Plus: Croydon council to invest in a property fund to buy homes…’Cheaper to buy in London than rent; say Halifax
Croydon’s illegal subletting amnesty has led to the keys of three properties being handed back – and four reports of suspected housing fraud.
The amnesty, which ran throughout February, meant tenants illegally subletting their council homes were able to come forward with the promise that no further action would be taken against them.
The campaign was part of a drive to crack down on tenancy fraud, the majority of which is illegal subletting.
It aimed to warn people that illegal subletting is now a criminal offence punishable by a two-year prison sentence and a fine. They would also be ordered to pay back to the council any profits they have made.
“Three properties being illegally sublet in New Addington and Selhurst have now been freed up so they can go to families in need of accommodation” said a Croydon council spokesman.
“Four further cases of housing fraud were also reported via the council’s anti-fraud hotline.
“Tenancy fraud costs the taxpayer £90,000 per property when taking into account the potential housing benefit fraud and the cost of keeping other households in temporary accommodation, such as bed and breakfasts.
“It is estimated nationally that around 98,000 properties may be subject to tenancy fraud, at a cost to the taxpayer of £900m a year.
“The council wants residents to come forward and report any suspected illegal subletting.
“Tell-tale signs include post being delivered to properties that does not display the named tenant; different people seen coming and going; or locks fitted on internal doors.”
Cllr Dudley Mead, cabinet member for housing, said: “We’re delighted with the successful outcome of the amnesty.
“But those who think they can get away with illegally subletting their home need to think again.
“Now the amnesty is finished we will be stepping up our efforts to catch those breaking the law and depriving families of a decent home.”
To report confidentially any suspected illegal subletting call the anti-fraud hotline on 0800 328 9270, or visitwww.croydon.gov.uk/housingfraud (Source: Croydon council press release)
…AS THEY INVEST IN PROPERTY FUND TO BOOST HOUSING SUPPLY
In what they say is a ‘first’ by a local authority, Croydon council is to invest in a property fund to buy homes that will ease the borough’s housing pressures and provide suitable accommodation for homeless families.
The initial outlay will see £10 millions invested in Real Lettings, which has been set up in partnership by fund manager Resonance and homelessness charity Broadway.
It is expected to secure 94 one-bed and two-bed properties in London for the council over the coming months.
The investment is part of the council’s 2014/15 capital budget. The fund is designed to produce a return for investors that comes from an increase in property values and rental income.
Croydon is the first local authority to invest in the fund, which has a growing pool of investors, mostly housing associations and charitable foundations.
Real Lettings offers affordable accommodation in the private rented sector for formerly homeless people.
The council will nominate the tenancies while Broadway will place households in the homes purchased by the fund.
If the scheme is successful, there are plans for another £10 million investment in the fund later on.
Cllr Dudley Mead, cabinet member for housing, said: “With house prices going up beyond what is affordable to the council, we have to look at alternative and innovative ways of buying property to increase the supply of housing available to the council.
“This will ease the pressure on the council in managing homelessness and means we can place families in good quality accommodation as opposed to costly bed and breakfasts.”
Susan Fallis, assistant director of services at Broadway Homelessness and Support, said: “By investing in the real lettings property fund, Croydon council are tackling homelessness in the borough head on.
“Their commitment is helping to ensure homeless families in the area get access to high quality but affordable private rental accommodation that may otherwise have been out of reach.”
Daniel Brewer, managing director of Resonance, said “Croydon have shown real leadership by using their balance sheet, rather than just relying on increasingly tight revenue budgets, to provide for some of their more vulnerable families.
“We’re hoping a number of other London boroughs will follow suit.” (Source: Croydon council press release)
CHEAPER TO BUY THAN RENT – ESPECIALLY IN LONDON SAYS REPORT
The cost of owning a home in the UK is now on average £124 per month lower than renting (£1,488 a year), according to research by Halifax.
The average monthly costs associated with owning a three bedroom house stood at £645 in December 2013; which is 16 pc lower than the typical monthly rent of £769 paid on the same property type.
This is the largest cash difference since 2009, when the figure stood at just £6 and average monthly costs for owning and renting were £646 and £652 respectively.
The gap between the costs of owning and renting is being driven by average monthly rents increasing by over £100 since 2009, while average monthly ownership costs have remained relatively unchanged over the same period.
Today’s picture is in stark contrast to the situation for renters five years ago when, in 2008, the monthly ownership cost was on average £226 (31 pc) higher than rental costs.
Craig McKinlay, mortgage director, Halifax said: “There has been a substantial improvement in the affordability of owning compared to renting in recent years, which has been driven by the fact that monthly home ownership costs have fallen by a third (32 pc) since 2008.
“Buying will continue to be a more financially attractive option as the cost of owning a home remains stable.
“With greater availability of mortgages that require smaller deposits, the property ladder has also become even more accessible for those who can afford the monthly costs of owning but had previously not been able to save the necessary deposit.”
There are large regional variations in buying versus renting. Owning a home is most affordable compared to renting in London with the typical homebuyer paying £188 a month less than the average renter (£1,196 against £1,384).
On the other hand, in West Midlands and East Anglia the difference is marginal, with average monthly buying costs just £6 lower than average monthly rental costs (£553 against £559 and £633 against £640 respectively)
But the level of deposit required by buyers varies significantly across regions, particularly for first time buyers in London, which is also likely to influence whether then can afford to buy, says the report.
Home purchase at its highest level for five years but remains well below peak
The lower costs of owning compared with renting; an improved economic outlook and a greater availability of mortgages that require a smaller deposit may have contributed to the 15 pc increase in the number of house sales in 2013 compared to 2012.
Sales last year were the highest since 2007 (1,619,000) but were still 34 pc lower at 1,069,000.
The half yearly Halifax Buying vs. Renting Review tracks the cost of buying and renting a three bedroom property across the UK.
Average buying costs include mortgage payments, income lost by funding a deposit rather than saving, spending on household maintenance and repair and insurance costs.
They do not include one-off costs, such as stamp duty, valuation and legal fees
The review is based on data from the Halifax’s own housing statistics database, BM Solutions, the Bank of England and the Office for National Statistics (ONS). UK figures are a weighted average of regional data using housing tenure figures.
(Source: Halifax press release)