Tenure Neutral Housing System
Interest is growing in development of a tenure neutral housing system which breaks
down the barriers between tenures and provides flexibility over financing and
rental/ownership of homes over lifetimes.
The financial advantage of equity accumulation, and the higher degree of personal
control, make owner occupation the choice of the majority. This is likely to continue
in the future but the financial crisis and collapse of house prices has underlined that a
large minority of people struggle to afford the cost of home ownership and require
other provision while many still aspire to a degree of home ownership. There are
considerations for older home owners who may want to ‘contract out’ some of the
responsibilities for maintenance and repair of their homes, and/or change financing of
their homes without moving.
(However, the popularity of owner occupation may be diminished by the experience
of house price inflation counter balancing the increased value of the existing home if
you want to move, and by the problems of house price collapse and negative equity.)
The current housing system is based on tenure division with separate policies
applied to each tenure including separate systems of financing. The delivery of
public subsidy to assist people on low incomes with housing costs is complex with a
variety of separate delivery vehicles. There are a range of initiatives which cross the
boundaries of home ownership and social renting such as mortgage rescue, shared
housing and intermediate housing but these are as yet marginal and fragmented.
Strategy for housing as a whole needs to look to the longer term and a more
coherent and flexible system than the current fragmented initiatives.
2. What does tenure neutral mean?
The flexibility to move between tenures without the current barriers of differing
administration and financing applying to different tenures.
It doesn’t just mean planning every new development to include a mix of social
renting, ownership, or part rent/ownership – which often ends up anyway with
allocation to the highest priority applicants on waiting lists, who cannot afford to buy.
The question for development of a tenure neutral housing system could be:
‘How can public subsidy be used to support people on low incomes to access
adequate housing with the flexibility to alter finance arrangements on a spectrum
of renting to owning, without having to move home?’
The question would incorporate flexibility for existing owners to move into renting
whether in full or part, and for renters and part-owners to buy their home and move
out of the system into full ownership. Equivalent flexibility could be sought for
tenants of private landlords but with greater difficulty.
3. What is the problem tenure neutral solves?
Being able to move between tenures according to circumstances, and be able to
stay in the same home.
Being able to staircase the proportions of rent:ownership in the same home.
Although right to buy sales are very small now, this is largely due to remaining
tenants and new tenants being on the lowest incomes and unable to afford to
buy. If affordable housing provision increases to house less vulnerable, working
people on low incomes the demand for (part) ownership could increase.
Enabling mortgage rescue without former owners having to face re-possession
and moving home.
The ability for older people to change from owners to renters when they are no
longer able to maintain their property, without moving out.
In principle the tenure neutral system could provide the same flexibility for tenants
of private landlords but this is a more difficult area and questions about insecurity
of tenure and quality need to be addressed.
4. Taking forward the issue
Development of a tenure neutral housing system will require:
Learning from the experience of existing tenure neutral and flexible systems of
financing renting and/or buying.
Discussion of what a tenure neutral system of housing for Wales could be, and
how financing arrangements could work.
Identifying a process to design a framework of operation and financing for a
tenure neutral housing system.
Discussions about a tenure neutral system have been stalled in the Affordable
Housing workstream waiting presentation of a paper from CIH Cymru. The Finance
workstream is working on intermediate housing solutions in the immediate credit
crunch circumstances. Essex Programme Board has identified that this issue has
not been progressing very much and in the discussion Ian Williams identified that
tenure neutrality for new housing association developments has been a WAG
requirement for some time. Ian undertook to provide further information on this and
to talk to Amanda Davies who is leading on the Essex finance workstream.
A separate group has met initially to discuss the suggestion of a conference to kick
off consideration of the issue and how to move it forward. However, as it seems the
issue of a tenure neutral housing system is likely to be pursued within the Essex
implementation process, the idea of a conference has been shelved till it is more
appropriate later in the process. This paper is the output of discussion by that group
which will be fed to the Programme Board for consideration.
The outcome may be a further series of working groups along the usual Essex lines
to take forward the issue. Significant research is likely to be needed which could
not be done by Essex workstream members with day jobs – but a workstream could
supervise contracted out research.
The group considering the conference idea has suggested that research/papers on
the following topics are needed to inform the process of developing toward a tenure
neutral system of housing:
What the issue is about, and the problems tenure neutral system would solve.
What are HAs in Wales and elsewhere already doing for tenure neutrality?
What is the commercial sector already doing for tenure neutrality schemes?
What has been the impact of choice based lettings schemes in relation to tenure
What are the issues for the private rented sector to make the sector an
acceptable component of tenure neutral and affordable housing?
What is the ‘access gap’ where people are too rich to access social housing, and
too poor to afford (part) ownership – how many people in what income range?
Although not the poorest these people are excluded from access to an affordable
Existing work can inform the development::
JRF publication on sustainable communities and the factors that make
Steve Wilcox work on intermediate housing affordability.
I feel the conference needs to have only a modest number of platform speakers and
as much workshop discussion time as possible. Workshops should have only brief
presentation elements and be facilitated working sessions to come up with proposals
or specific issues for investigation.
Conference Planning Decisions
1. To agree the purpose and outline programme for the conference.
2. Identify possible speakers.
3. To agree the basis for conference organisation – can CHC and/or CIH Cymru
events organisers take this on?
5. Self-financing or seek funding support?