High Court Dismisses Social Landlords Appeal Against Refusal to Make a Possession Order

On 25 September 2018, Mr Justice Birss dismissed an appeal by Curo Places Limited against the decision of HHJ Matthews of 7 March 2017 in which the judge refused to make a possession order on grounds of breach of tenancy and anti social behaviour that was being sought in respect of a vulnerable and disabled tenant.

Following a two day trial in March 2017 HHJ Matthews held that it was not reasonable to make a possession order against Ms Walker having regard, amongst other things, to the poor sound insulation in the property and the mental health conditions of the tenant. The judge also found that a defence based on disability discrimination contrary to the provisions of the Equality Act 2010 was made out.

Curo (the landlord) appealed against the decision of HHJ Matthews and argued that the judge was wrong to find that he was not bound by a conviction (the particulars of which were unspecified), failed to properly consider the effect of the tenant’s behaviour on her neighbours, erred in his approach in relation to issues concerning sound insulation in the property, was wrong to entertain the Equality Act 2010 defence when this was not pleaded and reached a decision that was perverse. Each of these grounds were rejected by The Honourable Mr Justice Birss who held that the basis for the appeal involved a mischaracterisation of the judgment of the court below and that the judge had properly carried out the assessments he was required to and was not plainly wrong in coming to the decision that he did.

A copy of the full judgment of the appeal can be found here: https://www.bailii.org/ew/cases/EWHC/QB/2018/2462.html

The successful tenant and respondent to this appeal was represented both at trial and on appeal by Russell James of Magdalen Chambers

The Court of Appeal Gives Judgment in Fundamental Dishonesty Case

On Monday 30 October 2017 the Court of Appeal gave judgment in the case of Howlett v Davies [2017] EWCA Civ 1696, which concerned the issue of fundamental dishonesty for the purpose of removing the costs protection provided by Qualified One Way Costs Shifting (‘QOCS’). Rule 44.16 of the Civil Procedure Rules provides the exceptions to the costs protection provided by QOCS and specifically provides in relation to fundamental dishonesty as follows: “Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probability to be fundamentally dishonest.”

The facts of the case are of limited relevance but in brief concerned a claim by a mother and son that they had been passengers in a vehicle that had reversed into another stationary vehicle. They alleged that they had suffered injury and sued the driver of the vehicle they claimed to have been a passenger in. The driver of the vehicle they were in also gave evidence supporting the case of Mrs Howlett and her son.

At the start of the trial counsel for the Howletts attempted to get the defence struck out on the ground that the defendant insurers should either allege fraud (which they didn’t) or accept that the accident occurred as alleged with the consequential injuries. It was contended that the Howletts “should not be allowed to sit on the fence”. The application to strike out was dismissed and the fast track trial (taking 4 days) proceeded. At the conclusion of the trial the deputy district judge found that there was fundamental dishonesty, dismissed the claims and allowed the defendant insurer to enforce their costs. The Howletts appealed firstly to HHJ Blair QC who dismissed their appeal and then secondly to the Court of Appeal resulting in this judgment.

2 principal points of importance arise out of this decision of the Court of Appeal (judgment of Newey LJ with whom LJJ Lewison and Beatson agree).

Firstly, the Court of Appeal approve the meaning of fundamental dishonesty given by HHJ Moloney in the County Court decision of Gosling v Hailo (2014) in which he said:

“It appears to me that when one looks at the matter in that way, one sees that what the rules are doing is distinguishing between two levels of dishonesty: dishonesty in relation to the claim which is not fundamental so as to expose such a claimant to costs liability, and dishonesty which is fundamental, so as to give rise to costs liability.

The corollary term to ‘fundamental’ would be a word with some such meaning as ‘incidental’ or ‘collateral’. Thus, a claimant should not be exposed to costs liability merely because he is shown to have been dishonest as to some collateral matter or perhaps as to some minor, self-contained head of damage. If, on the other hand, the dishonesty went to the root of either the whole of his claim or a substantial part of his claim, then it appears to me that it would be a fundamentally dishonest claim: a claim which depended as to a substantial or important part of itself upon dishonesty.”

Secondly, the Court of Appeal dealt with the main issue in this case, which was whether or not a defendant insurer had to expressly plead fundamental dishonesty in order for there to be such a finding. This was answered in the negative with Newey LJ stating as follows:

“I do not think an insurer need necessarily have alleged in its defence that the claim was “fundamentally dishonest” for one-way costs shifting to be displaced on that ground. Where findings properly made in the trial judge’s judgment on the substantive claim warrant the conclusion that it was “fundamentally dishonest”, an insurer can, I think, invoke CPR 44.16(1) regardless of whether there was any reference to fundamental dishonesty in its pleadings.” (Paragraph 32).

This news article is written by Russell James of Magdalen Chambers who appeared earlier this year in a successful County Court appeal on a fundamental dishonesty point

Magdalen Chambers are again ranked as a leading set by the Legal 500

Magdalen Chambers is thoroughly delighted to announce that for the fourth successive year we have been rated as a leading set on the Western Circuit by the prestigious Legal 500 directory. The authors mentioned chambers specialism in civil and family law, and our key practice areas of family finance and public children law matters.

They say the family team at Magdalen Chambers is ‘very strong with respect to financial and children work’. In public children law matters, the set has seen a recent increase in instructions involving sexual abuse and non-accidental injuries. They also praise chambers for being equally adept in planning, commercial and insolvency matters”, and for our expertise in property law.

In addition to chambers leading set ranking, 9 individual members were praised by clients for their work in their respective fields, and ranked in tier 1 on the Western Circuit for their expertise.

The editors of the Legal 500 singled out the following areas of law as being particular strengths of chambers’ practice:

  • Commercial, Banking, Insolvency and Chancery Law;
  • Construction, Planning and Environment;
  • Family and Children Law;
  • Personal Injury and Clinical Negligence;
  • Property Law

The members of chambers individually recognised by the directory as being in the top tier of practitioners are:

  • Joint Head of Chambers Michael Berkley for Commercial, Banking, Insolvency and Chancery law, and is described as “A robust advocate with a very good bedside manner” and for his work in Property law they say “Clients are reassured by his confident demeanour”.
  • Joint Head of Chambers Christopher Naish in the field of Family and Children law was described as “Very intelligent, calm, personable, courteous, analytical and thorough”
  • Rupert Chapman, Head of the Family team, was “Recommended for financial remedy cases and private law children matters”
  • Tony Ward recognised for his expertise in family work is also described as “Very experienced in financial disputes”.
  • Head of the Regulatory, Public and Administrative team, Gavin Collett was ranked in tier one, with the editors mentioning that “His practice encompasses planning, highways, and rights of way” and that “he made a successful challenge to the Secretary of State in the High Court”
  • William Hopkin, who heads up the Commercial team, was praised for being “Extremely able at assimilating complex information quickly”
  • Head of the Civil team, and leading property barrister, Russell James was described as having “a niche practice in homelessness law”
  • Carol Mashembo, a senior member of the family team, recognised in tier 1, has been described as “Experienced in cases involving same-sex families”.
  • Jonathan O’Neill was praised as “A specialist in personal injury matters” and for his expertise in property law as “An impressive cross-examiner”

In addition to the plaudits received by chambers’ members, two of our clerking team are mentioned in this years’ publication. Senior Clerk, James Basden and civil clerk Harry Turner were praised by clients for providing “a very effective personable service and are also very commercial in terms of fees” and that solicitors would “thoroughly recommend them”.

The Homelessness Reduction Act 2017, initial thoughts

Last week, the Department for Communities and Local Government reported an increase of 33,000 children being housed by councils in temporary accommodation since mid-2014, representing a rise of 37%.  This equates to an average of 900 extra children each month.  In the circumstances, it is easy to appreciate why the department has described the situation as ‘unsustainable’.

Without wishing to add further to the concern, it is difficult at this juncture not to reflect upon the 2017 Homelessness Monitor, which suggested that 50% of councils and, alarmingly, 95% of London boroughs reported that it was ‘very difficult’ to assist homelessness applicants to secure self-contained accommodation.  In this vein, 65% of boroughs cited a near-crippling shortage of available housing stock, although it is apparent that surging rental prices and the current state of the welfare benefits system have played their role, also.

In the circumstances, it seems like a good time to reflect upon the “impending” Homelessness Reduction Act 2017 (“HRA”).  The statute, which received assent in April 2017 and expects commencement at some (currently unspecified) point during 2018, started life as a private members’ bill catalysed out of campaigning by Crisis with support from Shelter.  As a Bill, its explanatory notes cited as a policy background that [t]he number of homeless households in England is increasing.  57, 750 households were accepted as statutory homeless and in priority need in 2015/16, up 6% on a year earlier.  The total numbers in temporary accommodation are also rising.  Local housing authorities took action to prevent homelessness for 50,990 households in April to June 2016, up 4% from 48,820 in April to June 2015.’  The guidance further acknowledged the limitations presented by restricting duties owed to applicants assessed as being in ‘priority need’, with the inevitable corollary that ‘those who do not meet the threshold for ‘priority need’ often receive little support.

Heralded by Shelter as ‘the first major piece of homelessness legislation for 15 years’, the main thrust of the Act will be to amend Part 7 of the Housing Act 1996, whilst also amending the Homelessness (Suitability of Accommodation) (England) Order 2012, by imposing duties on local housing authorities to ‘intervene earlier and take steps to prevent homelessness in their areas’, regardless of priority need or intentional homelessness.  The hope is that this will lead to a reduction in homelessness, whilst achieving financial savings for local authorities.

The statute’s starting point in this respect is to amend section 175 of the 1996 Act.  The amended s. 175(4) and (5) provide that a person will be threatened with homelessness if it is likely that (s)he will become homeless within 56 days, doubling the previous 28 day period and meaning that local authorities must work with people to prevent homelessness at an earlier stage.  Notably, the provision makes clear that the service of a section 21 notice, which expires within 56 days, will engage the duty.

The amended section 179 of the 1996 Act remodels local authorities’ “advisory services”, stipulating that each authority must provide or secure the provision of a freely available service, to advise upon preventing homelessness; securing accommodation when homeless; the rights of persons who are homeless or threatened with homelessness, and the duties of the authority; any help that is available from the authority or anyone else, for persons in the authority’s district who are homeless or may become homeless (whether or not they are threatened with homelessness); and how to access that help.  Subsection (2) et seq provides far more detail, which will add focus and scope to the advisory process.

As above, a core feature of the HRA is to improve the support that is available to applicants who have either made themselves intentionally homeless, or are not considered to be in priority need.  This is addressed by the newly imposed section 189A, which requires an authority to carry out an assessment and produce a personalised plan in respect of all applicants who are homeless or threatened with homelessness, and are eligible for assistance.

The new section 195 imposes a “prevention duty”, which will apply to all eligible applicants threatened with homelessness and will require that an authority ‘must take reasonable steps to help the applicant to secure that accommodation does not cease to be available for the applicant’s occupation’.  Notably, the duty is ‘to take reasonable steps… to secure’.

The duty will typically run for 56 days and may end in accordance with subsection (8): suitable accommodation has been provided and there is a reasonable prospect of continued occupation for a period of 6-12 months; 56 days have passed, regardless of the applicant’s circumstances (but subject to a section 21 notice being served); the applicant has become homeless (in which case, move on to the new section 189B duty); the applicant has refused an offer of suitable accommodation; the applicant has become homeless intentionally from accommodation that was made available pursuant to the exercise by the authority of its section 195(2) function; eligibility has otherwise ceased; or the applicant has withdrawn the application.  A failure to cooperate will also terminate the duty.

Section 189B applies to applicants who are already homeless and provides that an authority, having regard to its section 189A assessment, must ‘take reasonable steps to help the applicant to secure that suitable accommodation becomes available for the applicant’s occupation for at least… 6 months, or… such longer period not exceeding 12 months as may be prescribed.’  This will, therefore, push back the section 193 duty by 56 days.  As with section 195, there are circumstances in which the duty might be ended, as to which sections 189B(7) and (9) should be consulted (n.b. that such a decision would be susceptible to challenge by section 202).

Whilst statutory guidance is yet to be published, as is the code of practice that is referred to within the amended section 214A, it nevertheless seems that both sides of the housing law table anticipate positives arising out of the legislation.  Indeed, any sensible measures taken to reduce the number of people living without a home can only ever be a cause for celebration.  However, a considerable concern amongst local authorities faced with the prospect of implementation, aside from the obvious transitional and interpretative hurdles, will clearly pertain to funding.  It is axiomatic that for the aims of the statute to be realised to full effect, there must be sufficient funding in place.

For instance, the Local Government Association anticipates that the imposition of the prevention duty, alone, will increase the workloads of London boroughs by circa 270%.  The Association of Housing Advice Services has suggested that the financial burden to the boroughs will rest in the region of £160m.  Palpably, neither concern is likely to be dampened by the government’s promise of an additional £48m in funding (available only for the first two years following implementation), or the hope that savings might adequately offset costs before the two-year period expires.  Whilst the additional funding may well hep authorities to “hit the ground running”, they will surely be hoping that the short-term cash boost will be followed by an effective post-implementation review of funding, resources and stock, as promised by communities’ secretary Sajid Javid.

As for the costs that are likely to arise out of issues of construction and initial implementation, authorities might expect a surge in challenges to their interpretation of eligibility, “reasonable steps” and “help to secure”; and in cases of refusals to accept offers of accommodation and alleged non-cooperation.  Again, it is hoped that the anticipated explanatory notes and code of practice should help to iron out at least some of those potential areas for conflict.

Jonathan O’Neill

July 2017

Jonathan is a barrister who specialises in housing law, with particular expertise in disputes concerning possession, demotion, public law principles, human rights, equality, antisocial behaviour, injunctions, tenancy deposits, disrepair, breach of tenancy agreement and unlawful eviction.  He can be contacted via his clerk, on 01392 20 84 84.

This article has been prepared and published as a discussion document and is not to be relied upon as a source of legal advice.

 

 

Fixing or Failing

A Review of the key points in the Government’s White Paper:
“Fixing our broken housing market.”

In the UK today there is a growing disparity between house prices and income.  This disparity has in turn to a doubling of the population living in the private rented sector since 2000. Teresa May’s Government signposted the solution as providing more homes which in turn it was said will lead to a reduction in the cost of renting. In February 2017 the Government issued a white paper with the intention of addressing the increasing disparity.

The main question to be addressed is what is causing the lack of new housing being brought forward in the UK today.  Government figures show that over 40% of local planning authorities (LPA’s) do not have a plan to provide sufficient housing that meets the projected growth in number of households within their area.  Developers claim that they cannot build these homes because LPA’s have restrictive planning policies that inhibit development.  Both sides of the argument blame the other but is it that simple?  Probably not.

Since March 2012 when the bombshell that was the National Planning Policy Framework (NPPF) was dropped developers have been able to point to paragraph 49 of the NPPF which states that:

“49. Housing applications should be considered in the context of the presumption in favour of sustainable development. Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites.”

So where an LPA cannot demonstrate an up to date five-year housing land supply, policies intended to control such development can be said to be out of date, even if that particular local policy has only been implemented in the very recent past.  As the developers state, without conflict with policy development should be permitted “unless other material considerations” dictate otherwise.  This has lead to a number of planning applications in areas defined in Local Plans as unsuitable but which represent prime locations for development.  So why have the floodgates not opened and a plethora of new houses been provided?  Perhaps, because the problem is not that simple.

Even if permission is granted it does not ensure that the development will then come forward promptly or even at all.  The annual completions versus permissions graph found on page 13 of the White Paper shows the increasing gap between permissions granted and those actually completed from a low in 2009-10 growing year on year from just over 150,000 to over 250,000 in 2015-16.  Comparatively, completions have only risen from just over 100,000 to just over 150,000 in that same period.  This is echoed in the July 2016 Government figures, which showed that while there were 684,000 homes with detailed planning permission granted, building work had started on just 349,000 homes.

Many reasons are put forward by all sides for this; developers point to onerous pre-conditions while LPA’s point to “land banking” of such permissions by developers while the market is stagnant.  The simple truth is probably that a number of reasons exist for the failure to bring forward and develop sites.  There are probably almost as many reasons for the failure of current housing policies as there are sites!

Something had to be done, on that almost all sides were agreed and so the Government having consulted has now brought forward the White Paper, “Fixing the broken Housing Market, February 2017, which contains a number of proposals to ‘fix’ the problem.  These proposals have been grouped into four headings or ‘steps’:

Step 1: Planning for the right homes in the right places.

Step 2: Building homes faster.

Step 3: Diversifying the market.

Step 4: Helping people now.

[Below I have raised some of the topics covered by each of these ‘steps’ but these notes reflect only a selection of the issues raised and are not intended to be exhaustive.]

 

Step 1: Planning for the right homes in the right places.

The Government has realised that as a result of paragraph 49 (see above) development in many areas is coming forward in locations that are not desirable to, either LPA’s, or the local population or ‘neighbourhood’.  This has to be tempered by the undeniable argument that more housing is required in most areas.  It is often said that the age of “N.I.M.B.Y.” (Not in my back yard), has been replaced by “B.A.N.A.N.A.” (Build absolutely nothing, anywhere, near anyone).  This stance of no development simply does not provide the homes the Nation requires for the future.

Since the 1970’s there have been on average 160,000 new homes per year but the consensus now is that we need between 225,000 and 275,000 new homes per year to keep up with population growth and to start to tackle the deficit created by years of under supply.

The argument that there is no space or that the country is “full” is simply not true. It is estimated that only 11% of England has been built on.

So we need new homes but we need them in the right places.  The White Paper attempts to tackle this issue in the following ways.

Plans & Neighbourhoods

In the White Paper the Government proposes to ensure that all LPA’s have up to date plans by enacting a requirement that all Local Plans be reviewed “at least once every five years.” Now this seems sensible but what will constitute a “review”? Does this mean an in depth review of all policies within a Local Plan or only those that have been called into question.  In the White Paper it states:

An authority will need to update their plan if their existing housing target can no longer be justified against their objectively assessed housing requirement, unless they have agreed a departure from the standard methodology with the Planning Inspectorate.”

However further on in the document it states that:

“1.13 The Government will, therefore, consult on options for introducing a standardised approach to assessing housing requirements. We will publish this consultation at the earliest opportunity this year, with the outcome reflected in changes to the National Planning Policy Framework.”

So any LPA currently under achieving in this area would be well advised to await developments as the goal posts in this area are clearly under review if not actually moving.

The White Paper also intends to make Local Plans easier to produce.  What the text actually says is that while LPA’s should ensure that all of their area is covered by a plan, Government intends to remove the requirement that this should be under a single plan.  Following the proposals in the Neighbourhood Planning Bill it would seem that the intention is that a single LPA could have a series of Local Plans covering different areas.

How this will work in practice remains to be seen.  Clearly areas set within the open countryside and those with limited Urban development may find it easier to “go it alone” than await input from the towns and cities where development issues maybe more pronounced.  Will that mean that there will be a race to produce such plans and thereby not be left with the burden of undesirable development? Time will tell.

Under the heading “Making enough land available in the right places” the White Paper attempts to deal with the biggest planning issue in modern times.  However the proposals contained within it are somewhat vague. They expect LPA’s to have a strategy to maximise the use of suitable land including re-utilising brownfield land placing more homes on public sector land, but these aims seem merely to reflect that which is already largely contained within the NPPF.  It continues with a stated aim of supporting small and medium sized sites especially within the rural community but again this merely echoes the main thrust of the NPPF for sustainable development.  Green belt protection is echoed and so is the requirement for neighbourhoods to have a greater say through neighbourhood plans.  Since over 270 neighbourhood plans have come into force since 2012 this is hardly ‘news’ or indeed a new solution to the existing problem.

Perhaps the only real development seems to be a wish to use land more efficiently.  As the White Paper states:

“1.51 Not all development makes good use of land, especially in areas where demand is high and available land is limited. London, for example, is a relatively low-density city especially in its suburbs. When people picture high-density housing, they tend to think of unattractive tower blocks, but some of the most desirable places to live in the capital are in areas of higher density mansion blocks, mews houses and terraced streets.” 

Whether this will represent an appropriate approach in more rural and regional centres is unclear.

In dealing with the possible biggest issue contained within the White Paper it appears that at present the issue is neither dealt with nor ignored.  The identification of the problem has occurred sometime ago the issue has always been ‘what is the solution’.

[The White Paper also states under this section that the Land Registry also intends to achieve comprehensive land registration by 2030.  One suspects that the Lands Tribunal will be busy for some years to come.]

 

Step 2: Building homes faster.

Under this section the White Paper does contain some distinct proposals.

Firstly it is proposed that the Government will amend the NPPF to give local authorities the opportunity to have their housing land supply (HLS) agreed on an annual basis, and then fixed for a one-year period. This is a positive and useful step for all concerned in housing supply.  Too often the failure of one scheme or a large windfall of housing can wrong foot either a developer or LPA at the last moment.  This leads to considerable indecision and a waste of costs on all sides.  Fixing the HLS for the year will at least provide all parties with a degree of certainty that can enable proper consideration of emerging sites.

Also where the White Paper clarifies and endorses the Written Ministerial Statement of 12th December 2016, that “where communities plan for housing through a neighbourhood plan, these plans should not be deemed out-of-date unless there is a significant lack of land supply for housing in the wider local authority area.”  Thus those areas that provide more than their fair share of new homes should not be penalised for failures of neighbouring areas.

In terms of the costs of planning there is definitely a sting in the new White Paper.  LPA’s will now be able to increase their fees by 20% from July 2017 if they commit to invest the additional fee income in their planning departments. The Government may also allow an increase of a further 20% for those authorities who are delivering the homes their communities need.  By which it is assumed that those LPA’s that have a 5 year HLS may be allowed to increase their charges by 40%!  Certainly the White Paper is welcome news for many beleaguered LPA planning departments.

Also the hitherto free access to planning appeals may be removed. The Government intends to consult on introducing a fee for making a planning appeal. One option being proposed would be for the fee to be capped, for example at a maximum of £2,000 for the most expensive route (full inquiry). All fees could be refunded in certain circumstances, such as when an appeal is successful, and there could be lower fees for less complex cases.

The White Paper also seeks to tackle the delay in planning permissions being implemented due to onerous pre-commencement conditions.  It suggests that in future pre-commencement conditions can only be used with the agreement of the applicant.  This seems to suggest that unless such a condition is being proffered by the developer such conditions are unlikely to be able to be applied by LPA’s.

The Government through the White Paper will also seek to simplify obligations under the Community Infrastructure Levy (or CIL as it is more commonly known).  What these ‘reforms’ are to be we are not told but apparently an announcement will be made in the Autumn Budget 2017.

Perhaps the biggest change to the forward delivery of housing is contained within the sections on “Sharpening local authority tools to speed up the building of homes” (para.s 2.39-2.46) and the ‘Housing delivery test’ (para.s 2.47-2.51).

Under the first of these, (the LPA’s tools), the Government intends to amend national planning policy to encourage LPA’s to consider how realistic it is that a site will be developed, when actually deciding whether to grant planning permission for housing development. This will include whether an applicant’s track record of delivering previous, similar housing schemes and can be taken into account by LPA’s when determining future planning applications.

Perhaps more importantly to developers is the intention contained in para. 2.41 which states:

“We are considering the implications of amending national planning policy to encourage local authorities to shorten the timescales for developers to implement a permission for housing development from the default period of three years to two years, except where a shorter timescale could hinder the viability or deliverability of a scheme.”

Clearly in this case the devil will be in the detail.  What would constitute ‘implementation’ would have to be considered.  At present very little is required to ‘implement’ a planning permission but should such ‘implementation’ be taken to include the required infrastructure for example, this will undoubtedly cause a rethink on certain projects.  It may well be that the get out clause of avoiding such shortened timescales under the heading of ‘viability’ may be a well trodden path.

The White Paper also proposes a “Housing delivery test.” This will be the developers response to the ‘improved’ powers of the LPA detailed above.  The test is intended to assess whether the number of homes being built in any particular area is below target.  If the numbers do fall below such a target the test will aim to establish the reasons why, and where necessary trigger policy responses that will ensure that further land comes forward.

Where under-delivery has been identified, the Government proposes a tiered approach to addressing the situation that would be set out in national policy and guidance, starting with an analysis of the causes for the delivery failure so that targeted action can be taken.  The proposed test is as follows:

 

  • “From November 2017, if delivery of housing falls below 95% of the authority’s annual housing requirement, we propose that the local authority should publish an action plan, setting out its understanding of the key reasons for the situation and the actions that it and other parties need to take to get home-building back on track. 
  • From November 2017, if delivery of housing falls below 85% of the housing requirement, authorities would in addition be expected to plan for a 20% buffer on their five-year land supply, if they have not already done so.
  • From November 2018, if delivery of housing falls below 25% of the housing requirement, the presumption in favour of sustainable development in the National Planning Policy Framework would apply automatically (by virtue of relevant planning policies being deemed out of date), which places additional emphasis on the need for planning permission to be granted unless there are strong reasons not to.
  • From November 2019, if delivery falls below 45% the presumption would apply.
  • From November 2020, if delivery falls below 65% the presumption would apply.”

The effect of this ‘test’ would be to require the 20% buffer only where the level provided falls below 85% of the requirement by 2017 so only those with less than 4 years and 3 months housing land supply would be caught.

Further the provision of section 49 of the NPPF (see above) would only apply to those who have less than 15 months supply from November 2018 rising to 27 months, (2 years 3 months), in 2019 and 39 months (3 years 3 months) in 2020.  It would seem that only those LPA’s who are seriously underachieving will be caught out.  Undoubtedly the reason for this approach is to ensure that development comes forward in line with agreed Local Policy unless there is a considerable local shortfall in housing land supply.

Overall the proposed changes seem to be a mix of developing sustainable targets supported by local policy and then supporting those policies through the planning system.  Where LPA’s are falling woefully short of housing supply the proposed changes will promote almost any development, anywhere.  Therefore it is beholdent to LPA’s to ensure robust housing land supply numbers supported by up to date policies.  In return the Government will then seek to ensure that those policies are respected and prevent the current ebb and flow of unsupported sites as developments come forward or are discarded.

 

Step 3: Diversifying the market.

The main thrust of this section of the White Paper is to encourage a greater diversity of house builders.  The Government is concerned that small builders have been declining and were hit hard by the recent recession, (the number of homes registered by small builders is down from 44,000 in 2007 to 18,000 in 2015).  To facilitate this diversity the Government launched the £3 billion Home Building Fund on 3rd October 2016, and continues the Housing Growth Partnership with Lloyds Banking Group. Other intentions are to support custom-build homes and bringing in new contractors through the Accelerated Construction programme.

The White Paper also seeks to support housing associations and local authorities to build more homes while also ensuring that the public sector plays its part. This will include changing the NPPF so that LPAs know they should plan proactively for Build to Rent where there is a need, and to make it easier for Build to Rent developers to offer affordable private rental homes instead of other types of affordable housing.

The Government also wishes to provide family-friendly tenancies of three or more years are available for those tenants that want them.

In recent times Housing Associations have achieved considerable success with 193,000 homes being built between 2011-15 under the ‘Affordable Homes Programme’.  This represented 23,000 homes above target.  To support housing associations to build more, the Government are planning to set out a rent policy for social housing landlords (housing associations and local authority landlords) for the period beyond 2020 to help them to borrow against their future income.  The Government also has confirmed that the 1% rent reduction will remain in place in the period up to 2020.

The White Paper also seeks to put social housing regulation on a more independent footing. The intention is to make the Social Housing Regulator a standalone body, (as recommended by the Tailored Review of the Homes and Communities Agency).  They, the Government, have also reiterated their position that housing associations belong in the private sector and they will be bringing the necessary deregulatory measures to allow them to be classified as private sector bodies.

LPA’s will also be encouraged to build on their own land.  The White Paper states that tailored support packages will be offered to Councils who want to build on their own land, through the new Accelerated Construction programme. They have also announced a new £45m Local Authority Land Release fund for land remediation and small-scale infrastructure, with priority given to innovative delivery models as well as areas of high housing need.

Whether these plans to diversify the type of house builder will correlate to an actual increase in the number of houses being built will be the acid test.

[One final point under this section is that the Homes and Communities Agency will be relaunched as Homes England with a clear, unifying purpose: ‘To make a home within reach for everyone’. What effect this change of name will achieve remains to be seen].

 

Step 4: Helping people now.

The Government and indeed everyone is aware that stepping onto the home ownership ladder is becoming increasingly difficult with the gap between the average wage and the average house price ever increasing.  Within the White Paper a number of measures are set out to address this issue and some of these are highlighted below:

Saving for a deposit 

In 2015 the Government introduced the Help to Buy ISA to boost the savings of prospective first-time buyers. It offers a 25% savings bonus, up to a maximum of £3,000, towards the purchase of a first home. More than 720,000 accounts have been opened to date and over 38,000 bonuses worth £20.5 million have been paid to September 2016, supporting over 27,000 home purchases. In April 2017, the Government intends to introduce the Lifetime ISA. This will support younger adults to save flexibly for the long term, giving them a 25% bonus on up to £4,000 of savings a year. Savings and the bonus can be put towards the purchase of a first home, or withdrawn once they reach the age of 60.

Help to Buy: Equity Loan 

The help to Buy Equity Loan was originally established in 2013 to support homebuyers and boost housing supply after the recession. Government has committed a further £8.6 billion for the scheme to 2021. 

Starter Homes

Starter homes will be targeted at first time buyers who would otherwise be priced out of the market. The NPPF will make it clear that starter homes, like shared ownership homes, should only be available to households that need them most, (i.e. those with an income of less than £80,000 (£90,000 for London)). Eligible first time buyers will also be required to have a mortgage in order to buy a starter home which is intended to stop cash buyers.  It is also intended that there will be a 15 year repayment period for a starter home so if the property is sold on to a new owner within this period, some, or all, of the discount will be repaid. This, along with the mortgage requirement, will reduce the risk of speculative investors buying into the market and thus ensure there will be more affordable homes available to those that need them whilst allowing home owners to move onwards when the time is right

There is also a stated intention to amend the NPPF to introduce a clear policy expectation that housing sites should deliver a minimum of 10% affordable home ownership units. It will be for local areas to work with developers to agree an appropriate level of delivery of starter homes, alongside other affordable home ownership and rented tenures.

The White Paper also seeks to change the NPPF so as to allow more brownfield land to be released for developments especially those with a higher proportion of starter homes by:

“a) bringing forward more vacant, unviable and unused employment land by introducing new rules for retaining employment land. We will make it clear that any proposal on employment land that has been vacant, unused or unviable for a period of five years, and is not a strategic employment site, should be considered favourably for starter home-led development.

b) extending the current starter home exception site policy to include other forms of underused brownfield land – such as leisure centres and retail uses – while retaining limited grounds for refusal;

c) allowing development on brownfield land in the Green Belt, but only where it contributes to the delivery of starter homes and there is no substantial harm to the openness of the Green Belt.”

The White Paper also seeks to clarify that starter homes, with appropriate local connection tests, can be acceptable on rural exception sites. This will be seen as a welcome exception in many rural areas where the lack of low cost and affordable housing is altering the demographic of rural inhabitants so that the available work force in some areas is critically low.

Other measures proposed will include:

  • Extending Right to Buy discounts to housing association tenants.
  • New homes for Shared Ownership, Affordable Rent and Rent to Buy
  • A fairer deal for renters and leaseholders
  • Reviewing Leasehold.

Finally the White Paper supports the Local authorities through the existing powers and incentives to tackle empty homes. Through the New Homes Bonus Councils can earn the same financial reward for bringing an empty home back into use as building a new one. They also have flexibility to impose a council tax premium of up to 50% (on top of the council tax bill), on properties that have been empty and substantially unfurnished for more than two years.

 

Conclusion

The contents of the White Paper, if brought into legislation will have some profound effects on the way both developers and LPA’s view the future provision of housing.  While undoubtedly the current system was failing in some regards many of the proposed changes are bold new initiatives that have yet to be tested in reality.  Perhaps the ‘hydra’ or many headed, approach to tackling this issue was always going to be complex to reflect the numerous problems facing both industry and local government.

Is the White Paper a fix or a fail? The truth is probably a bit of both.  Some of the steps to release land and to simplify development will work but whether the intended flood of new homes will be facilitated by these measures only time will tell.  Certainly some of the proposed changes within the White Paper will highlight where the failure to provide new homes is occurring.  However just as some problems will be solved by these initiatives others will arise.  Overall the White Paper does address some of the issues but whether those solutions prove to be anything more than a sticking plaster will have to be reviewed through hindsight. Perhaps the truth is that we simply cannot fail to fix this increasing problem.

[Any errors factual, grammatical or typographical remain the fault of the author)]

Gavin Collett

Magdalen Chambers

3rd April 2017

[Any issues or question arising please do not hesitate to contact the author through his Chambers (01392) 208484].

County Court Rules That Property Guardian is a Tenant

On 24 February 2017 HHJ Ambrose sitting at the County Court at Bristol concluded a two day trial of a preliminary issue concerned with whether a property guardian in possession of two rooms in the Broomhill Elderly Persons Home in Bristol was a tenant or a licensee. Despite the written agreement pursuant to which the occupier was let into possession describing him as a licence holder, the court, following well established legal principles from the House of Lords decision in Street v Mountford [1985] 1 AC 809, and on the facts of this particular case, found that he was an assured shorthold tenant.

The decision is believed to be the first occasion on which a court has determined the status of a property guardian. A copy of the judgment can be found here and a summary and commentary of the case from the excellent housing law blog Nearly Legal can be found here.

The successful tenant was represented by Russell James from Magdalen Chambers and Geraldine Winkler of the Avon and Bristol Law Centre.

Permission granted for Second Appeal in Landlord and Tenant Break Clause Case

Court of Appeal Grants Permission for Second Appeal in Landlord and Tenant Break Clause Case

Lewison LJ has granted a tenant permission to appeal in a case concerning the correct construction of a break clause in a residential letting and the application of sections 21(1A) and 21(1B) of the Housing Act 1988. In particular the case is concerned with whether the express terms of certain starter tenancies used by social landlords require service of a notice complying with section 21(1B) of the Housing Act 1988.

The appellant is represented by Russell James of chambers who specialises in all areas of landlord and tenant and property litigation.

The Right Warrant: Issuing Warrants Following the Breach of A Suspended Possession Order.

The Court of Appeal has recently given judgment in the case of Cardiff CC v Lee (Flowers) [2016] EWCA Civ 1034, which is concerned with the correct application to be made for a warrant for possession where there has been a breach of a suspended possession order (‘SPO’). It is not a simple application on Form N325 (request for warrant of possession of land) – that is appropriate where an outright possession order has been made. Instead, an application must first be made for permission to issue a warrant in accordance with rule 83.2 of the Civil Procedure Rules. Such an application may be made in accordance with Part 23 and may be made without notice being served on the tenant.

This decision is of great significance because the general practice until now has not been to make such an application. The Court of Appeal observed that rule 83.2, which was introduced in 2014 to “address what might reasonably have been considered to be a weakness of the system, namely that there was no judicial scrutiny of the landlord’s case that the conditions had been breached” (paragraph 3), requires a two stage procedure: application for permission followed by application for a warrant (paragraph 9). In giving the judgment of the court, Arden LJ stressed that this rule provides “an important protection for tenants” (paragraphs 23 and 31), where the landlord has to show that it has “informed the court (among other matters) that the appellant had breached the terms of suspension” (paragraph 9).

The main focus of the appeal in Cardiff CC v Lee (Flowers) [2016] EWCA Civ 1034 (it having been conceded that rule 83.2 was the correct rule) shifted to whether the circuit judge was correct to dismiss the tenant’s appeal notwithstanding that no application for permission had been made in accordance with rule 83.2. The Court of Appeal held that he was. The District Judge at first instance had on the facts of that case, held a contested hearing at which the issue of whether there had been a breach had been considered along with any other arguments advanced by the tenant. The Court of Appeal relied upon rule 3.10 of the Civil Procedure Rules (an error of procedure does not invalidate a step in proceedings unless the court so orders, and can be remedied by the court), and rule 23.3(2)(b), which allows for the dispensing of an application in form N244, in coming to this conclusion. However, this does not provide carte blanche for the future for landlords to avoid following the correct procedure. The Court of Appeal placed heavy reliance in that case on the fact this was a genuine mistake, the social landlord did not know it was entitled to proceed as it had, and the fact that all issues had been considered by the judge in any event. Such a situation is unlikely to be available in the future because social landlords should be aware of this decision and Arden LJ said: “Social landlords must ensure that from now on their systems are such that the same mistake will not be made in the future.”

Some Brief Observations

It is now clear that permission needs to be sought from the court following an allegation of breach of an SPO and the court must consider whether there has been a breach before granting permission. However, the fact that this can be made without notice to the tenant and without a hearing potentially, I think, opens a can of worms. If a District Judge were to do this then they would presumably need to give the tenant the right to set aside the permission that had been given in accordance with the Civil Procedure Rules. My view (and it is just a view) is that the way forward is to make provision in future SPO’s for this procedure, in the same way that previously occurred in the old PPO’s. It strikes me that this would be of benefit to both parties as it allows everyone to know in advance what procedure will be followed in the event of a breach.