Liverpool City Council has become a landlord once again – a private landlord and which it claims is ethical I kid you not! Liverpool Foundation Homes – a private limited company and private landlord which the council is claiming to be an ethical landlord – has the full backing of Mayor Joe Anderson as this publicity for a ‘rent to buy scheme reveals and which Mayor Joe wrongly and knowingly deceives in calling council housing.
Liverpool Foundation Homes is a local housing company (LHC) – a construct that the current Tory government avidly seeks to promote in its Social Housing Green Paper from 2018 which defines a LHC on page 71 of that as “independent commercial organisations wholly or partly owned by local authorities to buy, develop or manage properties.
In other words a private landlord owned by a council and which Liverpool City Council seeks to obfuscate and deceive by calling LHF an ethical company and below is the spiel on the Liverpool Foundation Homes website.
About Liverpool Foundations Homes
Liverpool Foundation Homes (Foundations) is Liverpool City Council’s ethical housing company. Foundations is the flagship housing policy for Liverpool Mayor Joe Anderson, who wants to use the company to rebalance the city’s social housing stock, revolutionise the Rent to Buy sector and drive up council tax receipts.
It has been tasked with creating bespoke properties for the homeless, foster carers, large families, the elderly and people with a disability and to improve the availability of good quality, affordable homes in the city.
You can see why it self-proclaims to be ethical given its claimed rationale above with its focus on vulnerable groups in housing terms such as those homeless or foster carers, those with a disability and so on … yet what is it announcement today … ah!
Foundations, Liverpool City Council’s housing company, is to launch a rent-to-buy scheme so that people can get onto the housing ladder and eventually own a home of their own. The company, one of the flagship housing polices for Mayor of Liverpool Joe Anderson, will launch the initiative with a pilot project involving 14 new homes in the city. Under the scheme, people will be able to rent a home at 80% of the market rent, so they can save the other 20% towards a deposit in order to get a mortgage to buy the property. They will be given an option to buy the home after 12 months and up to five years at a fair market price based on an independent valuation at the time of purchase.
The scheme will be available to people who live or work in Liverpool and are either first time buyers or people who have had to sell a home because of a relationship breakdown. Other criteria include being in work but unable to buy a home on the open market because the household is unable to save a sufficient deposit due to living costs.
So a perverse home ownership scheme not housing for foster carers or those disabled or homeless or any other “ethical” client group then! And why is this rent to buy scheme perverse? Oh dear how long have you got!
Rent to Buy?
The rent on a 3 bed property will be set at the “affordable (sic) rent” level which is circa 47% above a council rent level and the renter or renttobuyer will have the option to buy that property at full market value and with no discount in the first 5 years. Let’s put that into illustrative terms for Liverpool and instead of paying a council rent of £85 per week the tenant will be paying £125 per week in rent which is £40 per week more than a council rent and £30 per week less than a private rent of £155 per week.
In the first 5 years or 260 weeks this council owned private landlord will have charged the tenant £10,400 more in rent than they would have paid if the property had been a council house, and the perverse claim is that this helps the tenant save for a mortgage deposit! True, it will have saved the tenant £7,800 if they had been charged a full market rent by a private landlord (excluding fees) but still over £10,000 more rent being charged than a council tenant! Good luck with saving for that mortgage deposit
The known lie and deceit of Mayor Joe Anderson
The word ethical is a deceit and con trick and one which is being promoted by Joe Anderson the Mayor when he says in this article:
The company’s rent-to-buy launch follows news that Liverpool City Council intend to begin building council homes again for the first time in 30 years. Mayor Anderson said: “The work of Foundations and the new rent-to-buy scheme complements our council house building plans. Buying is not for everyone, for a range of reasons, so it is important that we do what we can to help people in every situation to get the home they deserve.”
These are NOT council houses Mayor Anderson they are homes owned by a private limited company and whose direction is claimed to be subject to council approval. Liverpool City Council is not building council houses at all so the claim of Mayor Joe Anderson for this rent to buy scheme that it “…complements our council house building plans…” is a known and deliberate deceit.
A quick look at Companies Houses sees Liverpool Foundation Homes for precisely what it is which is a Private Limited Company and not a council house landlord and the picture above is Mayor Joe Anderson smiling with Frank Hont a director of this private limited company and former councillor at LCC
Liverpool Foundation Homes Limited is a private landlord, no ifs or buts, that is what it is and this announcement today is the first one which mentions the type of rent it will be charging which is the misnomer and deceit called “affordable (sic) rent” and which is typically 47% above the rent that existing council landlords charge across England. It is NOT council housing at all in any way shape or form. It is not some ‘arms-length’ construct such as an ALMO it is a private landlord company lock, stock and barrel and thus any claim this is council housing is a de facto deceit by those who claim it.
This local housing company (LHC) construct has been around since 2011 yet had relatively little take up by the local councils who had sold off their council housing stock and which is almost two-thirds of all English councils until the Conservative government made this the clear driver in their Social Housing Green paper in 2018 and I reported on here in a post called “Tories housing policy (SHGP) is ALL about the death of UK public housing” which is what the private landlord construct called the LHC does and precisely what Liverpool City Council is doing with Liverpool Foundation Homes Limited.
IF … Liverpool City Council top slices and ringfences this £40 per week and £2,080 per year extra rent on these properties in order to cross-subsidise the rents on truly ethical housing for foster carers, the disabled and the homeless then fine – as long as that is publicly stated and written into any agreement and legally binding upon Liverpool Foundation Homes Limited. Yet I doubt that will happen or can legally be possible and shows this claimed ethical approach for what it is, a deceit.
Liverpool City Council like all who have sold off their council housing to housing associations and who are also private organisations called private registered providers and because of that can hold no legal duty to house or rehouse anyone are in a bind. They cannot legally re-establish their council housing departments as the transfer agreements to these housing associations will forbid this, and the newly formed housing associations those transfer agreements formed will not and cannot rehouse these so-called ‘ethical’ groups because of (in their words) the tenants “limited entitlement to welfare assisstance” – or in lay language No DSS – which housing associations practice routinely even in a low to medium rent area such as Liverpool.
Homeless families are hamstrung by the overall benefit cap policy which sees any family with 3 children in Liverpool not receiving enough in housing benefit or its UC equivalent to meet the rent. That will shortly become the family with 2 children due to the OBC and also due to housing association rents rising by more than inflation and due to housing associations increasingly using the ‘affordable (sic) rent’ level rather than the 47% less expensive social rent.
Due to this Liverpool City Council is placing homeless families in very costly hotel accommodation and cannot move them into safe and secure sustainable properties because the combination of the OBC and inflation-busting rent increases by housing associations means they will not rehouse as not enough housing benefit is paid to cover the rent. This places huge increased and ever-increasing costs to the council to pay for ever longer stays at such costly temporary accommodation. The same process also sees any disabled household who loses their DLA or PIP or who loses their ESA support group status lose the exemption they have for the overall benefit cap policy and face the same housing benefit cut.
To turn specifically to this first (of many) such schemes and which all have a limited tenant group who can apply for this rent to buy product. What happens if the working household which is one of the criterion loses their job while still renting? They will still be apying the affordable (sic) rent level and the housing benefit they can claim or its UC equivalent will be cut significantly by the overall benefit cap policy and the AR level charged and thus themselves become a prime candidate for the arrears to eviction to homeless pathway! The use of the affordable (sic) rent level can NEVER be ethical as it means in simple yet stark terms you lose job you lose your home.
The misnamed affordable rent model always means lose job lose home because of the overall benefit cap policy and is unethical and distinctly asocial yet it is the only game in town for housing associations and LHCs and note well the builder of these 14 LHC rent to buy houses is also the private housebuilder wing of a housing association too as Redwing Living is the private arm of Regenda Housing Association.
The Regenda Group is well established. Formed in 2001, within 10 years it was joined by five housing associations, dating back to 1963: West Pennine and the Limehurst Village Trust in Oldham, Templar in Macclesfield, Wyre in Poulton-le-Fylde and Maritime in Liverpool. Together, we gained a reputation for innovation.
We strengthened our Independent Living, property development and regeneration services. In 2009,we saw an opportunity to provide a better value repairs service by buying M&Y Maintenance and Construction. We went on to increase our commercial activity, buying McDonald Property Rentals (a private lettings agency), creating Redwing Living (our private rent, sale, property management and shared ownership company) and acquiring Alder Training (which provides training and apprenticeships in health, dental and care, as well as business, housing and customer services). These commercial enterprises contribute some of their profits to enable Regenda Homes to provide affordable housing and social projects.
In the last few years, we have added to our portfolio, welcoming to the Group the Petrus Community (homelessness charity), Centre 56 (child care for those suffering from domestic abuse) and Positive Footprints (personal development for young people).
In the first 5 years of the Tories Affordable Housing Programme which spawned the affordable rent level and saw the bastardisation of the word affordable from its dictionary meaning, housing associations converted over 102,000 existing properties. The word converted here means the housing associations replaced the £85 per week social rent level the very next day with a new tenant in the exact same property paying £125 per week in rent and £40 per week more for the exact same property using my earlier illustrative figures – and the national average is this 47% increase in rent overnight!
The undeniable facts on AR “conversions” from the then regulator:
It is nothing more than rank profiteering never mind unethical or asocial by housing associations and the same goes for ALL local housing companies such as this Liverpool Foundation Homes Limited construct of the city council and which calls itself ethical!
It (AR) means no job no house for existing as well as prospective tenants. It is no job no house and Mayor Joe Anderson should be shamed and ashamed about this deceit when he claims this is council housing. The tenants on this Rent to Buy scheme will have an assured shorthold tenancy (AST) the same tenure as a private tenant, the same no-fault eviction tenure of a private tenant – as far removed from a council tenant as you can get – and because Liverpool Foundation Homes is a private landlord it has to use this insecure form of tenancy and can’t even use a full assured tenancy never mind the secure tenancy of a council tenant. Private companies cannot use these forms of tenure.
Housing associations can use starter tenancies for up to 18 months and which also are AST no-fault eviction tenure yet Liverpool Foundation Homes will use them indefinitely and every one of their tenants whether in Dingle or the previously announced Yew Tree development will be on these no-fault eviction basis. How ethical is that Mayor Joe? How deceitful are you being in stating these are council houses!!