neglect, with half the stock deemed to be unfit.

This led to the Rent (NI) Order 1978 and the establishment and definition of restricted and regulated tenancies and uncontrolled tenancies, which remains today the basis of the legislation affecting the PRS. Some amendments have been made by later amendments but the four basic principles set out in the 1978 Order remain unchanged. These are:

 

    • Tenants should only be asked to pay higher rents if the dwelling is in a reasonable condition.

 

    • Rent in the Private Sector should be in line with public sector rents.

 

    • Tenants in the PRS on low incomes should get the same financial assistance as tenants in the public sector.

 

  • Tenants should have greater protection against bad landlords.

In addition the Rent Order set out five basic rights for all private sector tenants:

 

    • The right to a rent book.

 

    • The right to claim Housing Benefit.

 

    • 4 weeks' notice to quit.

 

    • Due process of Law.

 

  • Freedom from Harassment and illegal eviction.

The most notable affect of the subsequent Housing (NI) Order 1983 was to introduce shorthold tenancies; to extent rent regulation to certain unregistered housing associations and to modify the regulated tenancy standard. The regulated standards have again been revised in the 1992 Housing Order and now correspond to the NIHE fitness standard.

The most recent DSD statistics for 1999/00 show that of the 30,500 private sector lettings, it is estimated that there are currently some 390 Restricted Tenancies and 6,126 Regulated Tenancies and 24,000 Uncontrolled Tenancies.

Restricted Tenancies are usually small properties registered with the DSD, possibly in a poor state of repair, for which the tenant can only be charged £1 per week, excluding rates.

Regulated Tenancies are usually properties of a better standard, for which the rent payable is limited to the amount registered with DSD which would be in line with what the Housing Executive would charge for the property under its Rent Scheme.

Uncontrolled tenancies can charge market rents without restriction and form the bulk of the sector in Northern Ireland.

The aims of the current legislation governing the controlled sector were to improve the property conditions, maintain security of tenure and to recognise the repair work of both landlords and tenants in the level of rent paid. Despite this, the 1996 House Condition survey shows that 88% of private rented properties are in need of repair and that 15.6% are deemed to be unfit. Clearly this situation needs to be addressed in terms of overall housing policy.

However, until now, little research has been undertaken into the Private Rented Sector in Northern Ireland and the CIH welcomes the recent announcement by the DSD that a working Group has now been set up by the Rent Officer for Northern Ireland to review the Private Rented Sector. The working group consists of representatives from Housing Rights Service, Environmental Health, Housing Executive, Estate Agents and landlords and will produce a report for further consultation in the autumn.

The remit of the working group will focus on developing a vision for the future of the private rented sector looking particularly at housing conditions; distinction between controlled and uncontrolled tenancies; security of tenure and rent.

At the same time the Housing Executive is pushing ahead with plans to introduce a voluntary licensing scheme for Houses in Multiple Occupation in Northern Ireland with proposals to place such arrangements on a statutory footing by inclusion in the proposed Housing Bill.

The CIH has welcomed the opportunity to respond to previous consultation documents on this issue and are currently putting together our detailed comments on the proposed scheme to be introduced in September 2001.

We agree that the aim of licensing should be to raise property and management standards and that it should be cost effective, manageable, with as little bureaucracy as possible. However, whilst it is true that HMOs present particular hazards related to the fact that by definition residents are not cohesive family groups, poor standards are not limited to such premises. There are many instances of very poor standards of management and property condition in other privately rented property.

The CIH considers that voluntary licensing arrangements could be extended to the rest of the sector, made mandatory by legislation. In Scotland mandatory licensing of HMOs has been introduced, while current proposals for England and Wales suggests mandatory licensing of HMOs and encourages voluntary licensing for the rest of the sector. We do not believe that such a combination will necessarily be sufficient to raise standards across the sector in Northern Ireland. Bearing in mind the size of the sector here, there is an opportunity to establish a flexible legislative framework to extend licensing to all categories of private rented properties. This could be phased in over a period of time beginning with HMOs and then extended.

Not only would this ensure a better deal for tenants and better use of public money being paid to landlords as housing benefit, but it could also help to raise the image of the sector and act as a catalyst for expansion. Better regulation is a prerequisite to establishing a healthy, quality and professionally run private rented sector.

The CIH is very much aware of the practical problems that licensing can present. Research carried out by Herriott Watt University in Scotland, and on voluntary licensing schemes in England and Wales found that schemes varied widely in their success. We are also aware that unduly punitive legislation could have the effect of reducing the supply of this type of accommodation. However, we believe that voluntary licensing of HMOs is a useful first step but would suggest compulsory licensing across the whole sector that is kept simple, cost effective and to make sure that only landlords operating at unacceptably low levels are driven out of the sector.

In summary the CIH recommends:

 

    • Extending licensing across the whole private rented sector not just HMOs.

 

    • Licensee should be an individual resident within Northern Ireland.

 

    • Licensee to be a "Fit and Proper person".

 

    • Premises owned and managed by public sector bodies and universities should be adequately covered by other regulator mechanisms.

 

    • Applicants should be compelled to sign up to an independent ombudsman service as a condition of receiving a license.

 

    • Appeals need to be kept simple, inexpensive and resolved quickly and locally.

 

    • In general, properties should be inspected before a license is issued, although different arrangements may be appropriate for landlords with a large number of properties.

 

    • The inspection process should include a grading of properties that pass and fail. Longer licenses should be granted to properties with fewer problems and the action to be taken with respect to failed properties should depend on the severity of the risk to residents.

 

    • Licenses should be issued for varying periods up to five years, depending on the condition, standards and risks associated with the property.

 

    • Housing Benefit should not be available in respect of properties where a license has been refused. Renewal of a tenancy in such circumstances should be an offence and incur a heavy fine. In the worst cases it would be appropriate to issue a closing order.

 

    • Basic training could be a requirement for obtaining a license as suggested in the DETR consultation document on mandatory licensing.

 

    • There should be a licensing fee to cover administration cost of scheme. Currently licensing schemes vary from £35-£435, although the Housing Executive does not propose to charge for licensing.

 

    • Licensing should be seen as an accreditation or kite-mark of quality in terms of condition and management.

 

    • A "Certificate of Market Rent" should be required as a condition of obtaining a license setting the maximum rent on which to pay Housing Benefit to act as a consumer guide.

 

    • This certificate could speed up the processing of Housing Benefit claims and reduce fraud.

 

  • Enforcement action required on management standards.

Housing policy development in the past in Northern Ireland has primarily involved evaluating developments elsewhere and "cherry picking" the parts that are perceived as most appropriate to us. However, devolution provides an opportunity to diverge from UK policy and develop a specific strategy reflecting the political, economic and social situation in Northern Ireland. While the introduction of a licensing scheme for the whole private sector would be problematic for the rest of the UK, this is, undoubtedly, manageable within Northern Ireland, owing to the size of the sector. Consequently, there is an opportunity to promote specific measures, such as licensing, to improve standards across the whole sector to preserve the health and safety of those occupying privately rented property.

As part of your enquiry, you are also seeking comparisons with the UK and the Republic of Ireland. Details of regulation in the Republic of Ireland can be had from a private sector report completed last year from a government-established commission on the Private Rented Residential Sector. It is comprehensive and the most up-to-date publication, summarising and critically analysing all the relevant legislation and regulations relating to private renting. Basically these regulations are minimalist and tenants of the sector have very few rights.

The issue of subsidisation of the private rented sector in the Republic of Ireland is more complex. In the Republic they operate a very problematic and complex discretionary system of supports for tenants under the auspices of the Supplementary Welfare Allowance Scheme, which is administered by the Health Boards and not the Housing Departments. There is no system of grants or tax relief for landlords as government has abolished most of the schemes previously in operation in an attempt to curb house price inflation. The only exception to this is landlords who are purchasing accommodation for letting in designated urban renewal areas. The issue of subsidising the tenure is more complex than the issue of regulation and a raft of reports have been published on the issue.

I would recommend that as part of your review on comparing PRS in the Republic of Ireland that the Social Development Committee looks at the Commission report. It would also be worth contacting "Threshold" - the private rented sector advice and lobby group based in Dublin. Should you require any further details or contacts, I would be happy to provide.

I trust that the Social Development Committee finds these comments, views and opinions of use in consideration of the matters currently under review. I am happy to elaborate on any of the points and recommendations made. I shall forward further written submission on the additional topics under review by the 20th April, as requested.

KIERAN WALSH
Director

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Written Submission by:
SHELTER (NORTHERN IRELAND)

29 March 2001

Shelter (Northern Ireland) would like to make this summary submission to the Social Development Committee regarding items 1. and 2. on the consultation list; namely:

Private Sector Renewal; and

HMOs and the Regulation of the Private Rented Sector.

We would be pleased to make a more detailed submission and/or present direct evidence to the Committee if that would assist consideration of the issues.

1. Private Sector Renewal

There are many aspects of this, but we assume the focus is on strategies and grant aid to assist improvement of older property, including both occupied and un-occupied unfit dwellings. The Committee may wish to note that Shelter has extensive experience of this through our agency work in the West of the Province on "Home Repairs for the Elderly".

We have always supported the principle of grant-aid and had been involved from the start in the Home repairs services, as well as in the lobby for "replacement grant" in specific circumstances. We would be concerned at any move to discretionary grant structures as this would place resources for the work at risk. We would also have concerns at too restrictive a format of means-testing. If the targets on energy consumption reduction etc are to be met; if derelict property is to be brought back into use and if people of modest income are to gain access to owner occupation in the present context of rocketing prices, incentives and assistance must be more widely available. Projects such as "homesteading" could be considered for re-introduction alongside existing solutions.

We are specifically concerned that the present grant structure fails fundamentally where works requirements for eligibility for grant far exceed the maximum grant available, so the most needy cannot avail of the system. We know of cases where this only comes to light when work has started and great hardship results.

Even though the Private (owner-occupied) sector seems buoyant, there are remaining needs for support.

On the other hand, we remain substantially unconvinced of the need or merit of promotion of "renewal" in terms of expansion of Private Renting. We comment below on this. Private rent can and should only have a marginal role.

2. (a) HMOs

We note the recent changes in regulations with concern on two counts.

Firstly there has been practically no discussion or consultation on the changes before they were made.

Secondly, the changes appear to substantially reduce standards through omission of requirements as well as reduction of some specific standards.

We fully support the licensing proposals and would like to see these given "teeth". To date, enforcement rather than required standard has been the weak link in the process.

(b) Regulation

We are concerned that there has been no significant review of this since the 1975 Porter Report and the 1978 Rent Order. There needs to be proper regulation and tenant protection. It is ironic and wrong that legislation gives greater protection to an individual in securing office premises than his/her home.

The recent discussion of "duty of care" legislation is irrelevant to most rented accommodation because the landlord has no duty to repair or maintain in the contract. This needs to be changed.

Where there is rent regulation, and we believe there should be more, the present conceptual link between private and public rents is fair and should be retained. The value of a dwelling to the tenant is the same regardless of owner.

Obviously the HMO regulations cover some aspects. General consumer legislation such as "Sale of Goods" could be applied, and the Fire Safety and rented furnished dwellings regulations, offer some help, but these provisions are dispersed and not well known. A piece of coherent legislation focusing on both tenant and landlord legal obligations for all tenancies is needed. The core issue is that in most cases, a tenancy is not a free bargain between individuals, it is normally a landlords' market and the prospective tenant is under duress. Certainly the dissatisfied tenant arguing for action is under both duress and threat of becoming homeless and therefore "free market" concepts are inappropriate and a denial of basic protected in most other forms of trading.

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Written Submission by:
THE NORTHERN IRELAND FEDERATION OF
HOUSING ASSOCIATIONS

28 March 2001

I refer to your of 15th February 2001 requesting comments on the following aspects of the proposed Housing Bill for Northern Ireland.

(a) Private Sector Renewal

(b) Houses in Multiple Occupation (HMO) and the regulation of the Private Rented Sector.

As the representative body for all DSD-registered housing associations in Northern Ireland and a number of unregistered associations the Federation welcomes the opportunity to convey our perspective on both of these issues, as follows:

(a) Private Sector Renewal

(i) The Federation accepts that it is important that meaningful comparisons should be made with the UK Regions and also the Republic of Ireland.

(ii) As the majority of housing unfitness lies outside the social housing sector (House Condition Survey, NIHE, 1996) the Federation suggests that it may be appropriate to review the size and balance of the budget for grants to the private sector.

(iii) It is not self-evident to the Federation that a move from mandatory to a discretionary grants regime would necessarily be beneficial so we suggest that the rationale by reviewed in relation to the fundamental aims of the policy.

(iv) Most NIHE grants to the private sector have been means tested for quite a number of years. We suggest it may be time to evaluate the impact of the "test of resources" and the grant ceiling in relation to the aims of the grants policy.

(v) We strongly support Group Repair Schemes but feel that the eligibility criteria should be widened and the scheme should generally be made more attractive.

(b) HMOs and the Regulation of the Private Sector

(i) The Federation welcomes the proposal that the DSD's responsibilities for maintaining the Rent Register of private tenancies should be transferred to the NIHE.

(ii) The Federation also welcomes the idea of a voluntary code as outlined in the HMO Strategy which the NIHE issued recently.

(iii) In relation to the proposed Voluntary code for HMOs, we recommend that:

 

    • All registered housing associations with HMO accommodation should be designated under the NIHE's Strategy as competent organisations for the risk assessment of their own properties. Otherwise there would be wasteful and confusing double regulation.

 

    • A client group should be identified on a proposed register against each HMO. Otherwise hostels for people with a particular special need could be inundated with enquiries from other people seeking accommodation.

 

  • Associations would endorse a basic standard of management for each HMO. To avoid excessive bureaucracy and reflect the considerable diversity of the client groups in HMOs, the aim of the service in the HMO and the physical layout of the HMOs, any mandatory standard should be simple and focus on the most basic issues, notably health and safety.

If you have any questions or comments on our reply please contact me.

GRAHAM MURTON
Housing Policy & Research Officer

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Written Submission by:
HEALTH ACTION NORTH AND WEST BELFAST

28 March 2001

Thank you for your correspondence regarding the inquiry into housing in Northern Ireland and the proposed Housing Bill.

The current stages of your inquiry are of less direct relevance to the North and West Belfast Health Action Zone than subsequent areas of inquiry. Nevertheless since North and West Belfast Health Action Zone has at its heart, the need to tackle inequalities in health and well-being throughout North and West Belfast the inquiry is to be welcomed. Housing is a key determinant of health and in particular we would be very interested in work which relates to houses of multiple occupation and regulation of the private rented sector.

I would be grateful if you could keep me informed of the progress of your inquiry. We would be delighted to assist in any way which you feel is appropriate.

I append a copy of our Action Plan for your information.

 

MARY BLACK (MS)
North and West Belfast Health Action Zone Leader

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Written Submission by:
COLERAINE BOROUGH COUNCIL

28 March 2001

Coleraine Borough Council recently considered the content of your letter dated 15 February 2001 and would wish the following matters to be addressed by the Social Development Committee in its deliberations on the content of the proposed Housing Bill:

Private Sector Renewal

Council is concerned about the plight of owner-occupiers whose properties are in need of repair, particularly the elderly owner-occupier. The present grant scheme is biased towards the rented sector in that landlords can avail of repair grant maximum up to £5500 of eligible expenditure whilst owner-occupiers are restricted to £500. Whilst minor works grants are available to persons over 60 years receiving a means tested benefit, these are limited to a maximum of £3240 (eg 3 x £1080 for a maximum of 3 applications in 3 years).

Elderly persons who are not on means tested benefit because their income/savings are just above the qualifying criteria are therefore unable to obtain grant assistance to rectify disrepair to their dwellings other than for very minor items. As a result man y elderly owner-occupiers do not receive any help and their dwellings gradually fall into a dilapidated state.

Council would wish the grant scheme to be revised to redress the imbalance, to increase the grant ceiling particularly for elderly owner-occupiers and to widen the qualifying criteria to include those caught in the poverty trap. Council would also wish to see a proactive scheme in place whereby elderly owner-occupiers are actively encouraged to take up available grants.

Council is of the opinion that the above actions will not only enhance the quality of life for elderly owner- occupiers but will prevent dwellings gradually declining and becoming within the unfit category.

Houses in Multiple Occupation and Regulation of the Private Rented Sector

Council has already made its views known on the situation on houses in multiple occupation having responded to the Consultation paper on HMO Strategy in 1999.

Council is concerned that the issues it raised then are still outstanding. I enclose a copy of Council's response and would request that the issues highlighted be included in the Committee's review.

S G MONTGOMERY
Director of Environmental Health

16 September 1999

HMO Strategy: Consultation Paper

Coleraine Borough Council recently considered the content of the above document and I have been instructed to forward Council's representations on the issues arising therefrom.

Council has in the past expressed concern regarding standards, particularly those relating to fire safety in houses in multiple occupation (HMO's) many of which are occupied by students in the triangle area of the Borough. Council is also mindful that HMO's also tend to be occupied by persons at the lower end of the socio-economic spectrum who by inference lack the ability to exert any grant influence over their circumstances. Council would wish their position to be taken fully into account. In that regard one glaring omission from the strategy is the ability of the Housing Executive to exert influence on standards in HMO's by making payments of housing benefits to those individuals' landlords conditional on the premises being up to satisfactory standards.

Council would wish that principle to be incorporated in the strategy.

On the specific matters raised in the document Council would make the following comments:-

Legal Framework

It is noted that legislation is to be introduced in England to clarify the whole situation with regard to the uncertainty about the definition of an HMO.

Council fully supports the Executive's proposals to have that legislation introduced to Northern Ireland.

Strategic Timetable

Council has in the past called on Government to give sufficient and separate funding to the Executive to enable action to be speedily taken to address the HMO problem.

Council is of the opinion that the proposed ten year strategic timetable is far too long given the extent and seriousness of the problem. Council is seriously concerned that the strategy is also stated as being dependant on the availability of finance.

Given the reported numbers of unsatisfactory properties and the inadequate fire safety arrangements Council considers that this is too long a period and too uncertain a commitment.

Council would wish the Executive to seek and dedicate greater financial resources to enable the problem to be tackled with a greater urgency.

Council is also concerned that the whole principle of the Executive's approach to HMO improvement revolves around the provision of grant aid to the landlords.

Council takes the view that landlords derive a considerable income from the many tenants of their properties and Council would wish to see more responsibility for the carrying out of the required improvements to be place on owners of the properties. The carrying out of improvements should be required irrespective of the availability of grant aid and the enforcement policy should reflect that principle. This will also help to speed up the improvement process and will have the beneficial side effect of freeing up grant aid to what Council considers the more deserving sector - the improvement of single occupancy dwellings particularly those in the rural community.

Priorities for Action

Council notes that area action is proposed and is concerned at the fact that no areas are identified in the Coleraine area.

Council is concerned that the Executive's resources would be directed away from the Borough and that the many HMO's located within it which would require action would not receive attention.

Council would seek an assurance from the Executive that this will not be the case.

Promoting Better Standards

Council notes that there are proposals to introduce a mandatory licensing scheme in England.

As with the proposed legislative changes Council would wish to see that scheme introduced here without delay.

Whilst Council welcomes any initiative to raise standards it is concerned that resources will be directed away from enforcement action to implement a voluntary scheme which would only be of benefit to properties which are already up to standard. It notes that only 450 properties have been improved with grant aid. These would automatically be included in the voluntary licensing system. Council is concerned that there would be no sanction on the owners of the estimated 2800 unsatisfactory properties and similarly no sanction on landlords of properties about which the Executive has no knowledge if they fail to register.

Council is of the opinion that the Executive's resources should be directed at dealing with the unsatisfactory properties and that there is no advantage in pursuing a voluntary licensing scheme in advance of a mandatory one. Rather, Council feel that the Executive should lobby Government to speedily introduce the mandatory licensing of HMO's coupled with the making available the resources necessary to implement such a scheme.

Relationships

Council welcomes the proposal to form a landlords' forum. However Council notes that there is no mention of district council representation.

Council is of the opinion that district councils should be represented and that local knowledge would be a valuable asset to such forums

Council similarly welcomes the production of training and awareness packages for landlords and managing agents.

Service Delivery

Council is in agreement with the proposal to consolidate HMO operations by delivering services from two specialist outlets located in Belfast and Coleraine given the concentrations of HMO's in these areas.

Monitoring

Council welcomes the proposal to continue to monitor the HMO sector. However, Council considers it essential the information collated should be effectively utilised to ensure that sufficient funding and resources are sought, dedicated and directed at solving the HMO problems detailed in the document.

I would be grateful if you would ensure that due cognisance is given to Council's representations.

S G MONTGOMERY
Director of Environment Health

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Written Submission by:
NUS-USI

27 March 2001

I write on behalf of the NUS-USI, enclosing two submissions to the above inquiry. We felt that, given the complexity of the issues involved in this review, we should separate the two strands and submit individual papers on HMOs and the private rented sector.

I hope this is acceptable and, if you require any further information, please do not hesitate to contact me.

PETER O'NEILL
Manager

A Submission to the Social Development Committee on 
Houses in Multiple Occupation(HMO)

March 2001

1. Introduction

NUS-ISU welcomes this opportunity of responding to the Committee's inquiry on Houses in Multiple Occupation (HMO). NUS-USI is the umbrella body for student's unions in further and higher education and exists to provide representation and services to approximately 185,000 students in tertiary education throughout Northern Ireland.

Our response to this inquiry is based on policies adopted by students' unions and the national unions - the National Union of Students UK and the Union of Students in Ireland. It will concentrate on those issues which we feel are of most relevance to students in Northern Ireland. We have separately forwarded our views on the regulation of the private rented sector for the Committee's consideration. We will be pleased to provide any additional information in support of these submissions.

2. Key Issues

2.1 Students

NUS-USI welcomed the attention paid by the Executive to the position of students within its strategy in June 2000. The inclusion of student properties within the database is a long overdue development. Some 12,000 students reside in the private rented sector - many in category B, shared houses.

Yet, despite this focus on students, the proposed area-based inspection strategy fails to effectively target this market by concentrating instead on districts with a relatively low concentration of HMOs.

To take a cynical view this dichotomy in approach appears to be based more on minimising Housing Executive operational costs and workloads, rather than tackling need. We fail to understand why the Executive is proposing to concentrate on such a limited, general single person market and avoid student areas, particularly as the demand for student lettings is less seasonal than in the past (reflecting the adherence to 12 month leases by landlords). NUS-USI believes that it may be advantageous to target landlords with multiple properties in traditional student areas in order to enhance the impact of this proposed strategy. If financial problems are a difficulty for some landlords, we believe the Executive should provide tailored packages in the form of loans and waivers to address such considerations. NUS-USI is, therefore, not convinced that an area-based strategy will significantly raise standards in the HMO sector and urges the Committee to consider the risk-based approach to licensing as developed in Great Britain.

It is our view that the Committee should follow developments in England, Scotland and Wales and propose the introduction of a mandatory licensing scheme. The NIHE consultation paper on a voluntary licensing scheme fails to address why such a mandatory scheme should not be introduced. Why should Northern Ireland be out of step with developments elsewhere in the UK on this particular issue? This prevarication in proposing an effective, statutory licensing scheme will simply allow unscrupulous landlords to continue avoiding their responsibilities and will frustrate the promotion of better standards.

2.2 Legal Framework

NUS-USI welcomes the proposal to introduce more substantial powers though a broader definition of what constitutes an HMO and greater clarification of excepted properties and tenancies from action. We, nevertheless, disagree with the view of the Executive that the setting of standards is not considered at this stage to require intervention through legislation. We would have welcomed a full statement on how the Executive justifies its assertion that DOE guidelines and Executive standards have operated satisfactorily in the past, given the often appalling standards currently prevalent in the HMO sector.

NUS-USI welcomes the Government's proposals to place a duty on the person managing and/or the person having control to ensure that an HMO is licensed, and to place a duty on the responsible person(s) to ensure that any licensee so nominated should be provided with sufficient resources to carry out their duties properly. However, we believe that these duties need to be made clear to landlords, licensees and tenants so that disputes as to who is responsible for what do not arise. In our experience properties that are managed on behalf of landlords by management agents are often particularly worrying for students, especially in situations where the agent denies being the responsible person; tenants can feel caught between landlord and agent.

We are also concerned to ensure that when property is leased from a landlord who is also an organisation, it is made clear exactly who should be responsible for obtaining the licence. In addition, it should be made clear that no tenant or occupier, with the exception of a resident landlord, should be permitted to hold the licence. We are concerned that some unscrupulous landlords, who might be disqualified from holding a licence, would attempt to circumvent the regulations by using a tenant as a "frontperson".

We very much welcome the stated intention to devise a more precise definition of a house in multiple occupation. The case of Sheffield Vs Barnes - amongst other legal rulings - has created a completely unacceptable situation, especially where student shared houses are concerned. NUS-USI is aware of research findings which indicate that a large number of local authorities in Britain have been prevented from taking action to ensure improved standards in such accommodation because of a fear of legal action from landlords. This has resulted in a large number of properties occupied by students not receiving adequate safety protection. At the centre of the problem has been the blurred definition of an HMO, and NUS-USI believes that the only sensible way in which the Barnes V Sheffield implications can be resolved is through changing the definition, and to do so in a way that is as straight forward as possible and which leaves no room for ambiguity.

We believe the definition used for HMOs in Scotland would represent a vast improvement. Such a definition would certainly cover the majority of student houses, especially as it is not intended to adopt the part of the Scottish definition which stipulates that four or more residents need to be occupying a property before it can be defined as an HMO. However, we do have a concern that this definition of an HMO is too restrictive as it does not include properties consisting of two families. Although most students will share with larger numbers, it is not unknown for them to rent two person flats. We believe that these can have a similar level of risk as other properties because, even though there are fewer occupants, they may not necessarily live as one "family" (ie cooking and eating together). As such they should be subject to licensing. Whilst we appreciate that the Government's intention was to recognise current modes of living, especially the existence of same sex couples, we believe that a better definition to adopt might be the one suggested by Shelter: a house occupied by persons who are not members of the same family.

If the term "family" as outlined by the 1985 Housing Act was redefined in such a way as to take account of same sex couples, properties occupied by only a couple could be exempted. However, the term "family" is one, which can possibly lead to some confusion. NUS in Britain has had reports of landlords asking students to sign contracts which state that they promise to live as a "family", the intention behind which is to prevent the local authority from deeming the property to be in multiple occupation. Such acts contrived to evade regulations have to be prevented. One way of doing this, which will not necessitate having to find another phrase to describe the living arrangements of the tenants, is to permit occupiers to define for themselves whether or not they constitute a "family" group.

Although we argue that a risk-based approach to licensing is the most sensible way to progress, simply citing fire risk as a way to judge which types of properties should be included appears to us to be a little simplistic. Whilst houses which are smaller than three storeys and which consist of between four and six able-bodied occupants are clearly at less risk from fire than other types of properties, it should be borne in mind that other factors may be important. For example, in many student shared houses one is likely to find a vast array of electrical equipment (computers in each bedroom, a CD player/radio, etc) which may be very different from single occupancy homes. According to the Health and Safety Executive, portable electrical appliances are the cause of a quarter of reportable household accidents. This may be because of defects in the equipment itself, such as a broken or damaged flex, or through a lack of safety precautions within the property, ie insufficient sockets (which result in the over use of extension cables) or the non-existence of devices that will cut off the electricity if there is a leakage of current (such as RCDs). Another fear we have about proposed legislation on HMO standards and the designation of properties as high, medium and low risk is that local authorities will only concentrate upon the first two and never get around to the latter category. For this reason we would support self-certification of properties, and this is something we will comment further upon later in this response.

2.3 Better Standards

NUS-USI would strongly encourage an explicit proposal to place a duty of care on all HMO landlords, and whilst we accept the importance of not reducing the levels of such accommodation, we do worry about the standards of safety within such properties. The last edition of the NUS Accommodation Costs Survey suggested that although the majority of landlords were able to provide some evidence that they were in possession of a current gas safety check record. the same level of proof did not extend to areas such as fire and electrical safety or compliance with the Furniture and Furnishings (Fire Safety) Regulations. We are of the opinion that if such properties were brought within the scope of mandatory licensing then resident landlords in Northern Ireland would be more aware of precisely what they were responsible for, and would have to ensure that they could provide all relevant documentation to prove that their houses complied with minimum standards. In order to ensure that reputable landlords are not deterred from offering lodgings, the Executive could have the power to waive the licensing fee, particularly for landlords with multiple properties.

NUS-USI is disappointed that the Government has not decided to license the whole of the private rented sector. Whilst we accept that the process may have appeared to place an undue burden upon landlords, we feel that an opportunity has been lost to ensure that the whole of the housing stock conforms to some basic, minimum standards. We believe that a more ambitious timescale in relation to HMO activity should be proposed in order to effectively deal with the scale of the problems encountered in this sector. In our opinion additional finance should be requested by the Executive to establish a 3 year timetable to action HMOs. We welcome the need for strategic action as emphasised in the consultation paper and the need to carry out more regular management inspections for high risk properties.

2.4 Tenancy Management Standards

We believe that what is meant by acceptable standards should be clear to both landlords and tenants, especially as they relate to health and safety, so that all the parties know what will be required in order to meet these standards. The management standards adopted should, in our opinion, be broad based and draw upon those established both by reputable landlords and any local accreditation schemes. In particular we would like to see included within such a standard evidence of the way in which landlords conduct themselves with their tenants, especially in relation to potential harassment or acts of illegal eviction. NUS-USI is often informed of situations whereby students are threatened with eviction without the correct legal paperwork. We would hope that any management standards adopted could help deal with such situations.

In terms of fitness for licensing, our opinion is that a licence should either be refused or revoked if the licence holder is considered not to be a fit and proper person. The grounds for deciding upon such fitness should include: criminal offences (especially violence, manslaughter, housing benefit fraud or convictions for breaches of housing or health and safety legislation); revocation of a licence for other premises; and repeated failure to comply with notices served under the licensing scheme. Additionally it should be stated that deliberate inaccuracies during the self-certification process should be regarded as making a person unfit. Action should also be taken to make sure that landlords who have repeatedly failed to comply with notices served, etc, are not able to simply pass on their business to a relative without some clear indication that the new owner is themselves a fit and proper person and intends to make good any outstanding notices.

NUS-USI is not opposed to the idea of some self-certification arrangement. However, we would be concerned about landlords using self-certification as a means of finding a way around complying with any of the standards that are eventually agreed; as such we would want the Executive to have the option to undertake spot checks. We welcome the inclusion of references to the right of neighbouring residents to enjoy peaceful occupation of their homes but query how landlords will be able to ensure such conduct from their tenants. The establishment of a landlord/tenant mediation/arbitration scheme to deal with such incidents should be examined.

2.5 Inspection

As highlighted earlier, with the exception of gas safety check records, few landlords seem to be able to provide relevant documentation to indicate how safe their properties are. Such oversights are not simply restricted to landlords with lodgers. The last edition of the NUS Accommodation Costs Survey also showed that private landlords who advertise their properties to students via university or college noticeboards are also less likely to prove that their furniture and furnishings comply with regulations. Even in relation to evidence of a current gas safety check we are concerned that self-certification on its own might not be reliable. The last recorded student death from carbon monoxide poisoning occurred in a property in which the landlord had falsely claimed to have been in possession of a valid gas safety certificate.

We would therefore want to ensure that all properties eligible for licensing be inspected beforehand or, in situations where a property was deemed to be at low risk, that the Executive insist upon seeing all relevant safety certification first. They should be highly prescriptive about what they will require from landlords and validity should be checked, rather than simply taking a landlord's word that the documentation is in order.

2.6 Enforcement

NUS-USI would be in favour of giving courts the power to impose a blanket disqualification in certain circumstances, especially following a conviction for manslaughter or causing a fatal injury to a tenant. In cases where licence holders are found to be in breech of certain minor standards, a "three strikes and out" position is one possible way of ensuring that landlords are given the time to make improvements; they may also be less likely to withdraw their properties from the market. This might require providing the Executive with discretionary powers to decide upon exactly what would constitute a minor breech, and any criteria would need to be transparent.

NUS-USI believes that in relation to penalties for breaches, a number of options could be explored. On-the-spot fines might prove a deterrent (so long as the costs were not passed on directly to the tenants), as would fines for each subsequent occasion that the property fails. The amounts payable could increase in proportion to the rental income of the landlord (and not simply the property that was faulty), and as licensing would make it obvious which landlords were the "large players" in an area, such calculations would not be difficult. It would also mean that landlords with a small number of properties would not be unduly penalised, unless of course they failed to respond under the three strikes rule.

One of our concerns in relation to the way in which action is taken against landlords who do not meet the required standards is that this could lead to tenants being made homeless. Given that it is likely to be the tenants who are the ones who will have some responsibility for identifying and reporting any breaches of the licensing conditions, they will need to be protected from eviction and harassment. Although the issue of security of tenure clearly falls beyond the remit of this consultation document, we would want some assurances that the Government will take such concerns on-board for inclusion in any future housing legislation.

Finally, NUS-USI would very much welcome the idea to permit alternative management arrangements. This could help ensure that the stock of private rented sector properties does not diminish but is, instead, taken over either by a responsible landlord or through some partnership between the Executive and a residential social landlord (RSL). This could include universities or Housing Associations.

2.7 Service Delivery

NUS-USI would request clarification and caution care when it comes to the length of time that a licence is valid. Whilst some newly built property might not require inspection for a period of 5 years, other types might need to be visited on a yearly basis.

University owned and managed accommodation could be required to provide evidence that it remains compliant with licensing standards, and this might best be achieved through self-certification. However, NUS-USI would want to have some guarantees that the "evidence" being submitted by educational institutions was being checked for accuracy. One way to ensure this would be for the Executive to undertake an inspection of this accommodation prior to re-issuing of a licence. We do not envisage that this should be an especially time-consuming process (the documentation that has been submitted should provide a clear guide to the inspectors), but there should be a regular cycle for inspection as well as powers to make spot-checks. NUS-USI believes that should such safe guards be implemented, then university owned and managed accommodation could be licensed every 3 years - depending upon the age of the buildings.

Private sector rented houses, and those managed as part of a head lease scheme, will need to be risk-assessed and - where more than fifty per cent of the tenants have changed from when the license was first awarded - the owner or licensee should have to reapply. Once again the process could be simplified through the use of self-certification, although the Executive should be given the power to inspect, especially where the tenants have concerns about the safety levels.

2.8 Safety

With regard to fire safety legislation as it relates to HMO licensing, NUS-USI believes that whilst it would be valuable if fire authorities could play a role, the first point of contact for all premises that are to be licensed should be the Executive. It is they who should determine the levels of fire safety. The Fire Authority could give a helping hand by inspecting all premises before recommending provisions for licensing.

In terms of gas safety we believe very strongly that not only should licenses be linked to the ability to produce written evidence of a gas safety check, but landlords or their licensees should also have to continue to abide by the current gas safety regulations and undertake such a check on an annual basis, not just each time the licence is renewed.

In addition to the other legislation we believe should be brought into line with licensing, the Government should make compliance with the Furniture and Furnishings (Fire Safety) Regulations a requirement before granting a licence. As the Entec research so clearly highlighted, old foam filled furniture is very dangerous, and NUS-USI is acutely aware that private landlords and universities do not always comply with these regulations. Because of the Barns' judgement many local authorities seem to have been reluctant to take action in relation to old furnishings. Hopefully licensing, coupled with the change in the definition of HMOs, will make this less of a problem for the Executive.

Electrical safety is one other area, which should be given consideration within licensing. As was mentioned in the section dealing with lodgings, one of the biggest causes of household accidents are portable electrical appliances, and yet there are no clear requirements as to how often testing should occur. Through the licensing process it will be possible to prescribe this, although account should be taken of the risk levels posed by the property.

2.9 Other Issues

NUS-USI shared the implicit concern expressed in the Executive's consultation document that some small-scale landlords might withdraw their properties from the market if the costs of the licensing scheme are only to be paid for from their pockets. We, therefore, welcome the proposal of the Executive not to charge a fee for the administrative costs of the proposed licensing scheme.

In terms of relationships with landlords, we proposed that a HMO Tenants forum should be established and training and support should be delivered by the Executive to, for example, students' union welfare officers and other tenants representatives. Tenant and consumer groups, such as students' unions, should, in our opinion, also have formal access to publicising and making available the contents of the register of HMOs. In addition we see no reason why a tenants representative should not be included on the review panel along with Executive and landlord representatives to examine cases for appeal.

3. Conclusions

NUS-USI believes that this review of housing in Northern Ireland is opportune and hopes that this submission alongside our views on the regulation of the private rented sector can be taken on board by the committee.

A Submission to the Social Development Committee on
Houses in Multiple Occupation(HMO)

Introduction

The National Union of Students UK/Union of Students in Ireland (NUS/USI) welcomes this opportunity to submit evidence to this inquiry which will largely focus on the regulation of the Private Rented Sector.

As the representative body for students in Further and Higher Education in Northern Ireland, we hope that the views and comments contained in this response will be accorded due consideration by the Committee with an opportunity afforded to present oral evidence in support of this submission.

As an organisation that has considerable experience in housing case-work and useful working relationships with educational institutions, the Northern Ireland Housing Executive and Housing Associations, most notably the Students Housing Association Co-operative, NUS-USI has canvassed the views of students and Students' Unions in framing this response.

Overview

In this submission, we wish to place in context a wider overview of the student housing market. The challenge facing this inquiry, in our view, is to develop a housing strategy that is relevant and achievable in delivering the right of a decent, affordable, secure place to live for all members of the community in Northern Ireland. Homes should be available upon the basis of need, not upon the basis of status, income or for profit motives.

Given the recent consultation exercise announced by the Housing Executive on Houses in Multiple Occupation, we have enclosed a separate submission on this issue for the Committee's consideration.

Background

The basis of NUS-USI policy on student housing is that students form part of society: correspondingly student housing needs cannot be seen as distinct from or of a higher (or lower) priority than those of all young, single people or, indeed of the population as a whole. Student accommodation is not, therefore, an academic issue, neither is it the ultimate responsibility of educational authorities. Student housing must instead be a constituent part of any regional policy in respect of the housing of young people and single people in Northern Ireland.

Traditionally the Northern Ireland Housing Executive has not given much attention to single people, particularly students, because they are largely a young, transient population: similarly most education authorities and institutions have never seen it as their role to provide housing for all or even a majority of their students.

Single people of working age are no longer a tiny minority of the population, but now account for nearly one in three (28%) of the population in Northern Ireland, up from 19% in 1981 (NISRA, Family Expenditure Survey 1997-1998). Single people are not a minority which is homogeneous or special; 'Singleness' can be a temporary or permanent status; most people have been (or will be) on their own at some point in their lives.

Single people are naturally predominantly young. There is no doubt that very many more would prefer a home of their own but are forced by the 'realities of the market place' to share their accommodation, usually the parental home.

The young and mobile form a growing but unrecognised housing need, be they young workers, trainees, apprentices or students. This need has been largely ignored and the community still does not acknowledge that they have equal rights and other households to good standard permanent accommodation.

The vast majority does not qualify for public housing nor will they be able to afford to buy their own homes. The vast majority of the region's housing - the owner-occupied and public sectors - is beyond the reach of most young people. The Housing Executive gives priority to families with children and the elderly whilst first time buyers have a much better chance of a mortgage if they have two incomes. The stock of private rented accommodation remains in large part their only refuge. A significant proportion of the housing is squalid, overcrowded or expensive; often it is all three.

Not all young people are single: neither are all students single with 8% of the total undergraduate population in Northern Ireland are mature students often with dependants (NIHEC 2001). And that scourge and bane of demographers everywhere, the extent of co-habitation, as well as of the existence of lesbian and gay couples, is never revealed in official statistics, and so cannot be planned for. Few young single people show up in the statistics as one-person households for the simple reason that there isn't stock of single person dwellings for them to occupy even if they could afford them.

The effect of this disparity of housing need and the imbalance in the housing stock is intensified because it is concentrated in particular areas. The young and mobile migrate to urban areas in search of employment, or for training and education. What little research there has been reveals a depressing picture of young people forced to group together to afford private rented accommodation designed for family use or else becoming homeless.

Housing the Young and Mobile

The starting point for any new policy must be an assessment of the needs and aspirations of young people themselves. It must enable them to have more control over their own lives, collectively and individually, and reduce their dependency on adults. We outline below the minimum physical and social housing needs of the young and mobile.

Physical

Cheapness Young people are predominantly at the lowest end of their income potential, or on a student loan or training allowance, or in unemployed.

Mobility Young people are highly mobile and thus fulfil a vital function in the workforce or leave home to go to college or enter training.

Amenities As a consequence of their low income, mobility and lifestyle young people need certain amenities. For example, few have a set of furniture to transport around with them. They thus need at least partially furnished accommodation, clothes-washing facilities, good public transport, late shopping hours etc.

Social

Privacy The need for privacy when required is not, of course, peculiar to the young and mobile. But this need is frequently ignored or else confused and the isolation often experienced in a completely self-contained single-person dwelling.

Sociability The need here is a facility for easy and natural social interaction at varying levels of intimacy, both within their own group and, importantly, with those outside; but not the artificial, introverted and enforced socialisation of a traditional hostel or hall of residence. The levels of intimacy may be quantified roughly as:

(i) family sized 4 to 10 persons

(ii) immediate neighbourhood sized 40-50 persons

(iii) neighbourhood area sized upper limit around 500 persons

Control Young people should have the ability to control their own lifestyles as any person over the age of majority expects. This is not to be confused with independence. Indeed the three social needs taken together call for an interdependence.

There are, in theory at least several methods of meeting these needs; through institutions; privately rented housing, housing for owner occupation; public authority housing, and voluntary housing. Most, in reality, represent "traditional non-solutions" to housing of young people.

It is clear that the inadequacy of the response to the housing needs of the young and mobile is largely because our policy-makers and institutions, public and private, are still geared to an outmoded social and household structure. In a sense, the needs of young people are a mirror reflecting Northern Ireland's inability to organise, plan for, and cope with major economic and social change. The essential problem is not now a recognition of these factors but of how to create a political will to alter out-dated assumptions and practices. In short, a 'paradigm shift' is called for in society's treatment of the young.

Government Policies

Governments since the mid-1970s have adopted social policies which have placed an increasing emphasis on reducing public expenditure. Under both labour and conservative administrations housing has borne the brunt of these cuts. In no other sector are the links between social objectives - building and improving more homes to meet needs - and employment objectives - the creation of jobs in productive industry - clearer.

Research shows that an expansion of construction and related activity would help avert a crisis in the housing stock, provide homes for those without them, reduce unemployment and retain capacity in the building industry without adverse economic consequences. Like extra public expenditure would be required because the construction industry is labour intensive and employs 30% more people than any other branch of the economy with equivalent output: has no substantial inflationary bottlenecks; and consumes few imports (thus there is little risk to the balance of payments).

It must be recognised that the opportunities to improve the housing conditions of students, young people and others have been severely limited by successive government's policies.

Local authorities are now virtually only able to build for people with special needs - the elderly and the disabled, have to sell off their best stock through the 'right to buy' and the new subsidy system has increased rents by well over 100% since early 1979.

Single people are suffering more than most other households from these policies because local authorities are forced to give priority to families (often involving the reduction of provision for the single) in the allocation of their shrinking housing stock, and because many single people have to live in the private rented sector.

Where Students Live

Students live in a wide variety of types of accommodation: in college halls of residence, private rented housing; their own or more often their parents' home: and a small number in public housing and housing association properties.

Generally speaking the universities and the colleges of education are able to provide their students with a small proportion of institutional accommodation (eg approximately 2000 places in Queens University and University of Ulster).

A large number of students live in their parental (or very rarely their own) home, particularly students in Belfast. In England and Wales, just over 10% of university students live at home, in Scotland 33%, in Northern Ireland 40%.

The vast majority of the remainder live in private rented accommodation. It has been estimated that some 11,000 students seek accommodation in this sector in NI (General Consumer Council 1996). A declining proportion of these live in lodgings or digs (with all or some meals provided) but most live in shared, furnished flats or houses and cook their own meals. Very few students are housed by the Housing Executive or housing associations.

The student housing problem consists of three inter-related aspects. There is a general shortage of the type of housing required by students - that is decent housing to rent - a problem which is particularly acute in urban areas. Consequently the cost of housing is high; and especially so in relation to the level of the student loan. The shortage of suitable accommodation means that students are often the victims of private landlords who are prepared to ignore the law or to exploit loopholes in the legislation, because they are aware that students are a transitory group in urgent need of accommodation at particular time of the year.

The number of full-time higher education students has trebled in little more than 20 years but this massive expansion has not been paralleled by the provision of purpose-built accommodation. This shortfall has not been met by the public sector. Each autumn the shortage of rented accommodation is revealed starkly by the annual student housing crisis. Thousands of students arrive for the start of the new academic year with nowhere to live. Many either give up and return home or spend weeks in cramped conditions (ie sharing single rooms) or in unsuitable temporary accommodation.

Housing Costs

The cost of their accommodation is the largest single item of expenditure borne by students. The cost of housing in relation to the value of the student loan has increased dramatically in recent years. The cumulative effects of this trend has been to create financial hardship for many students, particularly for those living in halls of residence, to reduce the demand for hall places and consequently to increase the pressure on local housing markets. The extra pressure for rented housing has forced many students to live in sub-standard multi-occupied premises and has prevented some from finding any accommodation at all.

Further Education students, who depend on small discretionary awards (if they receive any award at all), are largely forced to live in the parental home even though conditions are often unsuitable for study because of the high cost of independent housing. The possibility of developing an independent life-style is thus severely restricted for many young people.

The loss of Housing Benefit for the majority of students has further increased student poverty as college funds have failed to provide adequate compensation. Students living in private rented housing frequently have landlords who are more interested in maximising their income than the welfare of their tenants and who are simply indifferent to or prepared to evade or avoid the law. Many students pay exorbitant rents, have little security and their accommodation is often unsafe and unhealthy.

Institutional Accommodation

Universities used to be supplied with 100% grants for building student halls of residence, but this was replaced by a grossly inadequate 'loan-financed system' whose structure was revised five times in six years. However, by 1980, the programme of construction was abruptly curtailed. A University Grants Committee report stated 'the latest reductions in public expenditure caused all residence projects to be dropped for the foreseeable future'.

An institutional solution cannot meet the social needs of students, and traditional halls accommodation is frequently unpopular with students, is socially divisive, inefficient and often unduly expensive. Although the provision of institutional accommodation does give students an advantage over other young people, the stagnation of this sector is a clear reflection of the unwillingness of the authorities to take student housing seriously and has undoubtedly increased the pressure on local housing markets. NUS-USI believes that purpose-built institutional accommodation should not be provided in areas of housing stress where alternative solutions are not possible.

We also have the ludicrous spectacle in virtually every housing stress area of the different sectors of tertiary education each independently seeking and competing to accommodate their own students using different and sometimes contradictory methods, each unrelated to mainstream housing.

Head Tenancy Schemes

A quasi-alternative to halls of residence are 'Head Tenancy' schemes. Under these schemes colleges lease property from landlords (either private or public) and then sub-let the accommodation to groups of students. The college acts as landlord to the students and, at the same time, is the tenant of the owner; thus it is the 'head tenant'.

There are now a significant number of colleges operating head tenancy schemes - over 25 universities and a dozen or so public sector colleges. Apart from guaranteeing the landlord vacant possession, the head tenant (ie the college) usually guarantees rent, takes on all administration and rent collection costs, vets prospective student tenants and looks after the condition of the property. No wonder many landlords jump at the opportunity of letting their accommodation to a college. In return, the college obtains an increased pool of private rented housing for the exclusive use of its students.

This clearly presents NUS-USI and Students' Unions with a considerable dilemma. Students need a roof over their heads but, like all other private tenants, they also need safeguards over their security and rent level. Neither should students seek a privileged position in the housing market. There is some evidence to show that the growth of head tenancies has reduced the supply of rented housing for non-students in Great Britain.

NUS-USI is very concerned about the implications of head tenancy scheme, and suggests the following guidelines for good practice. Such schemes should only aim to bring new property into letting and not at the transfer of existing rented property.

Head tenancy rents should be set as low as possible and perhaps linked to typical 'fair' rents in the locality. The possibility that the letting between college and landlord could be a fully protected tenancy has not been entirely ruled out by legal judgement (St Catherine's College v Dorling, Court of Appeal, 25 May 1979), nor has it yet been determined whether the agreement between college and student is a restricted contract, although a case in Manchester went in favour of the students.

Administrative costs should be no more than 10% of the rent and any operating surplus should be returned to students.

The accommodation provided should confirm to acceptable standards of amenities, repairs and space.

A tenants' association of head tenancy scheme residents should be set up with funding and assistance from the college and Students' Unions.

Since lettings to educational institutions are excluded from the landlord's repairing obligations in short leases it would be prudent if all agreements between college and owner included covenant to repair by the landlord.

The Decay of Private Landlordism

The private rented housing sector has been declining for many years, from approximately 38,000 properties in 1981 to less than 20,000 in 1994 or 3% of the total housing stock in Northern Ireland. Attempts to revive the sector have not proved successful.

Despite this, the private rented sector is where a majority of students continue to find themselves somewhere to live. It is well known that conditions in the private rented sector are much worse than in the other two main tenures - owner-occupation and public housing. Nearly 30% of private rented dwellings have been characterised as unfit; three times the level of unfitness in owner occupied dwellings.

Private rented housing is very diversified, encompassing furnished and unfurnished flats and houses, shared housing, bed and breakfasts, hostels and tied accommodation. Both landlords and occupants present a varied profile; the former range from an owner-occupier with a lodger to companies with hundreds of properties; the latter range from the young, single and mobile, young couples and families to a large number of elderly long-term occupiers.

Decline and Fall

Because of the shrinking number of lettings available and their economic exposure many occupants are being subjected to high levels of exploitation and are experiencing great hardship as landlords are avoiding legislative controls and demanding excessive rents.

The long-term trend away from private rental, a combination of both supply and demand factors, has been chiefly a result of the attractions (material and ideological) of owner-occupation and the slum clearance programmes of the 1950s and 1960s. Rent control is frequently blamed (or praised) for reducing the supply of private rented housing but there is not much hard evidence to support this contention. In an effort to breathe life into rented housing basically by altering the balance between landlord and tenant, does not seem to have had an appreciable result one way of the other.

A fundamental principle of any housing policy is to provide decent homes within the means of their occupiers. It is impossible to meet this objective with private landlordism, a tenure which has outlived its usefulness. It belongs to a laizzez-faire tradition which is incapable of providing decent housing for those who need it. The interests of private landlords and their tenants are irreconcilable.

It is also clear that the arsenal of statutory protection for private tenants - not only through the Rent Orders but also through public health and housing legislation - has failed to shield them from lack of security, the worst housing conditions, illegal premiums, uncontrolled rents, harassment and arbitrary evictions.

A revival of supply, even of this was desirable, would require the removal or reduction of the existing controls and/or financial incentives to landlords. But to subsidise private landlords with public money would clearly be wasteful - funds would be better spent on investment in housing.

Whatever the merits or otherwise of the decline of the private rented sector, because the existing alternatives fail to meet demand, it will continue to house a substantial proportion of students for many years to come. Therefore, most students looking for somewhere to live outside college accommodation have to rely on renting a home from a private landlord.

Public Sector Housing: Towards Residualism?

Public housing is presently a very restricted tenure for students and young, single people. Most is allocated to families, people with children or to those over retirement age. Some councils have been trying to improve this situation, for example, by letting unpopular high-rise flats to single people, but the pressure of long waiting lists and cuts in expenditure on housing have limited many of these efforts.

There is an urgent demand from single people and couples without children for reasonably priced and secure housing. The number of one-person households is growing rapidly at a time when the supply of housing in the private sector, the traditional refuse for single people, is dwindling.

The exclusion of single people of working age from NIHE accommodation remains imprinted from waiting list points to a building cost yardstick. A true picture of single people's housing needs has therefore not emerged. NUS-USI believes that the Housing Executive should develop a comprehensive strategy and practical policies for meeting the housing needs of single people, whether they are employed or unemployed, students or trainees etc. The cornerstone of such a programme should be the recognition that single people have an equal right to housing alongside families and the elderly. It should include policies to redress the traditional bias against single people in the housing market and in the allocation process.

There is a major obstacle to significant improvements in attitudes and practices towards the single - the Government. Clearly the Government's housing policy, dominated by its economic strategy and an obsession with home ownership, will not at present permit the Executive to do very much, even if they were persuaded or inclined to do so. Fewer new homes are being built and the condition of the existing stock is deteriorating. The best public housing is being sold off. Some people now argue that Northern Ireland's public housing is well on the road to becoming a residualised, 'Poor Law' sector, of ghettoised estates for the very poor and disadvantaged.

In the late 1960s officialdom did urge local authorities to help a particular category of students for whom no institutional provision was made - married post-graduates. The Cullingworth Report in 1969 recommended that local authorities should "assist in the provision of suitable accommodation, particularly for married postgraduates, who should be eligible for the allocation of council houses". The advice was widely ignored.

Later an extensive review of housing policy concluded in 1977, argued that local authorities should ensure that adequate accommodation for single people is included in their general investment provision and accepted that "where the presence of students adds to housing pressure, local authorities and housing associations may receive subsidy or grant for providing accommodation for single people which is to be let primarily to students". Little has been done.

It has to be recognised that the Housing Executive is facing severe difficulties in meeting even their existing statutory obligations as a result of the cuts in housing investment programmes and Government restrictions on revenue spending. But lack of resources cannot be an acceptable justification for failing to assess the current needs of single people locally, to ensure that such housing as is provided for single people is appropriate, to remove any unfair limitations or biases in allocation policies and to use their various housing powers in a comprehensive way.

The most common type of housing made available to single people prepared to share are often difficult-to-let dwellings or on unpopular estates. The other main type is 'short-life' property. Short-life housing is simply the temporary use of houses on licence, sometimes involving intermediate repair work, before a house is renovated, converted or demolished.

Specific issues affect students seeking NIHE accommodation.

Furniture

A major difficulty is that most Housing Executive dwellings are let unfurnished.

Students, who are both highly mobile and on low incomes, generally do not need the burden of either having to purchase furniture or moving it about the country.

The best solution would be for the Executive to let some of their property furnished but an alternative at present would be for groups of students to buy furniture (new or second-hand) and sell all (or most of it) to the incoming tenants when they eventually leave the accommodation.

Access

There are three chief methods by which students could gain access to public housing.

The Executive can let directly to students.

The Executive can lease property to a college, which then sub-lets the accommodation to its students. Sometimes the intermediary is a local housing association.

Short life property can be made available either through a short-life housing association (many of which are co-operatives) or another agency.

Direct Letting

Direct letting is the process used for the allocation of most council housing. The merit of this method for students is that they are not given a special, privileged status above other applicants. The major difficulty under current practice is that students and other young single people have a very low priority as individuals on general waiting lists.

Many councils operate special allocation schemes for people registered on the waiting list but which ignore the points scheme. Such schemes, if they exist, usually form a small proportion of the total allocation from the waiting list, but they have a much greater importance for single people than other households. In some cases, these schemes may ignore the normal eligibility requirements, through the practice of setting aside a certain number of flats each year for a particular group of people which the council wishes to house. The schemes are often known as 'quotas'. A few councils have quotas for students at colleges in their area; for example, in Manchester, Newcastle, Nottingham and Sheffield.

Very often the flats allocated through special schemes or quotas are the less popular of a council's stock. Manchester City Council's scheme houses about 1200 students in 'difficult-to-let' deck-access flats in Moss Side and Hulme. But some of Sheffield's housing is purpose-built for single people and students. Such schemes are generally aimed at groups of students who are willing to share.

Local Authority Head Tenancy Schemes

Some councils make their surplus accommodation available to students, via the college which acts as the landlord. The chief advantage for the council with this type of arrangement is that it can also devolve management of the property to the college which will become responsible for allocation, rent collection, maintenance and repairs and so on.

Disadvantages of head tenancy schemes include the threat of academic sanctions and students will always have to vacate the accommodation either at the end of the year or their course, which may not necessarily be the case with direct letting by the council. It also frequently gives students at a particular college access to accommodation denied to other students in the area and over other single people who may be in more immediate need. Rents are often higher with this kind of scheme because the accommodation will probably be outside the local authority 'rent pool' and the college will have its own administrative costs.

In practice, local authorities sub-let in a way that is indistinguishable from a hall of residence and often in accommodation which is far inferior. Schemes like this operate in Leeds, Liverpool, Salford and Tower Hamlets in London.

A variation of this type of scheme is that a housing association is chosen to be the head tenant rather than a college; there are examples of such schemes in Leeds and London.

Short-Life Housing

There is increasing pressure on local authorities to use vacant property as a source of temporary accommodation, especially for people who would not otherwise qualify for council housing. Often these properties are empty because they are going to be repaired, modernised or demolished in the near (or far) future.

Short life housing is normally made available through short life housing groups (which are often co-operatives) or sometimes a housing association. Councils pass on responsibility for their short life properties to these groups who then let them.

Housing Associations and Co-operatives

The bewildering array of housing associations, trusts, societies and co-operatives has been collectively referred to by successive governments as the 'third arm' of housing provision in the UK. This is nonsense: the voluntary housing movement remains minuscule representing a small proportion of the total housing stock.

The voluntary movement in housing has been largely dependent on government sources for finance but has been able, so far, to weather the cutbacks in public expenditure on housing much better than have local authorities. In the main they house the same groups of people as do local authorities and speculative builders for owner-occupation.

As long ago as 1976, the then Minister for Housing and Construction stated that ".further initiatives need to be taken on single person (including students) housing as part of general housing policies and programmes for which my Department, local authorities and the Housing Corporation are responsible." He continued ".in the areas where student demand seriously impinges on the general housing market, particularly in areas of stress and pressure, housing schemes which in practice would be mainly occupied by students will be eligible for subsidy or grant, provided that they contribute directly or indirectly to meeting the general housing needs of the area". But little has been done to make this encouraging statement a reality, for both local authority provision and housing associations.

Most housing associations allocate tenancies on the basis of housing need, like local authorities and thus for similar reasons students tend to be very low on the list of priorities. Many associations also provide accommodation for people with what are called 'special needs'. The most frequent special needs are housing for the elderly, the disabled and the single. Examples of other special needs include "recovered alcoholics"; "senior indigent Christian Scientists", single parents and "stable lads and stud hands!".

A number of housing associations do make special provision for students, indeed some were specifically set up for this purpose. A few associations specifically help overseas students, and often their families: London, Birmingham, Leeds, Reading, Oxford, Brighton and Edinburgh have such associations.

Student individual applications to associations which provide housing for general letting are generally unlikely to be successful. A significant proportion of these kinds of lettings are provided for people on the local authority waiting list. Associations which cater specifically for the single or students will be more accessible but nomination arrangements are usually via the college accommodation office or the association itself, according to some criteria of need. This may be for married students, postgraduates, students with children or from overseas. Some associations and many co-operatives make short-life property available to students and young, single-people.

Housing co-operatives, which nationally have about 10,000 members, only house their own members. Many now have long waiting lists or are not accepting new members. Co-ops are part of a long tradition of consumer and producer organisations formed and run along co-operative principles dating back to the Rochdale Pioneers. A housing co-operative is not necessarily the best solution to the shortage of student accommodation because it is not only committed to meeting a housing need but to running itself along principles which can demand considerable time, commitment, participation and enthusiasm from its members.

Although the voluntary housing movement is small, it does have rather greater potential for students than the other tenures. Housing associations are generally small and flexible; management is often more sensitive and personal than that of local authorities. Several students' Unions have, in the past, been closely involved in setting up new associations or promoting schemes to help meet the housing needs of their members. There are examples of these in Oxford, Leicester, London, Cambridge and Southampton. But because officialdom now feels that the development of new associations has reached saturation point, it might be easier to work in partnership with an existing association. New associations are now only likely to receive public funding if they can demonstrate that an existing need is not being met and student-only schemes are very unlikely to receive loan sanction.

One successfully established housing association with significant student involvement is the Students Housing Association Co-op Ltd (SHAC) in Northern Ireland. It was set up in 1977 at the instigation of our organisation with the aim of providing accommodation for young mobile people, particularly students. The shareholders are the Students' Unions of the region.

NUS-USI is concerned that the further reduction of Housing Association grants will significantly impact on young people and students on low incomes and inhibit the future development of SHAC and other Associations. Unfortunately higher rents will displace students from Housing Association accommodation limiting this important housing option.

Home Ownership: Good News for Students?

Some students are interested in buying a home of their own as an alternative to renting one. But the vast majority of students will not find it practical to buy a house or flat, owning to their low income whilst on a grant; lack of capital; uncertain future income and to the fact that the private market is geared to permanence rather than transience.

Home ownership can restrict mobility, it can take anything up to six months to complete a purchase, and professional fees (for surveys, valuations, conveyancing) add considerably to the cost. Unless students have access to a source of income outside the student loan and to a capital sum, which is usually required to finance the purchase and provide the deposit, they will find it impossible to buy a home.

The Committee should be aware that home ownership is neither within the means of nor practical for most students. Government housing policy is concentrated almost entirely on encouraging the expansion of owner occupation, ignoring the interests of those who either have to or prefer to rent.

Students' Rights as Private Tenants

Housing law, the generic phrase used to describe the mass of both public law and common law relating to the regulation of housing - be it public or private sector, rented or owner occupied, is renowned for its complexity. The maze of statute law created by Parliament on housing this century has done little to make the legal framework more effective; it remains incomprehensible to most tenants and many lawyers and lay advisers; a mystifying accumulation of different legislative regimes uneasily grafted onto old common law distinctions. It is an uncertain guide to rights and responsibilities on one hand and a welcome resource for landlords seeking to evade its operation on the other.

It is clearly of immense importance that students are aware of and able to exercise their rights whatever their housing circumstances - whether occupying college accommodation, or as private tenants or local authority tenants.

Housing Status

The starting point in any housing matter is the determination of the status of the occupier. The question of legal status is crucial for a person wishing to determine what rights they have in a host of related fields - security from eviction, rent regulation, help with housing costs, repairs and improvements and redress in case of harassment or illegal eviction.

Unfortunately under the present system there is a plethora of residential categories, which only take account of common sense distinctions. Between trespasser and owner, an occupier may fall into any of these main categories: protected tenant, tenant with restricted security and unprotected tenant. In addition there are many sub-divisions (eg flat sharers) which affect rights and procedures in different situations. This complexity stems partly from the variety of situations it is seeking to regulate.

Ssecurity of Tenure

Someone's rights of occupation, usually known as security of tenure, largely derives from their housing status. Tenants, who are fully protected by the Rent Order, enjoy security of tenure and their landlord must be able to prove being able to evict them legally.

It was not the purpose of Parliament to discourage the owner-occupier from letting out rooms in her/his own home, and it was therefore arranged that tenants with resident landlords should not be fully protected but have restricted protection with less security from eviction.

Some residential occupiers will have only very limited protection. Typical examples are student lets by educational institutions and lodgers. But most residential occupiers have a basic right to remain in their home until their landlord has obtained a possession order from a court. The law also gives protection by implying obligations on both parties to an agreement or contract and provides remedies (at civil law) for breach of contract.

Harrassment and Unlawful Eviction

It is criminal offence to deprive any residential occupier of lawful occupation of her/his residence; or to interfere with the 'peace and comfort' of the occupier or members of her/his household or to withdraw or withhold services reasonably required for the occupation of the premises as a home, with the intention of making the occupier leave or refrain from exercising her/his rights on the dwelling. For example, if the landlord cuts off the electricity deliberately, this is clearly harassment.

It is also an offence to evict a tenant without a court order. In cases of illegal eviction, a tenant can take direct action to reinstate her/himself, or s/he can seek remedy through the courts, including both reinstatement and damages.

Unfortunately prosecution against harassment and illegal eviction is rare and seldom results in serious punishment. Harassment can be extremely subtle and difficult to prove and the tenant often looks for assistance after an eviction has taken place.

Some local authorities take an active role in cases of harassment and illegal eviction, and may employ a Tenancy Relations Officer to advise tenants and to conciliate or take action against the landlord. Certainly this is an area which the Housing Executive and District Councils could usefully explore.

Housing Conditions

The law relating to repairs and housing conditions is a jungle. There are practical difficulties in enforcing tenants' rights because the seriousness of defects is often a matter of judgement. Some of the procedures can be protracted and a student may well not see the results of a successful action.

There are three chief reasons why more tenants do not force their landlords to repair or improve their homes. Firstly many people are ignorant of the law and what it can do for them; secondly it can be time-consuming and troublesome to get the law enforced and thirdly many tenants who are not protected under the Rent Order may be evicted by their landlord rather than carry out the repairs.

Conclusion

We propose that further incentives should be provided to promote the work of Housing Associations and the Housing Executive and that a larger new build programme should be established. The Executive should intervene more in the private sector, particularly through vesting orders for empty property and the provision of short life, direct letting and head tenancy schemes which have been successfully developed by local authorities in Great Britain. We believe it is unlikely that Housing Associations will be able to meet the needs of low income singles if the rate of grant is further reduced and that the private rented sector will continue to decline irrespective of any Government initiative.

The need, therefore remains for the Housing Executive, in conjunction with the Department of Social Development, together with other interested agencies to establish and implement a specific social housing policy for young, single people in Northern Ireland. NUS-USI hopes that the Committee will grasp this opportunity of properly addressing the needs of this important but neglected section of our community.

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Written Submission by:
DISABILITY ACTION

27 March 2001

Thank you for your correspondence of 15th February 2001 regarding proposals for a new Housing Bill for Northern Ireland and the proposals in relation to private Sector Renewal, Houses in Multiple Occupancy, and the Regulation of the Private Sector in particular.

The availability of accessible housing is of particular concern to disabled people. While soon to be introduced changes to the Building Regulations (Part R) will impact in terms of more "visitable" housing in the future, the reality of the situation for many disabled people is that the majority of the housing stock cannot meet their needs.

The availability of accessible housing stock within the public housing sector is extremely limited, availability within the private rented sector is near to non-existent. Therefore the choices available to a disabled person in the housing market are very limited.

The extended Building Regulations will go some way toward creating a future housing environment where disabled people can visit friends and family, but even this updated standard will require considerable adaptation in order to be "habitable" to a disabled person.

Grant aid also currently exists to assist with the adaptation of existing dwellings to better suit the needs of a disabled person. However the system is backlogged and a disabled person can expect to wait at least 18 months for their application to be processed. Not only does this waiting period inconvenience the disabled person but also the cost of the works is likely to have increased over that period. Further to this the amount of grant aid, which is means-tested rarely meets the cost of the job and builders who are willing to undertake the works are difficult to find.

No financial assistance is available to enable a disabled person to build a house, which suits their needs, though grant aid would be available to adapt a new built property. Financial assistance is not available to a disabled person renting a property in the private sector to adapt the dwelling, nor is there any requirement on the landlord to undertake an adjustment to meet that individual's need. The Disability Discrimination Act is unlikely to address this situation.

Research undertaken by the Council for the Homeless (Gateways and Gatekeepers: 2000), identified a lack in demand for temporary accessible accommodation for disabled people. Statistics in relation to the prevalence of disability do not support a theory that there are no disabled homeless people. Disability Action suspect that the under-representation of disabled people amongst those seeking hostel accommodation is more likely to be the result of the lack of accessible temporary accommodation, and a realisation on the part of those disabled people of that situation. Furthermore we suspect that a large number of disabled people are forced to remain in unhappy situations because of a lack of available accessible accommodation in the private rented sector, and the considerable demand placed on that in the public sector.

Disability Action encourages the Social Development Committee to take advantage of this opportunity to investigate the wider potential which is available in the creation of a new Housing Bill to address the above issues. We will look forward to future correspondence with your office.

MONICA WILSON
Chief Executive

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Written Submission by:
COOKSTOWN DISTRICT COUNCIL

23 March 2001

Housing In Northern Ireland

Your letter of the 15 February 2001 concerning the above refers. The Council at a recent meeting considered its contents when a number of issues were raised, particularly around the suggested change from mandatory renovation/ replacement grants in respect of private properties. There were:-

 

    • The experience in Britain has been that it leaves grants budget more open and vulnerable to budgetary whims with consequent lengthening of waiting queues;

 

  • Where it is not a system of "first come first served" the criteria for prioritising grant aid is crucial. This has led to undue waiting periods for decisions where the discretionary system of grants has been used.

Assurances are sought that similar problems would not be the outcome here.

M J McGUCKIN
Clerk Chief Executive

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Written Submission by:
NORTHERN IRELAND TENANTS ACTION PROJECT

22 March 2001

On behalf of my colleagues I would like to thank you for the opportunity to participate in the inquiry and I hope that the views of the NITAP staff team will inform the consideration of the contents of the proposed Housing Bill by the Minister and his colleagues on the Social Development Committee.

NI Tenants Action Project is a voluntary organisation working with over 300 community groups across Northern Ireland, adopting a community development approach to assist local people become more involved in decisions which affect their homes and neighbourhoods. The invitation to comment on the above has triggered lively discussion amongst the staff team and I have collated the comments and observations of my colleagues and am pleased to present these to the Department by way of a formal response.

I would be grateful if you could perhaps outline the full timetable for the process, as and when it is available, and if there will be an opportunity for an open public discussion on the issues raised; experience in local communities tells us that the majority of community groups have a great interest in tackling anti-social behaviour and increasing interest is being shown in the likely impact of stock transfer, should that become a reality.

I look forward to hearing from you and hope that the enclosed response is a constructive contribution to the on-going consideration.

MURRAY WATT
(Senior Liaison Officer)

Private Sector Renewal
Comments from NITAP Staff Team

A consideration of grants and group repair schemes is particularly timely given the stated intentions of HM Government through a legislative programme to give housing authorities a stronger strategic role across all sectors in their area, to foster new approaches to help poorer home-owners maintain their homes, to raise the standards of private rented housing and greater flexibility to adopt policies that reflect local conditions. Indeed, it is heartening that the Department of Social Development is mirroring the concerns of the government in initiating this Inquiry.

The NI Housing Executive has undertaken good quality research into the local housing market in recent years and a number of key areas of concern regarding the private sector have emerged; whilst some 68% of the housing stock is owner-occupied some 22,000 properties in that sector are currently classed as unfit, with a further 12,500 vacant dwellings otherwise considered part of that sector, classified as unfit. This however marks a significant improvement in the condition of the housing stock as, on the one hand the fitness standard continues to be set at a higher level and on the other the huge contribution made by NI Housing Executive through the grants system in tackling unfitness and disrepair. At the same time the most recent analysis suggests that more than 4,000 dwellings are becoming unfit every year, for a number of reasons, there is a continuing need for financial support and intervention to be made available if we are not to lose the ground gained to date in tackling poor housing.

Research into the condition of the housing stock along with the increasing level of demand for grant assistance will put increasing pressure on the grants budget. To maintain current level of activity and to ensure that assistance can be adequately targeted to those dwellings most in need of repair and those households in the poorest housing there would be merit in switching to a discretionary rather than mandatory grants system, with appropriate openness, transparency and accountability mechanisms in place. Such a discretionary system appears to be favoured by HM Government and may offer an opportunity to address major disrepair in some of the oldest stock where some of the householders are among the most vulnerable in our community; many such households have not always been able to benefit from the grants system in the normal course of events. Indeed there may also be merit in mechanisms that underwrite low interest loans or alternative fiscal benefits for major repairs.

NITAP staff feel at this time that there are sound social and economic grounds for such a system and in view of the imminent consultation document from the Minister on urban regeneration it would be timely to remind ourselves of the contribution improvements to private sector housing makes to neighbourhood renewal.

Houses in Multiple Occupation and the Private Rented Sector
Comments from NITAP Staff Team

With regard to Houses in Multiple Occupation it should be noted that NITAP have been asked to comment on the proposed voluntary licensing scheme by NI Housing Executive and will do so in detail. For the purpose of the current consideration the comments will be directed to general themes and issues surrounding this sector of the housing market.

This sector of the market has been the source of some considerable concern for many housing professionals, not just on the condition of some of the stock but also the relatively low level of protection offered by the law to those tenants in the sector. It is generally held that HMOs account for some of the worst house conditions in the UK (from the 1996 English House Condition Survey); for example, DETR research into fire risks found that tenants in bedsit houses were 6 times more likely to die from house fires than adults living in single adult housing. In N Ireland we should note that more than one half of all HMO units are in pre-1919 housing and that there is a 10% unfitness rate in the sector. At the same time tenancies are transient and that 83% of household heads are aged 18-37 and one half are students.

Yet at the same time it should also be noted that the HMO sector provides a significant section of the housing market and despite its faults is an important element of the whole. It is therefore a matter of considerable urgency that the problems of the sector are effectively dealt with; the Housing Executive should be commended for signally the intention of the local strategic authority to do just that through the voluntary licensing scheme. Yet within the context of this review NITAP staff feel strongly that there needs to be a thorough and co-ordinated approach to improving the conditions in the sector, in a fashion which involves landlords and agents as well as the Housing Executive, local councils and the Fire Authority. It is also felt that the law needs to be tightened with regard to redress and remedy available to tenants in HMO accommodation, frequently some of the more vulnerable members of our community.

To ensure that co-ordinated and a coherent approach it is felt that a mandatory system of licensing should be introduced but on a similar basis to that currently proposed by NIHE. Such a mandatory system was felt to be a more effective system rather than using alternative methods of enforcement such as the Housing Benefit system; indeed unease was expressed at such a deployment of the Housing Benefit system as there is a danger on the one hand the claimant might be penalised and on the other it may be difficult and contentious to enforce. In neither scenario is there a guarantee that it will lead to an improvement in conditions and may in fact deter landlords from letting accommodation to benefit claimants.

For their part, landlords through the representative organisations in GB and NI have been broadly supportive of a licensing scheme and clearly there are reciprocal benefits to be gained not least improvements to the HMO stock, and that should be welcomed.

It is also true that the highest and most rigorous standards should be applied to all accommodation used for the purposes of multiple occupation, and should apply equally to the typical Victorian terrace conversion as it should to Halls of Residence and hostel accommodation. A mandatory and formal system of licensing should also include an annual inspection to ensure that standards are maintained.

A further area of concern is to the legal status of tenants in the sector and NITAP staff feel that similar rights, eg to repair, privacy, comfort and protection from harassment should be available to those in HMOs as those in the social rented sector, excluding right to purchase etc. It is felt that these rights are not always enjoyed by tenants in this sector and that the awareness of redress or the opportunity to redress is not available. NITAP would like to see minimum standards for conditions of tenancy applied as part of the licensing process for all HMOs.

Whilst there are particular concerns around HMO in the wider sense the private rented sector is often overlooked in legislation and it is a sector not without its difficulties. There is great diversity within the private rented sector and this is one of its great strengths and explains why it represents an important sector of the housing market. Again, Housing Executive research has revealed some major concerns for the sector in terms of condition and the vulnerable status of many of its tenants. For example it ought to be noted that almost 5,000 properties in the sector were classified as unfit and that nearly 40% of those unfit dwellings are occupied by elderly heads of household. Almost 33% of unfitness in the sector is in rural areas and there are much higher repair costs required than in urban areas. In terms of tenants, one half of household heads are students and only 25% of all households in the sector had annual incomes in excess of £10,000.

The needs of the sector are obviously quite varied and complex and as it makes a valuable contribution to the housing market, and in view of the vulnerability of many tenants in the sector, it is important that a package of measures is drafted and resourced to tackle the poorest conditions and support the most needy households. The Housing Executive as the strategic housing authority and in recognition of the expertise and experience to hand, should be tasked with continuing to support the sector.

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Written Submission by:
CO-OWNERSHIP HOUSING

21 March 2001

Thank you for your letter of 15 February, inviting submissions to the Committee's inquiry into Private Sector Renewal and Houses in Multiple Occupation and Regulation of the Private Rented Sector. On behalf of this association, I would make the following comments:

Private Sector Renewal

We note the proposals to move from the current mandatory grants scheme to a discretionary one and would endorse the principle that the primary objectives of the grants scheme should be

 

    • to reduce unfitness (including disrepair) in the private sector and

 

  • to direct resources to those areas, and those people, in greatest need.

The Co-Ownership scheme is a form of low cost home ownership based on equity sharing. It permits people on limited incomes, who cannot afford to purchase in the conventional way, to part own a property. Whilst we hope that Co-Owners will ultimately buy out the remaining share in their property and become full home owners, experience suggests that there will always be people who simply cannot afford to do so.

In keeping with the home ownership ethos, Co-Owners are responsible for all maintenance and repairs to their property. Mindful of the financial constraints that Co-Owners face, we take care when valuing properties at initial purchase stage to ensure that they are in sound condition and do not require significant works. However, all properties deteriorate over time and we believe it inevitable that some Co-Owners will find themselves in properties that become unsafe or unfit.

We are concerned to ensure that the grants scheme will provide some redress for those Co-Owners who lack alternative means to finance necessary repairs, at least where these relate to matters of health and safety. The current system does not take a holistic approach to Co-Owners, who were encouraged into home ownership through social housing grant and are now trying to remain there. Perhaps there is a case for considering the needs of Co-Owners as a distinct tenure grouping.

Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector (PRS)

As this aspect is beyond the remit and experience of this association, we refrain from specific comment.

A D NICOL MBE
Chairman

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Written Submission by:
SIMON COMMUNITY NORTHERN IRELAND

21 March 2001

Thank you for your recent letter requesting our views on the first two topics for consideration by the Social Development Committee in relation to the above Bill.

Our comments are as follows:-

1. Private Sector Renewal

Whilst the private sector is much smaller in size than in England and Wales it is nevertheless a vitally important component of the NI Housing market. At 3-4% of the market it provides accessible accommodation for those financially and statutorily unable to access both owner occupation and the social rented sector. It is a useful option for single homeless people who cannot afford to buy their own house/flat and yet are not viewed as priority under the Housing (NI) Order 1988. It is therefore essential that this sector is both expanded, through the widening out of grants and repairs schemes, and also that current stock is regenerated.

2. Houses in Multiple Occupation (HMO) and regulation of the Private Rented Sector (PRS)

Again this sector is important to a range of client groups, many of whom are relatively transient in the lower income bands. It is essential that the 1978 Rent Order is reviewed and updated in line with other current policy. If we can provide any further information please do not hesitate to contact me.

CAROL O'BRYAN
Chief Executive

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Written Submission by:
DONACLONEY HOUSING ASSOCIATION LTD

16 March 2001

The Association is the owner of the historic linen mill village of Donacloney and control is vested in the elected committee of local residents.

Since 1977 we have gradually renewed all the housing stock with HAG and for the last ten years we have pursued a voluntary sales policy. Today our housing stock is 60% social rented and 40% owner occupied. We refuse to sell to landlords or speculators.

We would support the concept of discretionary grants or group repair schemes.

We have no experience of the HMO sector.

THELMA P ARMSTRONG
Admin/Dev Officer

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Written Submission by:
PRESBYTERIAN HOUSING ASSOCIATION (NI) LIMITED

14 March 2001

Thank you for your letter of 15 February 2001 concerning the Social Development Committee's inquiry into Housing in Northern Ireland.

The Presbyterian Housing Association would not wish to make comment on the areas of -

 

    • Private Sector Renewal;

 

  • Houses in Multiple Occupation and Regulation of the Private Rented Sector.

When the Committee is considering other areas of Housing, eg The Rights of Housing Association Tenants to buy their properties, which would have a direct bearing on the PHA's work, then we would welcome the opportunity to comment.

Thank you for your consultation.

J TINMAN
Director

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Written Submission by:
NORTHERN HEALTH AND SOCIAL SERVICES BOARD

9 March 2001

I would like to thank you for your letter dated 15 February 2001 regarding the proposed phases of work to be undertaken as part of the comprehensive inquiry into Housing in Northern Ireland.

With regard to the terms of reference for the first two areas under consideration, Private Sector Renewal and Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector (PRS), the Board would have no substantive comment to make on these particular issues but would appreciate receipt of a copy of the outcome reports.

I note from your letter that you will be writing to the Board again seeking views on the other areas outlined for consideration. Your proposed examinations of issues around Anti-Social Behaviour and Homelessness will be of particular interest to the Board and I look forward to hearing from you again in due course.

STUART MacDONNELL
Chief Executive

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Written Submission by:
BALLYMENA BOROUGH COUNCIL

8 March 2001

Housing in Northern Ireland

I acknowledge receipt of your letter dated 15 February 2001 which was tabled at Council's Public Sector Liaison Committee Meeting in March.

Members welcomed both the consultation and research presently ongoing with regard to Houses in Multiple Occupation and the Housing Bill which was coming forward to the Assembly in the near future.

Council would also make the following comments -

 

    • It would wish to see a compulsory method of licensing as opposed to a voluntary method; and

 

  • Would wish the importance of Health and Safety in houses with multiple occupation to be paramount.

M G RANKIN
Town Clerk and Chief Executive

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Written Submission by:
FLAX HOUSING ASSOCIATION LTD

7 March 2001

Thank you for your letter of 15th February requesting submissions in reference to Private Sector Renewal, HMOs and Regulation of the Private Rented Sector.

The Association is represented on the Council of the Northern Ireland Federation of Housing Associations and would support NIFHA's submission on these matters.

JOHN DONAGHY
General Manager

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Written Submission by:
BALLYNAFEIGH HOUSING ASSOCIATION LTD

6 March 2001

Thank you for your letter of the 15th February, 2001 in which you ask for this Association's opinions on the topics of Private Sector Renewal and houses in multiple occupation.

On the first issue, it is our opinion that the present grant scheme does need to be reviewed. The major problem which the present system is the length of time taken to move from initial application stage to approval being issued.

Group repair schemes are not the answer in our opinion as these have been tried before and all the feed back to us has been negative.

The most negative comments in relation to group repair schemes has come from the contractors involved in carrying out the work. Many of them found difficulty in receiving payment and would not be prepared to engage in this type of work again.

With regard to Houses in Multiple Occupation and Regulation of the Private Rented Sector, it is the opinion of this Association that major change is required.

Strict control and enforcement policy with regard to fire detection prevention and escape equipment and facilities is essential in the light of a tragedy which occurred in a HMO in the recent past in this area.

The registration of landlords and the introduction of measures to ensure greater accountability for standards and for the behaviour of tenants must form the basis of any change.

There are some responsible private landlords but there are also those who are only interested in reaping financial benefit without wishing to accept any responsibility for good management of their properties. It is essential that this major problem is addressed.

It may also be useful for all concerned, including the social rent providers if a register of privately rented properties was established, perhaps on a district basis as with the Northern Ireland Housing Executive.

I trust this submission of views will be of some assistance to you but should you require anything further, please do not hesitate to contact me.

 

P O'NEILL
Development Officer

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Written Submission by:
CRAIGAVON BOROUGH COUNCIL
(public services liaison committee)

6 March 2001

In its Green Paper "Quality and Choice: A Decent Home for All" the Government recognises that policies for housing are important for the wider agenda in promoting social justice and better health and for tackling social exclusion. Craigavon Borough Council endorses this approach by Government and, given local governments active involvement in housing and health issues generally, we strongly support the Committee's timely inquiry into Housing in Northern Ireland and welcome this opportunity to input to the proposed Housing Bill.

Private Sector Renewal

Repairs Grants

The proposed move from mandatory to discretionary grants scheme is welcomed. The current grants regime which provides for mandatory repairs grants for work carried out under Public Health Notices has not always resulted in the appropriate targeting of public funds and has created some operational difficulties for Environmental Health Departments. In 1996 the Government did move to limit to £500 the maximum amount of repairs grant available to owner occupiers, however, landlords in the private rented sector and the owners of vacant property can still qualify for repairs grant up to a maximum of £5,500, irrespective either of their means or of the potential income from their property. It is considered appropriate that more targeted means testing, linked to a discretionary grants regime, should apply in most cases to work carried out under Public Health Notices. Landlords however of protected tenancies (those let under the Rent (NI) Order 1978) can only charge what the Rent Officer sets as the legally recoverable rent of the property. This will usually be equivalent to a Housing Executive (or subsidised) rent. Some protected tenancies however have their rent limited even further to their 1978 value. In light of the limited income from protected tenancies, the present arrangements whereby mandatory and non means tested repairs grants are available to landlords of protected tenancies should continue to apply where work is carried out on foot of both Public Health Notices and Certificates of Disrepair.

Regulator of Fitness Standard

District Councils are ideally placed to provide the necessary independence to ensure that the assessment of fitness is both accurate and objective. EHOs working in local authority Environmental Health Departments have the collective and corporate regulatory experience in fitness assessment, not only through their training, but also through their statutory powers under the Rent (NI) Order 1978, their involvement as surveyors and supervisors in successive house condition surveys and also through referrals from the Housing Executive.

Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector (PRS)

It has long been recognised that some of the worst living conditions are to be found in HMOs. It is also clear that existing powers have often been ineffective in remedying the unsatisfactory conditions that regularly arise in this section of the privately rented sector. It is apparent that a properly targeted pro-active policy of enforcement supported by an appropriate legislative framework is essential if the health and safety of all people living in HMOs is to be protected.

The current definition of HMO;

A House That is Occupied by Persons Who do Not Form a Single Household

has given rise to a number of grey areas. For example, many shared houses, particularly those occupied by students, are excluded from the provisions. The DETR has recently suggested that there should be a new clearer definition of HMO, namely,

a house occupied by persons who are not all members either of the same family or of one or other of 2 families.

Craigavon Borough Council would endorse this view and would recommend that the same definition apply in Northern Ireland.

The Government has given a commitment to introduce a mandatory licensing scheme in England, Wales and Northern Ireland and the DETR has consulted widely on this.

Craigavon Borough Council would wish to see the Committee recommend that the proposed legislative changes be brought forward locally as a matter of urgency notwithstanding that the Government has yet to give effect to the proposals in England and Wales. Craigavon Borough council feel this is particularly important in light of the Housing Executive's proposed voluntary licensing scheme which is unlikely to adequately address the worst HMOs which often house the poorest and most vulnerable members of society.

Regulator of Standards in Houses in Multiple Occupation

Concern is expressed regarding the Housing Executive's conflicting roles as the province's largest landlord whilst simultaneously being responsible for regulating standards in the private rented sector. The Housing Executive's draft strategy on HMOs shows that since 1993 a total of 893 Notices have been served, yet only 267 grant schemes have been completed. This leaves a shortfall of 626 Notices with only 7 prosecutions for non-compliance. Based on this information the Housing Executive appears to be operating a primarily grant led strategy. The Housing Executive should however be targeting need on a "worst first" basis and backing it up by a pro-active policy of enforcement against poor landlords who fail to protect the health and safety of their tenants. This apparent landlord focused approach to enforcement in the Private Rented Sector appears to be consistent with the Housing Executive's reluctance to serve Repair Notices on landlords of unfit property.

Regulator of HMO Standards

As with the fitness standard Craigavon Borough Council believe that the Housing Executive should be relieved of its regulatory role in relation to the privately rented sector. District Councils, through their Environmental Health Departments, provide the appropriate independence to fulfil this regulatory role. EHOs working within District Councils have the necessary training and experience to assess health risks and to identify enforcement priorities so that the most dangerous properties are addressed first. A discretionary HMO grant from the Housing Executive should be used to facilitate these landlords in complying with their statutory obligation rather than as an inducement which they may or may not accept. In addition to the above, a transfer of these regulatory functions would provide District Councils with greater democratic accountability in the field of housing without in any way undermining the Housing Executive's strategic role as the province's Housing Authority.

Houses in Disrepair but not Unfit

Local authorities in England and Wales have the power to require a landlord to effect repairs to those of their properties which are in disrepair but not unfit (s 190 Housing Act 1985). Such a provision gives to local authorities the ability to prevent houses from falling into unfitness. These provisions however were never extended to Northern Ireland where District Councils can usually only address disrepair through the Public Health Acts. It should also be noted that public health notices can only be served, in respect of disrepair, where it is giving rise to risk of disease or illness and not to risk of physical injury. Similar powers to those of s 190 of the Housing Act 1985 should be granted to Northern Ireland District Councils.

Summary of Recommendations

 

    • Discretionary, means tested, grants should be available for work carried out under Public Health Notices.

 

    • Mandatory, non-means tested, Repairs Grants should continue to be available in respect of tenancies protected under the Rent (NI) Order 1978, for work carried out under Public Health Notices and Certificates of Disrepair.

 

    • There should be a new definition of HMO.

 

    • The Northern Ireland Assembly should introduce mandatory licensing of HMOs as a matter of priority.

 

    • District councils should be designated as the regulators of standards in HMOs.

 

  • Provisions similar to those contained in s 190 of the Housing Act 1985 for dealing with disrepair in otherwise fit houses should be made available to district councils in Northern Ireland.

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Written Submission by:
HABINTEG HOUSING ASSOCIATION (ULSTER) LTD

5 March 2001

Thank you for your letter of 15 February last highlighting that the Social Development Committee is currently undertaking an inquiry into housing in Northern Ireland in light of the proposed Housing Bill.

We welcome your emphasis on consultation and appreciate your offer to make written submissions. Habinteg, as part of Northern Ireland Federation of Housing Associations, is reviewing a number of the areas that your Committee is paying particular attention to and has agreed not to independently forward responses on your initial two areas of consideration, private sector renewal and Houses in Multiple Occupation [HMOs] and Regulation of the Private Rented Sector.

Please contact us at any stage if you feel that we could be of any help to your Committee's work.

D C C DULY
Director

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Written Submission by:
CHARTERED INSTITUTE OF ENVIRONMENTAL HEALTH

3 March 2001

Terms of Reference

 

    • Private Sector Renewal

 

  • Houses in Multiple Occupation and Regulation of the Private Rented Sector

Introduction

Founded in 1883, the Chartered Institute of Environmental Health (CIEH) is a professional and education body, dedicated to the promotion of environmental health and to encouraging the highest possible standards in the training and the work of environmental health professionals. It is an independent non-governmental organisation made up 17 centres, 52 branches and approximately 9,000 members, most of whom work for local authority Environmental Health Departments throughout the United Kingdom. The Northern Ireland Centre has strong links to our sister organisation in the Irish Republic with whom we facilitate an annual joint conference on areas of mutual interest.

Environmental Health Officers (EHOs), and their predecessors, have been at the forefront in the drive to improve housing conditions and to protect people from unhealthy conditions in their homes since the middle of the nineteenth century, given that the Public Health Act has been in existence for over 150 years. Their input into the field of housing and health covers both the technical application of Housing and Public Health legislation as well as the development of appropriate housing standards. For example, EHOs are currently taking the lead in the development of the Health and Safety Rating System (HSRS), which it is proposed will replace the existing fitness standard, whilst the current DETR guidance on HMO standards (Circular 12/92) was originally derived from guidance published by CIEH.

In the Green Paper "Quality and Choice: A Decent Home for All" the Government recognises that policies for housing are important for the wider agenda in promoting social justice and better health and for tackling social exclusion. The NI Centre endorses this approach by the Government and, given our active involvement in housing and health issues generally, we strongly support the Committee's timely inquiry into Housing in Northern Ireland and welcome this opportunity to input to the proposed Housing Bill. A copy of the CIEH response top the Green Paper is included for your information.

In our submission to the 1994 Housing Policy Review we included similar proposals to those set out below. These were primarily designed to help meet the then Department of the Environment's review principal of:

 

  • the continued separation of regulatory and delivery functions.

The NI Centre therefore was particularly disappointed when the Department of the Environment (NI) failed to recognise the merit of these proposals in their subsequent 1996 policy document "Building on Success - the way ahead".

Private Sector Renewal

Repairs Grants

The NI Centre broadly welcomes the proposed move from mandatory to discretionary grants schemes. The current grants regime which provides for mandatory repairs grants for work carried out under Public Health Notices has not always resulted in the appropriate targeting of public funds and has created some operational difficulties for Environmental Health Departments. In 1996 the Government did move to limit to £500 the maximum amount of repairs grant available to owner occupiers, however, landlords in the private rented sector and the owners of vacant property can still qualify for repairs grant up to a maximum of £5,500, irrespective either of their means or of the potential income from their property. The NI Centre consider it appropriate that more targeted means testing, linked to a discretionary grants regime, should apply in most cases to work carried out under Public Health Notices. Landlords however of protected tenancies (those let under the Rent (NI) Order 1978) can only charge what the Rent Officer sets as the legally recoverable rent of the property. This will usually be equivalent to a Housing Executive (or subsidised) rent. Some protected tenancies however have their rent limited even further to their 1978 value. The NI Centre believe that, in light of the limited income from protected tenancies, the present arrangements whereby mandatory and non means tested repairs grants are available to landlords of protected tenancies should continue to apply where work is carried out on foot of both Public Health Notices and Certificates of Disrepair.

Unfitness

Although the overall proportion of unfit dwellings in Northern Ireland has fallen significantly since 1974 it is still unacceptably high at 7.3% (1996 House Condition Survey). The primary vehicle for addressing unfitness over that period was the implementation of a comprehensive redevelopment programme which removed most of the old Victorian slum properties. The current unfitness figure however for Belfast is 7.5% whilst areas such as Fermanagh, Cookstown and Down are running at 17.5%, 13.0% and 10.6% respectively. The NI Centre are concerned that the Housing Executive's present approach to area improvement, linked to their reluctance to implement certain of their statutory powers for dealing with individual unfit dwellings, runs contrary to their strategic objective of reducing unfitness.

Urban Renewal Areas (URA) and Redevelopment Areas (RDA)

The NI Centre would wish the Committee to give serious consideration to the Housing Executive's current approach to area renewal. Many of the recently designated URAs and RDAs were Housing Action Areas (HAAs) in the 1970's and 1980's when significant resources were invested in terms of enveloping schemes and improvement grants. Most of the dwellings in HAAs were upgraded through the use of public funds as a means of improving the housing stock generally whilst simultaneously reducing unfitness. It is therefore difficult to reconcile the effect of this area improvement with the current reported unfitness levels in many of these areas. The NI Centre would therefore see merit in transferring the assessment of the fitness standard to an independent arbitrator so that the public can have confidence that there is an objective basis for area renewal. This would be particularly relevant in relation to RDAs which require a statutory minimum of 1/3 of the dwellings to be unfit.

Regulator of Fitness Standard

This NI Centre believe that District Councils are ideally placed to provide the necessary independence to ensure that the assessment of fitness is both accurate and objective. EHOs working in local authority Environmental Health Departments have the collective and corporate regulatory experience in fitness assessment, not only through their training, but also through their statutory powers under the Rent (NI) Order 1978, their involvement as surveyors and supervisors in successive house condition surveys and also through referrals from the Housing Executive.

It is also of relevance that while in theory the fitness standard is applicable to all housing, in practice it does not apply to Housing Executive dwellings for the reason that the Housing Executive cannot take enforcement action against itself. The Housing Executive owns over 138,000 dwelling units, making up 23% of the total housing stock of which 2% are unfit (NI House Condition Survey 1996). The NI Centre therefore believes that enforcement of the fitness standard in Housing Executive property should also be the responsibility of District Councils. This would not only provide Housing Executive tenants with an independent regulator but would also give them the same protection as those people living in the privately rented sector.

Houses in Multiple Occupation (HMO) and Regulation of the Private Rented Sector (PRS)

The Regulation of standards in HMOs and the privately rented sector generally is an issue that the NI Centre has previously raised with Government Departments. NI Centre members have long recognised that some of the worst living conditions are to be found in HMOs. It is also clear that existing powers have often been ineffective in remedying the unsatisfactory conditions that regularly arise in this section of the privately rented sector. It is apparent that a properly targeted pro-active policy of enforcement supported by an appropriate legislative framework is essential if the health and safety of all people living in HMOs is to be protected.

The current definition of HMO;

A House That is Occupied by Persons Who do Not Form a Single Household

has given rise to a number of grey areas. For example, many shared houses, particularly those occupied by students, are excluded from the provisions. The DETR has recently suggested that there should be a new clearer definition of HMO, namely,

a house occupied by persons who are not all members either of the same family or of one or other of 2 families.

The NI Centre would endorse this view and would recommend that the same definition apply in Northern Ireland.

The Government has given a commitment to introduce a mandatory licensing scheme for HMOs in England, Wales and Northern Ireland and the DETR has consulted widely on this. The CIEH has provided a full response to the consultation and has also drafted a "model licensing scheme" setting out general principals in relation to design, construction, maintenance and management as well as detailed space and amenity standards and fire safety requirements. A copy of the scheme is included for your information.

The NI Centre would wish to see the Committee recommend that the proposed legislative changes be brought forward locally as a matter of urgency notwithstanding that the Government has yet to give effect to the proposals in England and Wales. The NI Centre fell this is particularly important in light of the Housing Executive's proposed voluntary licensing scheme which is unlikely to adequately address the worst HMOs which often house the poorest and most vulnerable members of society.

Regulator of Standards in Houses in Multiple Occupation

The NI Centre has previously expressed concern regarding the Housing Executive's conflicting roles as the province's largest landlord whilst simultaneously being responsible for regulating standards in the private rented sector. The Housing Executive's draft strategy on HMOs shows that since 1993 a total of 893 notices have been served, yet only 267 grant schemes have been completed. This leaves a shortfall of 626 notices with only 7 prosecutions for non-compliance. Based on this information the Housing Executive appears to be operating a primarily grant led strategy. They should however be targeting need on a "worst first" basis and backing it up by a pro-active policy of enforcement against those landlords who fail to protect the health and safety of their tenants. This apparent landlord focused approach to enforcement in the Private Rented Sector appears to be consistent with the Housing Executive's' reluctance to serve Repair Notices on landlords of unfit property.

Regulator of HMO Standards

As with the fitness standard the NI Centre believe that the Housing Executive should be relieved of its regulatory role in relation to the privately rented sector. The NI Centre consider that District Councils, through their Environmental Health Departments, provide the appropriate independence to fulfil this regulatory role. EHOs working within District Councils have the necessary training and experience to assess health risks and to identify enforcement priorities so that the most dangerous properties are addressed first. A discretionary HMO grant from the Housing Executive should be used to facilitate these landlords in complying with their statutory obligation rather than as in inducement which they may or may not accept. In addition to the above, a transfer of these regulatory functions would provide District Councils with greater democratic accountability in the field of housing without in any way undermining the Housing Executive's strategic role as the province's Housing Authority.

Houses in Disrepair but not Unfit

Local authorities in England and Wales have the power to require a landlord to effect repairs to those of their properties which are in disrepair but no unfit (s 190 Housing Act 1985). Such a provision gives to local authorities the ability to prevent houses from falling into unfitness. These provisions however were never extended to Northern Ireland where District Councils can usually only address disrepair through the Public Health Acts. It should also be noted that public health notices can only be served, in respect of disrepair, where it is giving rise to risk of disease or illness and not to risk of physical injury. The NI Centre would therefore wish to see similar powers to those of s 190 of the Housing Act 1985 being granted to Northern Ireland District Councils.

Best Value in Housing

The Government's agenda for modernising local government includes a commitment to introduce and secure Best Value for local authority services. The DETR's Best Value in Housing Framework stresses "the need to embrace innovation and new approaches; and above all, determination to do better". The NI Centre consider the novel suggestion that District Councils should be the regulators of housing standards and the arbiters of the fitness standard embraces the principles of Best Value in that;

 

    • it releases the Housing Executive from its present poacher/gamekeeper role;

 

    • it ensures that the law relating to health and safety in housing is enforced by environmental health professionals;

 

    • it allows the Housing Executive to focus on its strategic role and the maintenance of its own stock;

 

    • it introduces greater democratic accountability into the field of housing; and

 

  • it encourages closer working relationships between the Housing Executive and District Councils.

Rent (NI) Order 1978

The Rent (NI) Order 1978 is the primary statute governing protected tenancies. There are a number of issues relating to this legislation that the NI Centre would wish to see addressed, however, it is our understanding that the Minister for Social Development has recently convened a working group to review this legislation. We trust therefore that there will be an opportunity to input our views to any subsequent consultation.

Notwithstanding the above however the Rent Order does address some broader issues. For example, it requires all landlords, including the Housing Executive, to provide their tenants with rent books, and appropriate Regulations have been enacted. The Rent Order however does not designate any enforcing authority for these provisions and, as such, many landlords ignore these requirements. The NI Centre would therefore recommend that an amendment of the Rent Order be included in the Housing Bill designating district councils as the enforcing authority for the Rent Book Regulations. This would not only provide tenants with greater security of tenure but would also facilitate many of the investigations carried out by district council Environmental Health Departments into allegations of harassment of unlawful eviction.

Conclusion

Whilst a decent home is a fundamental right of everyone the reality is that the most disadvantaged and vulnerable members in society are usually concentrated in the poorest housing. Their vulnerability often makes them doubly disadvantaged in that not only is their health, safety and welfare compromised by their living conditions but they have little or no protection against uncaring or unscrupulous landlords. The Government acknowledges that too many people live in poor quality housing or find that their landlord, private or public, does not provide a proper service. The NI Centre therefore would wish to see a comprehensive legislative framework for housing which encompasses appropriate controls to protect those who are unable to protect themselves. Within this framework there should also be designated regulatory authorities with the expertise, the desire and the independence to ensure that those who refuse to provide satisfactory housing for their tenants are held to account.

The NI Centre believe that district council Environmental Health Departments should now have an expanded role in housing. At first view the recommendation that the regulation of housing standards should be a district council function may appear radical however it is central to the NI Centre's current housing policy in Northern Ireland. The NI Centre believes that it embraces the Government's vision of Best Value in public services in that it brings accountability in housing closer to the people, it ensures that judgements relating to health and safety in housing are made by Environmental Health professionals, it allows for greater transparency for those housing policies that impact directly on the most vulnerable members of society, it forces the statutory authorities to apply practical joined-up and strategic policies and it provides local solutions to local issues.

Enclosures

Chartered Institute of Environmental Health response to the Government Green Paper "Quality and Choice: A decent home for all".

Chartered Institute of Environmental Health "Houses in Multiple Occupation: - model licensing scheme"

Summary of Recommendations

 

    • Discretionary, means tested, grants should be available for work carried out under Public Health Notices.

 

    • Mandatory, non-means tested, Repairs Grants should continue to be available in respect of tenancies protected under the Rent (NI) Order 1978, for work carried out under Public Health Notices and Certificates of Disrepair.

 

    • District councils should be the sole arbiters of the statutory fitness standard.

 

    • There should be a new definition of HMO.

 

    • The Northern Ireland Assembly should introduce mandatory licensing of HMOs as a matter of priority.

 

    • District councils should be designated as the regulators of standards in HMOs.

 

    • Provisions similar to those contained in s 190 of the Housing Act 1985 for dealing with disrepair in otherwise fit houses should be made available to district councils in Northern Ireland.

 

  • District councils should be designated as the enforcing authority for the Rent Book Regulations under the Rent (NI) Order 1978.

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Written Submission by:
HEARTH HOUSING ASSOCIATION

22 February 2001

Thank you for your letter of 15 February asking for comments on some of the points to be covered by the forthcoming Housing Bill. The first two points on which you are seeking comments do not affect our housing association directly, and we should have more substantive comments on the remaining sections.

Private Sector Renewal

We would welcome the move to discretionary grants, as at present people with limited means are sometimes faced with the choice of continuing with sub-standard conditions on carrying out major expensive and disruptive works to their houses. Where conditions are particularly bad they will be faced with closing orders and having to leave their houses instead of being able to improve them incrementally according to their needs and preferences.

Discretionary grants will enable occupants of bad housing to tackle serious problems without having to change elements about which they may be relatively happy, and to target their contribution towards the works they really need.

It is not clear from your letter what is proposed for group repair scheme, but again if this allows people to improve their housing conditions without making alterations they do not want to make it should be an improvement on the present system.

One of the major faults with improvements schemes has been their tendency to require replacement of components that are perfectly capable of repair. The resources wasted in replacement of sash windows and natural slate roofs over the years have been particularly unfortunate, both in terms of aesthetic change and of environmental sustainability. In many cases such elements are capable of repair rather than needing wholesale replacement.

Houses in Multiple Occupation

It appears that this measure is more by way of being a study of existing problems than a proposal to make changes.

While appreciating that many HMOs are poorly managed and need supervision regarding fire safety etc, we have been concerned at the effect of blanket requirements on buildings in this sector as with individual private houses. Many HMOs are substantial buildings of architectural character (whether they are formally listed or not), and officers responsible for monitoring them should be made aware of aspects of historic or aesthetic interest which could be retained in a sympathetic and flexible application of standards but are easily lost in a more standardised approach.

We look forward to commenting on other aspects of this Bill in due course.

MARCUS PATTON

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Written Submission by:
NORTH BELFAST MISSION HOUSING SOCIETY LTD

22 February 2001

I refer to your letter of 13 February 2001 inviting the Society to comment on certain aspects of housing in Northern Ireland. With reference to the areas highlighted, I would make the following comments:-

1. Private Sector Renewal

I would welcome the proposal to investigate the current NI proposals to move from mandatory to discretionary grants schemes and group repair schemes. It would also be beneficial to conduct appropriate comparisons with the United Kingdom and the Republic of Ireland

2. HMOs and Regulation of the Private Rented Sector

Again I would welcome the examination of current NI Law and Policy with comparison to the United Kingdom and the Republic of Ireland.

The Society has recently responded to the Housing Executive's Consultation document on the voluntary Licensing of HMOs. Our own Residential Home in East Belfast is subject to independent Monitoring and Regulation by Registration and Inspection Unit. We believe this type of registration and 'regulation' has many positive benefits for all parties, particularly tenants/residents whose safety and well-being must be paramount.

We do also recognise that the voluntary licensing will not get all owners/managers of HMOs to register however it is a starting point from which to build.

We appreciate the opportunity to comment on elements of the proposed Housing Bill and look forward to having a similar opportunity to do so on other elements, in due course.

L McADAMS
Chief Executive

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Written Submission by:
THE NORTHERN IRELAND FEDERATION OF
HOUSING ASSOCIATIONS

HOUSE SALES SCHEMES FOR HOUSING ASSOCIATION TENANTS
IN NORTHERN IRELAND

Draft For Discussion - February 2001

14 February 2001

1. Introduction

This paper aims to outline the Federation's initial views on a statutory scheme to help tenants of housing associations to become home owners. A more detailed policy statement on sales to sitting tenants will be issued after considering the results of independent research commissioned by the NIFHA and due to be completed by October 2001.

2. Background

The Department for Social Development is proposing to introduce legislation in Northern Ireland that will allow tenants of registered housing associations the same right to purchase their home as currently exists for Housing Executive tenants.

The DSD letter dated 27th September 2000 about the proposed Housing Bill (Northern Ireland) 2000 states:

"A voluntary sales scheme for housing association tenants, similar in design to the Housing Executive's House Sales Scheme, has been in operation for some time. As an incentive, the Department allows associations which sell houses to retain the proceeds and also provides them with a voluntary purchase grant to make up the difference between the sale price (which includes a discount) and the market value. Some associations have decided not to operate the voluntary scheme because of financial implications. However, housing associations now build the majority of new social housing and it is therefore proposed that housing association tenants should have the same statutory right to buy as Housing Executive tenants. The policy objective is that all tenants of social housing should have the same right to buy their homes."

3. Federation's View

The housing association movement in Northern Ireland fully supports the aspiration of individual tenants to become owner occupiers.

However, it is essential that the DSD, the Housing Executive and housing associations take a more strategic view of the existing NIHE house sales policy and its implications for the well being of all the people of Northern Ireland.

A new sales policy for social housing tenants should:

1. Meet housing need and retain sufficient stock to offer adequate choice to people who can not or do not want to become owner occupiers.

2. Not compromise the financial viability of housing associations or put the repayment of private loans at risk.

3. Contribute to achieving greater tenure mix.

The NIHE's sales policy is now in its twenty-first year and the Federation feels that, like the former MIRAS tax relief scheme for owner occupiers, which was phased out over a number of years, the NIHE's sales policy should be fundamentally reviewed.

In particular, housing associations believe the scheme fails to take account of:

(a) the shortage of social housing in key areas eg West and North Belfast. This is so severe that the NIHE and housing associations have had to repurchase former NIHE properties to meet demand in certain areas;

(b) the need to ensure that housing associations remain financially viable due to discounted sales to tenants. The possible adverse financial impact of discounted sales to sitting tenants was acknowledged by the Department as a major concern in section 2.4 of Circular HAC 04/98 "The Voluntary Sales Scheme";

(c) abuses in the scheme, exacerbated by the very high rate of discounts;

(d) questions about the fairness of a scheme which awards bigger discounts to tenants living in high-value areas than to those in low-value areas; and

(e) the value for money which the scheme is giving the taxpayer.

4. Alternative Schemes

To address these concerns the Federation is developing alternative schemes for discussion with the DSD. Option 1 is a modified version of the NIHE's scheme and Option 2 takes a more radical approach. NIFHA will be glad to consider other alternatives.

5. Option 1: Modified NIHE Scheme

5.1 Discount

(a) Both houses and flats should qualify for the same level of discount. The rationale for applying a two tier system of discounts is very questionable.

(b) Discounts should begin at 30% but only after 2 years' tenancy (as with the Right to Buy in Britain) and continue by 1% (no 31%) up to 50% discount with a cash ceiling of £40,000 maximum. This would discourage some of the abuses associated with joint purchases in the current NIHE scheme.

5.2 Cost Floor

In addition to the cost floor rule, no property should be sold for less than the amount of loan outstanding on it.

5.3 High Demand Areas

There is strong anecdotal evidence to suggest that in key parts of the housing market homeless applicants can no longer be rehoused within a reasonable period of time. Tenants of associations in high demand areas should only be offered transferable discounts equal, in cash terms, to the discount that would otherwise apply to their present home. A high demand area would be defined as one where most full duty homeless applicant (FDA or equivalent) on the waiting list cannot be rehoused within a 1-year period.

5.4 Exemptions

Associations would have discretion to apply exemptions, for example:

(a) all sheltered accommodation*;

(b) all specialist accommodation*;

(c) all supported accommodation;

(d) all foyers;

(e) existing mixed funded properties;

(f) all small housing associations (<100 dwellings);

(g) all tenants with more than 4 weeks' arrears;

(h) all squatters*;

(i) all temporary lettings*;

(j) all rural dwellings; and

(k) accommodation inextricably linked with communal areas/facilities.

Those marked * are currently excluded from the Housing Executive's scheme.

6. Option 2: Right to a Purchase Grant

6.1 Many of the complications and anomalies of the NIHE sales scheme flow from the fact that it combines two sets of factors:

 

    • factors relating to the dwelling (eg market value, historic costs, design); and

 

  • factors relating to the tenant (eg number of years of social housing tenancy).

6.2 In contrast, Option 2 is entirely based on factors relating to the tenant. Apart from any who were not conducting their tenancy in a satisfactory manner, tenants of more than a certain number of years' standing would be eligible for a purchase grant which would increase with each year of social housing tenancy, up to a maximum figure. The figures used in this formula should be reviewed annually. No tenant would be allowed more than one Purchase Grant.

6.3 The tenant could use the Purchase Grant to buy his or her:

 

    • present home (subject to the consent of the housing association);

 

    • another vacant dwelling in the housing association's stock (subject to the associations' consent); and

 

  • a dwelling on the open market.

In every case, the dwelling would be purchased at its vacant possession market value.

6.4 The ex-tenant would be required to repay a proportion of the Purchase Grant if he or she sold the property within five years.

6.5 Advantages of Option 2 include its:

(a) equal treatment of all tenants (including those occupying specialised dwellings);

(b) administrative simplicity;

(c) flexibility to suit local circumstances (eg the local supply and demand for social rented housing);

(d) suitability for both mixed funded and publicly funded dwellings; and

(e) ease of extension to NIHE tenants.

6.6 The cost of Purchase Grants should be met by government and the proceed from sales (net of an allowance for the association's administrative costs, legal fees, etc) should be sent to the government.

7. Comments

The Federation welcomes comments on this paper, in the first instance from housing associations. After revision, if appropriate, NIFHA intends to discuss it with the DSD, the Housing Executive, the Chartered Institute of Housing and other interested parties.

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GRAHAM MURTON

Written Submission by:
NEWTOWNABBEY BOROUGH COUNCIL

In general the Council would like to see landlords, owners, managing agents, managers, tenants, statutory and voluntary agencies agreeing to compulsory licensing and inspection as a means to increase both the standards of accommodation and management of same, safeguards established for vulnerable groups and a partnership approach to all aspects of accommodation for the mutual benefit of all.

In particular the Council wish the Social Development Committee to consider the following points with regard to the proposed Housing Bill.

1. Compulsory licensing should be introduced for all rented/leased accommodation as a means to increase standards.

2. In the public sector separate organisations should be established to control the allocation of accommodation and appeals.

3. The organisation hearing appeals should have a wider range of representation to include members of the Health and Social Services Councils and District Councils.

4. All accommodation should be inspected once it becomes vacant and also be subject to random inspections.

5. Safeguards need to be established, where they do not already exist, to protect vulnerable members of the community.

6. Owners and managers must be responsible for all aspects of the renting/leasing sector particularly with regard to liability insurance. They should also establish closer and formal relationships with groups like the Fire Service and Environmental Health departments of local Councils.

7. Tenants charters to an agreed standard should be established to inform tenants of their responsibilities particularly with regard to Health and Safety.

8. There is a need to establish formal managerial standards and a system of accreditation.

9. There is a need to have compulsory more stringent annual inspections for accommodation of a higher risk category.

10. The Council is against any self certification process of acceptable standards of accommodation. Any assessment of suitability must be carried out by independent assessors.

11. The Licensing Authority and any Review Panel should be widely representative of the community and include representatives of local Councils.

12. The Inspecting Body should be independent of the Licensing Authority.

13. Any register of properly licensed accommodation should be widely available.

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Written Submission by:
OPEN DOOR HOUSING ASSOCIATION (Northern IRELAND) ltd

Since the main thrust of our Associations work is concerned with assisting people with severe housing difficulties we would wish to concentrate our submissions on the last two topics the Committee is considering, Anti-Social Behaviour and Homelessness. However since many of the factors which lead to extreme housing difficulties are linked to general conditions we would also wish to comment briefly on the other items under consideration and offer the following points for consideration with respect to the Private Sector Renewal and HMO's and the Private Rented Sector.

Before doing this however we would also like to take the opportunity to make a general comment with respect to the topics under consideration and the processes of examining these topics. Firstly it is our understanding that the proposed Housing Bill to which this matter relates is a piece of consolidating legislation intended to 'tidy up' the parity situation with respect to Northern Ireland and the rest of the UK. If this is the case it might have been better to use the opportunity to undertake a wider examination of the appropriateness of the legislation overall to the local context (including additional proposals) rather than embark on a technical appraisal of the bits of the proposed Bill in a piece-by-piece fashion.

With respect to the two topics currently being considered we would have the following comments: Any move from mandatory to discretionary grants would be best applied in the context of a clear targeting framework particularly with respect to new TSN. It would also be given a better degree of impact and possible uptake if it were to be applied in the context of a specialist independent appeal framework so that those working up grant applications for a discretionary system could feel confidence in having their work fully and properly dealt with. This latter approach could also be usefully applied in other contexts such as selection appeals for social housing applicants. It might also be considered in relation to any proposals to introduce a local version of the Housing Inspectorate now established in England & Wales. Finally any proposals to link renewal grant eligibility to some form of standards regulation might be usefully expanded into a form of housing 'MOT' which could fit in with the current Westminster governments drive on simplifying and standardising documentation for house sales.

Regarding Houses in Multiple Occupation and Regulation of the Private Rented Sector this is an area, which has had some very adverse effects on low-income tenants particularly single people. We would suggest that perhaps the best approach the committee could consider would be to look at the introduction of some form of statutorily enforceable rights to security of tenure. This would enable tenants to come forward with complaints without fear of eviction especially in the HMO sector where the registration process is largely driven by tenants raising queries and complaints about their homes. With respect to rent levels and rent regulations we fell it would be worth exploring mechanisms foe linking rent levels in the public and private sector it would also be important in this context to have regard to other factors such as the National Minimum Wage, in order to avoid poverty trap conditions occurring. One formula for affordability for example would be rent norm of 25% of the NMW. Finally where as in North Belfast the NIHE, see the private sector as the primary source of future supply for singles (the largest group on their current waiting list) there should be a required linkage to affordability considerations such as outlined above.

Ad Hoc Addendum to the Report on the Inquiry into Housing in Northern Ireland (Number 2/01R)

Due to an administrative oversight 3 of the written submissions, received from the Housing Executive during the Inquiry earlier this year, were omitted from Volume 2 of the Committee's report.

The 3 submissions headings are:

Home Renovation Grants

Houses in Multiple Occupation (HMOs) and Regulation of the Private Rented Sector (PRS)

Large Scale Voluntary Transfer (LSVT)

To be inserted following 'WRITTEN SUBMISSION BY: NORTHERN IRELAND HOUSING EXECUTIVE' page 22 and before 'WRITTEN SUBMISSION BY: THE NORTHERN IRELAND FEDERATION OF HOUSING ASSOCIATIONS' page 23.

Written Submission By:
Northern Ireland Housing Executive

2 April 2001

Thank you for inviting the NIHE to make a submission to the Social Development Statutory Committee on Private Sector Renewal --Home Renovation Grants.

This summary sets out the NIHE's views on the proposal to move from "Mandatory to a Discretionary system of Home Renovation Grants". I have set out in the main document the current provision and type of grants and I have also included Chapter 9 of a DETR Consultation Paper entitled "Private Sector Housing Renewal" issued in March 2001. This outlines the GB proposal for a major reform of the system.

The Importance of Home Renovation Grants

Successive House Condition Surveys have confirmed that Home Renovation Grants have played a major role in reducing unfitness. The 1996 House Condition Survey confirmed that, of the 24,000 dwellings that had moved from unfit to fitness in the previous five years, about 40% had done so with grant aid.

Whilst unfitness has been substantially reduced more needs to be done especially in rural areas and it should be noted that 4000 dwellings become unfit annually.

The NIHE therefore sees the continued need for financial assistance to help deal with repair and improvement.

What is the Difference between a Mandatory and Discretionary Grants System?

Essentially with a mandatory system, provided an applicant satisfied the Test of Resources and the property meets the unfitness criteria, a grant approval must be issued and the organisation essentially enters into a financial commitment which must, at some stage, be honoured. In the past this has led to queuing and rationing of approvals to match the available finance.

With a Discretionary Grants system the local Authority decides, within the legislative framework, what its priorities will be in terms of properties, area or individuals and targets grant aid on that basis. Grant aid is still, however, subject to test of resources.

In Northern Ireland the system is mainly mandatory, although a Discretionary Renovation Grant also exists to tackle dwellings in disrepair (but not unfit) in Housing Action Areas and to complement the Disabled Facilities Grant. The Discretionary Renovation Grant could be extended to other categories of dwellings in disrepair but it has not been done for reasons of budget availability and the need to target unfit dwellings.

In GB a Discretionary Grant system replaced the Mandatory system in 1996. Since its introduction Grants expenditure has fallen significantly, it has tended to be concentrated at area renewal and the predominant grant type used is the smaller Home Repair approval as opposed to full Renovation Grant.

What is Proposed in Great Britain?

The Consultation Paper issued in March 2001 and referred to earlier, proposes to replace the existing statutory grants system with a broad general power for local authorities to give financial assistance for home repair improvements and adaptations. Thus local authorities would have the power to design their own strategic approach to housing renewal. Assistance could be given in the form of grant, loan, loan guarantees and indemnity, provision of materials or labour, carrying out the work or providing relocation grants.

Options for Northern Ireland

The NIHE has identified four possible courses of action that could be taken in Northern Ireland.

Option 1 - Status Quo - Retain the Current Mainly Mandatory System

The present system has done much to reduce unfitness and is targeted at the worst properties and the poorest people. It also guarantees grant aid to those who qualify. The disadvantage is that, because of the available funding, it is not possible to target properties which are fit but in disrepair. The Mandatory system does not readily facilitate the targeting of areas of particular households.

Option 2 - Extend Strategic Targeting within the Existing Mandatory Grants System

This would permit the introduction of some targeting of the resources by extending the current Discretionary framework within the legislation whilst maintaining the Mandatory system. Thus we could target fit dwellings in disrepair and prevent them from falling into unfitness. Group Repair Schemes could be extended and particular groups, such as the Private Rented Sector or elderly, could be targeted. A pointing system which assessed applications by condition, age and financial circumstances could be devised to ensure resources were targeted at worst cases.

It needs to be recognised that, as long as resources remain at current levels, adopting this option would result in less money being available to tackle unfitness through Mandatory Grants, in order to fund dwellings which are in disrepair through Discretionary Grants.

Option 3 - Introduce a Discretionary Grants Scheme (Current GB Position)

This would remove all mandatory entitlement to grant aid except perhaps for Disabled Facilities Grant and Repairs Grants subject to the serving of certain Statutory notices. It would be for the NIHE, in conjunction with the Department, to establish a strategic framework within which it would invest to improve house conditions.

The framework would need to decide the balance between particular tenures, particular vulnerable groups, locations (rural/urban) area renewal and so forth.

Option 4 - Securing the Best Grants Scheme for Northern Ireland

The proposals for GB represent a very radical shift away from the statutory framework of the past towards a system where each local authority would have a general power to tailor its own approach to tackling poor housing conditions in it's own area. This, along with proposals to replace the current unfitness standard with much broader Housing, Health and Safety Rating standard, changes the approach of many decades.

NIHE's View

The proposed switch from Mandatory Grants to a Discretionary system stemmed from the Housing Policy Review 1996. At that time the proposal was intended to reflect the change to be introduced in GB. In Northern Ireland the case for switching from Mandatory to Discretionary had been made more compelling by the high surge in demand following the introduction of our own Mandatory Grants system in 1992. This had led to long queues and the build-up of a large financial commitment.

That said, it is important to recognise the very different Grants climate that exists today in Northern Ireland, where we have a robust Grants budget (£45m 2001/02) and an absence of lengthy queues. In view of this, the NIHE believes that the same dynamic for change does not exist today in the way it did when the proposal was first made 5 years ago.

It is the NIHE's view that it does not make sense to make the switch now and that a better Grants system could be tailored for Northern Ireland - a Grants system that

  • Meets the strategic housing needs of our local community
  • Harnesses the best from the GB experience and
  • Reflects the changes in unfitness standards

The NIHE believes there is compelling evidence to support this view.

  • The financial backlog has been cleared in Northern Ireland and the current level of funding means that grants are dealt with in a reasonable period of time.
  • GB is now proposing to move away from the current Discretionary system and to replace it with a system giving local authorities more power to design their own Housing Renewal Strategies and Policies.
  • The timescales involved within the Housing Bill means that, at best, it will not be enacted until Autumn of 2002.

To conclude, NIHE believes it would be more appropriate to develop a robust Grants system, tailored to meeting the housing needs of the Northern Ireland community. In the meantime, some minor change to grant regulations could be made which would give more discretion in dealing with Disabled Facilities Grants and Repair Grants for over 60s.

I am happy to meet the Committee to present the issues on Private Sector Renewal, or respond to any question that MLAs may have.

In the meantime I remain,

P McINTYRE
Chief Executive

Written Submission By:
Northern Ireland Housing Executive

2 April 2001

Thank you for inviting the NIHE to make a submission to the Social Development Statutory Committee on Houses in Multiple Occupation (HMOs) and Regulation of the Private Rented Sector (PRS), within the terms of reference that you have set down:

'To (1) examine current NI law and policy in relation to the above, conduct comparisons with the United Kingdom and the Republic of Ireland, summarise existing NI practice in relation to HMOs and the PRS; and (2) identify benefits/disbenefits of new proposals and produce a report.'

Section 1 - HMOs

The NIHE published its HMO Strategy in June 2000 and a copy is included as a major part of this submission. In the NIHE's view this HMO Strategy:

  • Gives a clear statement of the scale, distribution, condition and potential for growth within Northern Ireland's HMO market.
  • Examines the current legal framework here and elsewhere.
  • Identifies problems with the definition of a HMO.
  • Describes the progress that is needed in this sector of the market.
  • Details a series of strategic proposals to achieve our objectives.

The Housing Executive, as the Strategic Housing Authority for Northern Ireland, believes there are certain key issues that must be addressed in relation to this sector of the housing market. While I have included a summary of these below I would commend you to the details that are contained within the documents accompanying this submission.

What Principles should guide policy on HMOs?

The NIHE's approach to HMOs is underscored by:

  • the need to secure a diverse and well-managed private rented sector;
  • the need to secure that HMOs are safe and provide acceptable basic living conditions/management standards; and
  • the need to protect the most vulnerable sections of the community from exploitation by unscrupulous or uncaring landlords.

Is the current definition of a HMO adequate?

Within the Housing (NI) Order 1992 a HMO is defined as a "house, which is occupied by persons who do not form a single household".

In England it is intended to introduce legislation to clarify the definition. This is because in case law, over the years, the definition of what constitutes a House in Multiple Occupation has been examined. The net effect of this has been to create a level of ambiguity about the types of household/shared housing covered by the definition.

Publication of the Housing Executive's HMO Strategy in June 2000 was preceded by widespread consultation. The response to the consultation confirmed the need for a clearer definition of HMOs particularly to ensure that student-type shared lettings are included.

In this context the NIHE wishes to see the early introduction of more substantive legal powers through a broader legal definition of HMO that will provide legislative clarification of specific properties and tenancies currently excluded from HMO action.

This issue is dealt with in detail within the body of the NIHE's HMO Strategy.

Is the HMO sector in decline or growth?

HMOs represent an important element of the private rented market.

The NIHE estimates there are some 9,712 HMO properties, let by up to 2,000 landlords and housing nearly 30,000 people in Northern Ireland. These, in the main, are located in Belfast (particularly North Belfast and around the University Area), Londonderry and Portrush/Portstewart and are linked to the student housing market. Increasingly, however, there is a perceptible growth trend in the HMO market in district towns.

HMOs provide quick access to accommodation for groups such as single young persons, mobile workers, students and those who cannot or choose not to access home ownership. HMOs are also recognised as a key source of housing for people seeking long-term accommodation who are economically disadvantaged.

In Northern Ireland housing demand from single persons remains high and is projected to grow. Given that trend and changes in lifestyle patterns, the HMO sector is likely to grow while continuing to have an important role in meeting housing need, most commonly in the private rented sector over the next ten years.

What is the physical condition of HMOs?

The 1996 House Condition Survey indicates that HMOs are generally older, more unfit properties, with an unfitness rate of nearly 10% compared to the 7.3% unfitness overall. Of the 10% unfitness level almost half (45.7%) were self-contained flats. Over flat of all HMO units are in buildings built before 1919 and less than one-third were built after 1945. NIHE data shows that 1 in 3 HMO properties inspected fail to meet the specific fire safety and amenity standards that the NIHE has stipulated in relation to the number of occupants. On this basis it is estimated that about 2,200 properties currently operating as HMOs may require statutory action to enforce standards.

NIHE is concerned about:

  • the physical standard of accommodation in the HMOs sector particularly in relation to fire safety and lack of amenities; and
  • the management standards particularly in relation to overcrowding.

For the above reasons HMOs represent a comparatively low volume but high-risk sector of Northern Ireland's housing market.

How can HMO conditions be improved?

The NIHE uses Grants legislation as the main tool to tackle HMOs. An initial 10-year timetable has been established to action all HMOs. This will be subject to annual review based on the availability of finance.

The HMO Grants scheme directs mandatory grant aid at individual substandard properties. Increasingly however, given the concentration and expansion of HMOs, grant aid and enforcement activity will be adapted to a form of Area-based action. In effect HMO activity could become an effective form of strategic Area Action thereby limiting the prospect of urban renewal. The NIHE is developing an Area-based component within its HMO Strategy.

How can the management standards be improved?

Although most landlords in the HMOs sector are acting responsibly there exists a fringe of less reputable landlords who neglect maintenance or who set out to exploit tenants. Licensing schemes are regarded as a means to ensure that only fit properties enter the housing market, thus preserving the health and safety of those occupying the sector. The introduction of such a scheme to Northern Ireland could assist with the objective of promoting better standards in the sector.

Voluntary/Statutory Licensing of HMOs?

The DETR is currently evaluating the results of consultation on the introduction of a mandatory licensing scheme for HMOs in England. In Scotland a compulsory licensing scheme was introduced in mid 2000 and is being phased in.

In January 2001 the NIHE issued for consultation Proposals for the Introduction of a Voluntary Licensing Scheme for HMOs in Northern Ireland. The Voluntary Licensing Scheme would familiarise landlords, tenants and other key players with the concept of licensing in anticipation of a legislative licensing requirement within a future Northern Ireland Housing Bill.

While some landlords/agents have suggested that a Voluntary Licensing Scheme could deliver the same results as a Mandatory scheme would deliver the Housing Executive remains unconvinced. Proposals for the Introduction of a Voluntary Licensing Scheme are included with this submission and consultation ends in April 2001.

Can Housing Benefit Play a Role in Improving HMO Standards?

At present Housing Benefit is paid to a tenant if the eligibility criteria is met regardless of the condition of the property. Private Sector Housing Benefit is mainly paid directly to the landlord. In Great Britain the Government's policy aim is to

". develop Housing Benefit measures linked to our proposals for Mandatory HMO Licensing and selective licensing of private landlords. We believe that restricting Housing Benefit, or its direct payment to landlords, will prove an effective way to underpin a licensing regime in low demand areas and target the worst landlords."

How can HMOs that are brought up to standard remain so?

A programme of 200 annual management inspections is underway to ensure that properties, which have been made fit through grants, are being maintained to the NIHE's satisfaction.

The NIHE has also developed systems to effectively monitor the impact of its HMO Strategy.

How can 'best practice' among Landlords/Agents be harnessed?

The NIHE wants to build on the strengths of the sector, particularly its flexibility and ease of access, and continue to progressively tackle its weaknesses, particularly conditions and management.

The NIHE is currently seeking to raise awareness of the respective roles and responsibilities of the NIHE and landlords/agents by developing a close working relationship with them. This process will not only help the NIHE to improve its HMO services, but will also assist those well-intentioned landlords who have neither the time nor the knowledge to provide an adequate service.

How much will it cost to deliver a coherent HMO strategy?

Since 1995/96 up to the end of March 2001, a total of £13m had been spent on HMOs. A further £4.14m will be spent next year, while the HMO Strategy sets out the need for an annual commitment of £3m to fund its 10-year Strategy. Advancing this programme would require either an increase in funding or the skewing of the Grants budget in favour of HMOs at the expense of addressing unfitness.

One of the real challenges that will need to be addressed is how a Mandatory Licensing Scheme, which may require grant aid by the landlord, can be phased in over time and in line with available resources.

Conclusion

In summary, the NIHE would seek legislation to:

  • clarify the definition of a HMO;
  • introduce Mandatory Licensing;
  • link Housing Benefit payments to standards.

Section 2 - regulation of the private rented sector

The Minister had indicated his intention to bring forward proposals to transfer the regulation of the Private Rented Sector from the Department to the Housing Executive. This proposal is welcome and is consistent with the Housing Executive's role as the Strategic Housing Authority in Northern Ireland. The proposal will enable the Executive to take a more focused approach to promoting a diverse and well-managed private rented sector.

What Powers will Transfer to the Housing Executive?

The powers transferring to the Housing Executive flow from the Rent (NI) Order 1978 which applies to older properties at the lower end of the private rented sector. These powers are intended to ensure that rents reflect housing conditions and that tenants have a considerable degree of security of tenure. The Department currently has a statutory duty to maintain a register of rents payable under registered and restricted tenancies, and to make the register available for inspection. It is understood some 6,500 properties are on this register.

Are the Current Powers Adequate to Regulate the Sector?

The current legislation is the Rent (NI) Order 1978. It has been recognised that this legislation requires review and the Minister has set up a Review Group chaired by a Departmental Official. The terms of reference for the Review are included with this submission. The Housing Executive is represented on the Review Group.

What is the nature of the Private Rented Sector?

The 90's has seen a growth of the private rented sector from 20,000 to an estimated 30,500 dwellings. It is not a homogenous sector and consists of regulated and restricted tenancies (lower end of the market); uncontrolled furnished tenancies (including Houses in Multiple Occupation), the apartment/high cost market and new dwellings built/or let/resold NIHE dwellings (which is a recently emerging market).

In the main the sector comprises pre 1919 dwellings with high levels of unfitness (16.4%) and disrepair and occupied by poorer households. Whilst a small number of landlords hold large property portfolios, generally, the average landlord owns 5/6 properties.

What role does Housing Benefit play in the Private Rented Sector?

Since March 1998 there has been a significant growth in the number of private rented sector tenants receiving Housing Benefit (34,000 to an estimated 43,000 by March 2003). Currently £132m per annum is paid by way of Private Sector Housing Benefit (note that this includes Housing Association tenants). In Great Britain there is a debate on-going which would link Housing Benefit to condition and good management (see Section 1 on HMOs).

What issues are currently being addressed in the Private Rented Sector?

  • The NIHE has commissioned research into the Private Rented Sector which will pinpoint the precise demand and supply factors which influence the growth of the PRS. There are a range of factors that need to be taken into consideration including new household formation, investment strategies of key players from financial institutions to landlords, fiscal policies relating to all tenures, interest rates, deregulation of rents, decrease in the supply of public housing and shifts in single person occupancy, to shared housing, particularly for young people, and the growth and geographical spread of third level educational institutions.
  • There are indications that the availability of housing benefit in the PRS has also played a part in the upturn in the sector, and the structure of the scheme gives tenants no incentive to negotiate or shop around in relation to their housing expenditure. As a result rents have largely been paid at higher levels than in the public sector, thus possibly attracting an increase in investment. Landlords can also have rent paid direct, which has reduced the risk of collecting rents traditionally associated with the sector. However, the overall impact of Housing Benefit in the housing market, in general, and in the private rented sector, in particular, is not fully understood. The law is extremely complex and the role of rent officers in determining key definitions such as 'size criteria' 'exceptionally high' 'local reference rents' and 'locality' is central to the level of rents paid in a particular area. Similarly, the quality of service provided by the Housing Executive, in for example, the provision of information, meeting assessment and payment deadlines, has an impact on both tenants and landlords decisions.
  • A related issue is the problem of voids in Housing Executive dwellings. These are on the increase. Again the explanation for this phenomenon is complex. There are both push and pull factors operating. Push factors may include poor quality of the housing, the high levels of rents, or the perceptions of anti-social behaviour on the estate. Pull factors may include the quality of housing, whether or not it is furnished, environmental factors, the low levels of rents, or better transport facilities for work and shopping.

The NIHE research will focus on four key areas.

Economic Factors

What economic factors are driving the market? Which of the following are important?

  • the changing job market;
  • lending policies of financial institutions particularly new policies on buy to let;
  • the role housing subsidies have played particularly at the lower end of the market, through housing benefit, and recent changes to the legislation;
  • the role the house sales policy has on both the re-emergence of sold dwellings into the rented sector and declining availability in the public sector;
  • the incentives and disincentives for investors and landlords to enter and to remain in this sector.

Socio-demographic Factors

What socio-demographic factors are affecting the market? Which of the following are important?

  • the changing attitudes and lifestyles of younger people;
  • the rules and policies which prevent people obtaining other rented accommodation;
  • the inaccessibility to other types of tenure.

Comparative Factors

What lessons are to be learned from other housing markets which have expanded and how these may or may not be applicable to Northern Ireland? In addition are there lessons to be learned from different and similar legislative frameworks and professional practices?

Housing Benefit

What role does housing benefit play in sustaining the market, particularly at the lower end? In addition, what impact has the introduction of the scheme in 1983, and the legislative changes made since, had on the private rented sector?

Research Objectives

The central focus of the PRS research will be to provide information on factors accounting for the recent growth of the private rented sector as well as assessing the potential for further growth. Relatively little research has been carried out on this subject in the province and it will be the intention of this research to evaluate the role of the sector within the overall housing market. The overall aim of the research is to conduct a study of the private rented sector in Northern Ireland. There are six objectives.

1. To provide a doctrinal analysis of the law relating to the private rented sector in Northern Ireland.

2. To provide a comprehensive profile of the private rented sector in Northern Ireland based on a secondary analysis of selected databases and to provide an analysis of the changing form of the sector over the last decade.

3. To help to identify the economic, social and demographic factors which are driving the sector.

4. To identify the forces which stimulate and retard growth in the various component parts of the sector.

5. To assess the role of Housing Benefit in the demand and supply side of the private rented sector.

6. To determine the role of the private rented sector within the total housing market in Northern Ireland.

7. To assess the potential for growth in the sector and the forces which might drive this.

Conclusion

In summary therefore the Housing Executive's view is:

  • The transfer of the regulation function to the Housing Executive represents a necessary first step in the approach to the Private Rented Sector.
  • The Review of the Rent Order (NI) 1978 is welcomed.
  • This together with the research commissioned by the Housing Executive and the views obtained by the Committees work will provide the basis for developing an overall strategy for the Private Rented Sector.

I am happy to meet the Committee to present the issues on Houses in Multiple Occupation and the Private Rented Sector or respond to any questions that MLAs may have.

P McINTYRE
Chief Executive

Written Submission By:
Northern Ireland Housing Executive

20th April 2001

Large Scale Voluntary Transfer (LSVT)

1. Thank you for inviting the Housing Executive to submit evidence to the Committee which is undertaking an inquiry into Large Scale Voluntary Transfer.

2. It is our understanding that the powers that the Department intend to take in respect of large Scale Voluntary Transfer are permissive. It is also our view that they are based on the Housing Policy review carried out in 1995. Circumstances have moved a long way from then both in terms of Northern Ireland (not least of which is the existence of a devolved administration) and in terms of England where in particular the Labour administration is making significant additional resources available for public investment in housing and is also willing to consider options other than Large Scale Voluntary Transfer. The different solutions being adopted by devolved administrations in Scotland and Wales may be of interest to the Committee.

3. There is a considerable amount of published material on Large Scale Voluntary Transfer (and alternatives). It is not the intention to cover all of these in this submission. I have included at Appendix 1 the Government's views on the social rented stock as set out in the Green Paper on Housing published in the Summer of 2000 and its response to consultation published in December 2000 (Appendix 2). I have also included a bibliography of key papers on LSVT and other models (Appendix 3).

4. The Committee is aware that the Committee for Finance and Personnel is carrying out an inquiry into Public/Private partnerships for the provision of various Public Services. The Housing Executive has responded to this and I believe this to be relevant to the Committee's deliberations on LSVT. A copy of the submission is included (Appendix 4).

5. This letter covers the key issues associated with Large Scale Voluntary Transfer.

6. What is LSVT?

"Large Scale Voluntary Transfer" is the disposal of local authority housing stock to an existing or new Registered Social Landlord - in effort to a landlord who will be subject to regulation.

7. What is proposed in the forthcoming Housing Bill in relation to LSVT?

Current legislation already permits the transfer of social housing stock in Northern Ireland subject to the agreement of all tenants affected by the transfer. The Department of Social Development proposes to legislate to remove a single tenant veto and instead make provision for any transfer to be subject to the agreement of the majority of tenants. This will bring Northern Ireland into line with the rest of the United Kingdom.

8. What is the background context to LSVT?

LSVT was initially introduced in Great Britain as a means to attract private investment to address a £22bn housing repairs backlog. This form of private investment does not impact on government borrowing.

More recently Government has set LSVT in the context of:-

  • the need for local authorities to concentrate on their strategic role by withdrawing from their operational role
  • offering greater opportunities for tenant involvement and
  • creating a more diverse range of providers.

9. What criteria govern LSVT?

Government has created a funding pool to finance the LSVT programme. This was essential because some local authority stock has a negative value (the loan debt is greater than the value of the stock).

To be admitted to the transfer programme key selection criteria have been set by Government. These cover:-

  • evidence of support amongst tenants for the proposed transfer
  • whether the proposal is a coherent part of the local authority housing strategy
  • whether the transfer provides value for money and
  • whether it will deliver better services for tenants and greater participation by tenants.

10. What rules govern LSVT?

In order to submit an LSVT proposal for inclusion in the programme a local authority must provide:-

  • rationale for disposal
  • calculation of public expenditure costs
  • details of repair/improvement costs over 30 years
  • existing debt and redemption premia
  • transfer price
  • confirmation rents will conform to government proposals for the future direction of social housing rents
  • proposed transfer structure (limiting each new landlord to 12,000 units maximum).

Where an overhanging debt would remain the local authority would seek Government funding through a one-off grant.

Where the receipt from a disposal is greater than the outstanding loan debt a levy (20%) is payable to Treasury by the local authority.

11. What level of LSVT has taken place?

Some 400,000 properties have been transferred under LSVT since 1988. The annual transfer programme has been set at 200,000 units against a total local authority stock of over 3 million.

12. What other approaches are available?

Government has acknowledged that "even at an enhanced rate of stock transfer the amount of housing remaining in local authority ownership will be significant for many years".

The housing policy statement within the Green Paper "Quality and Choice: A decent home for all" points to a range of options apart from transfer which local authorities may use for future investment in their stock:-

  • continued direct management by the authority using additional resources (capital investment in housing has doubled since 1998).
  • the Private Finance Initiative to bring in private resources to improve particular sections of stock.
  • arms length arrangements under which an authority separates its function as a housing landlord from its strategic role.

In addition some local authorities are investigating the prospect of borrowing against their rental stream (securitisation model) but this has not received DETR approval.

13. What are the main features of arms length arrangements?

An arms length arrangement means setting up a company (limited by guarantee) controlled by the local authority, to perform its landlord function. In effect the stock remains in the ownership of the local authority, tenants remain secure tenants of the Local Authority and retain the right to buy their property. Provided the company receives a "very good" rating by the Housing inspectorate it may submit a bid for additional resources.

Government has set up a special fund for such companies which would provide an average £500 per dwelling which could support borrowing of some £5,000 per dwelling. The borrowing counts for capital control purposes. In addition capital receipts from disposals would be available to it.

While it is a matter for authorities to determine which functions to delegate to the company Government guidelines suggest local authorities should retain responsibility for homelessness, housing benefit and some other services considered strategic.

14. What do other Regional Assemblies propose?

The Welsh Assembly has approved "A Framework for a National Housing Strategy for Wales". The framework does not promote a specific option to deal with the £1bn backlog in repairs. Instead it states

'all methods of securing additional investment in local authority housing from private finance sources consistent with current Public Sector Borrowing Requirement rules are being considered'.

In Scotland between 1997 and 2001 net public sector expenditure on housing increased by 40%. At the same time the Assembly's Housing Green Paper has promoted "community ownership". Community ownership would normally result from the transfer of existing public sector rented housing to alternative community landlords under arrangements, which ensure that:-

  • housing is owned by a non-profit making body on which there is tenant, local authority and community representation
  • effective tenant involvement in key decisions
  • housing is let at affordable rents and
  • there are guarantees for transferring tenants.

Around 50,000 properties have been transferred and some local authorities, Glasgow in particular, are currently pursuing the "community ownership" model.

15. What are the key issues for Northern Ireland?

The "tests" for various options including the status quo relate to:-

Separation of the strategic from the operational role

Since social housing stock is managed by the Housing Executive as opposed to each Council the requirement for this separation could be questioned, particularly given the relative scale of Northern Ireland. In addition it could be argued that the mixed strategic/operational role in Northern Ireland has been successful.

Greater tenant empowerment/involvement

The Board of the Housing Executive provides various forms of representation although it is acknowledged there is no statutory form of tenant representation. In addition the tenant involvement framework and compacts provide for direct involvement at operational and policy level by tenants (and indeed other residents). Such involvement and participation is also extensive in urban renewal areas and in those neighbourhoods which are subject to an estate strategy.

Tenant willingness to transfer to other Landlords

The limited research carried out by the Housing Executive suggests that tenants are satisfied with the Executive as landlord and it may be difficult to secure agreement to transfer.

Better services for tenants

Existing benchmarks against other housing authorities have shown the Housing Executive to offer highly cost effective services although with room for improvement. Whether or not alternative structures would provide better services must be seriously questioned particularly since the statutory responsibility for some services would remain with the Housing Executive under each of the options.

Smaller scale Landlords

While a case can be made for landlords with limited housing stock (say 12,000) this must be set against the resultant fragmentation of services, complications and confusion in seeking to 'join up' services and higher overhead costs. In addition it is noteworthy that amalgamations among smaller Housing Association landlords in England is becoming more common in order to effect economies of scale. The "purchasing power" of larger authorities would therefore be lost under a fragmented arrangement.

Securing additional finance

There is no doubt this is a key driver for those local authorities with massive improvement and repair backlogs. While backlogs exist in Northern Ireland continued investment has maintained them at a lower level. Indeed it could be argued that backlogs exist because significant housing funds have been diverted into other strategic non0landlord priorities, not least 'urban renewal' and 'care in the community'. In its broadest sense therefore existing investment is contributing to a wider agenda in Northern Ireland. Nevertheless the requirement to seek additional finance from whatever source remains.

16. Current Position

The Department for Social Development and Housing Executive have jointly commissioned a preliminary investigation into the various options.

"To carry out a preliminary evaluation in legal, service delivery and financial terms of existing and emerging models for the ownership and management of social housing stock in Northern Ireland."

Scope of Study

The specific models to be evaluated are:-

  • Existing structure (with facility to borrow privately)
  • Arms length arrangement(s)
  • PFI
  • Stock transfer and
  • Any other models emerging in other Regions.

The evaluation should consider:-

Legal

The extent to which the model requires legislative change and the nature of that change, and the implications for tenants rights and opportunities to participate.

Financial

The financial implications in terms of:-

  • Rents
  • Disposal value
  • Breakage costs
  • Capacity to borrow
  • Funding requirements
  • Implications for loan charges
  • Implications for NI block
  • Likely reaction of private finance market.

This should be undertaken using methodologies set by DETR (although stock condition, investment requirements and valuations should be based on information which is readily available) and presented in the form of a financial model.

Service Delivery

The general implications in terms of the cost, distribution and standards of service delivery under each model; and the consequences for employees.

17. Impact of LSVT on the role of the Executive

It is our view that the future role of the Executive will be influenced by a variety of factors other than LSVT. these include:-

  • The best way of funding investment needs
  • The proposed review of public administration
  • The emergence of a political view about is future role

18. However it is clear that there are key functions/activities which are required to be delivered within the Housing system in Northern Ireland. These are:-

Strategic Role

  • Housing Research
  • Housing Standards
  • Lettings Scheme
  • Housing Plans
  • Area/Local Strategies
  • Home Energy Conservation
  • Housing Regeneration Strategy
  • Housing Benefit system
  • homelessness
  • Supporting People Strategy

Investment Role

  • Investment Planning (inc Newbuild)
  • Setting Investment Priorities
  • Programme Plans and Management (inc Newbuild)

Regulation Role

  • Private Rented
  • Housing Association
  • Social Renting
  • Performance Standards
  • Inspection
  • Performance Reporting

Provider role

  • Newbuild
  • Landlord role
  • Programme delivery

19. In conclusion therefore LSVT is one model amongst others which have emerged since 1995 in Great Britain. It is clear that in both England and in the devolved administration in Wales and Scotland other models are being pursued. The conditions which exist in Great Britain in terms of substantial investment backlogs do not exist in Northern Ireland where the social rented stock is in relatively good condition. However there is a backlog but more importantly there is a need for continued reinvestment in the stock. Whether or not this can be funded from within public sector resources will be a key determinant of the best model.

The existence of a strong single strategic housing authority for the Province brings many strengths, economies of scale and accountability, which could be easily lost in the fragmented structure which LSVT would produce. It is also becoming apparent that the challenge of tackling urban regeneration and neighbourhood renewal and the mix of public and private investment required would be difficult to achieve in the type of fragmented structure which might arise from LSVT. Finally the Executive jointly with the Department is reviewing the investment needs and the implications of various models. We believe this will be an important input to the debate.

P McINTYRE
Chief Executive

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