Contemporary Housing Under UK's Conservative Government's New Housing and Welfare Policies

Introduction

The UK conservative government that is expected to be in power as a majority government till 2020 has brought numerous reforms in the housing and welfare sectors. Among them are the new welfare and the housing policies which aim at reducing the welfare benefit costs while encouraging the homeownership in the country. Therefore, the housing and welfare policies in the UK have been noted to be a defining feature of the contemporary UK government policy as the policies support the people in low incomes including rental houses. This breaks as well as fractures the society regarding an underpinning political narrative hence showing the significance of the policies. The UK conservative government identified the need for reforms regarding the societal welfare mainly in housing which has been a significant challenge in the country for decades. The government noted that the demographic changes that have been taking place, variations that depend on the national culture, and political traditions have impacted on the vagaries of development of the national economies. Therefore, the government identified that implementation of welfare reforms across the country especially in housing is a mitigation measure regarding the national social welfare challenges that have detrimental impacts on economic development. However, the welfare reforms have been noted to have adverse impacts as noted by the housing and welfare associations which include negative financial position of housing associations, limitation of a centralized approach to housing solutions, reduction of funding sources, reduction of welfare benefits, and undermining of the tenant's ability of making a home for life. It should be noted that the private rented sector has been uncoordinated for quite some time in the UK. Therefore, the small landlords and new property supply have created housing difficulties for the tenants. Hence, the private rented sector has been the cause of these reforms and policies that seek to establish effectiveness in the welfare and housing sector.

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Housing Associations

New Housing Policy Challenges and their Response

Decentralization of Housing

The social housing sector has undergone significant changes since the Conservative government took power from 2010 (Burman et al. 2017). The Localism Act of 2011 was a significant conservative government housing policy that led to the decentralization of housing management and planning to the local authorities and the associations (McKnight et al. 2015). The new Localism Act which was passed in March 2011 aimed at eradicating the bureaucracy in the housing sector by decentralizing housing regulation to the local authorities (McKnight et al. 2015). As a result, different councils and could adopt different regulation frameworks which did not factor the collective housing problem in the United Kingdom. The new decentralized housing framework was prone to abuse by local authorities which limited the ability of the national government to act as an oversight body which could protect the interests of the tenants (Burman et al. 2017). This was done following the need for reforms that the conservative government identified in various areas especially the foreign affairs and the border control (Burman et al. 2017). In this regard, the decentralization was associated with the increased national income as well as the higher levels of investment. However, some sectors were negatively affected which necessitated the housing associations to take various measures to mitigate the challenges created.

Response to Decentralization of Housing

In response to the policy of decentralization, the housing associations took advantage of the Localism Act to micromanage tenancy tenures which were aimed at improving housing supply by eliminating lifetime tenancy agreements. As a result, the housing associations garnered more control of tenancy agreements. It should be noted that through the policy of decentralization, all the housing authorities were tasked to have an allocation scheme that would determine the much- needed priorities (Burman et al. 2017). Therefore, the housing associations undertook a reasonable preference regarding the groups that needed a lot of attention especially the vulnerable in the society. These also included the people that were subject to migration in the country and required reasonable housing. The decentralization policy meant that they would undertake some decisions independently as long as they served the customers interest (McKnight et al. 2015). Therefore, the housing associations responded by publishing various tenancy strategies that provided all the tenants provided, the circumstances that led to the granting of the tenancy, as well as their length and the circumstances in which they can extend the terms of the tenancy. The manner of handling the disputes that could arise in the tenancy also changed drastically since the home information packs were no longer needed.

Right to Buy Extensions

Right to Buy extension significantly interfered with the housing associations independence by making them public entities which reduced their ability to secure construction funds leading to the shortage of homes in the UK and increase in prices (Boughton 2018). This has been achieved through the Housing and Planning Act of 2016 which made the Right to Buy voluntary in private housing associations (Beatty and Fothergill 2018). Housing stakeholders view both the universal credit and the bedroom tax as significant challenges (Bragg et al. 2015). It should be noted that the Housing and Planning Act of 2016 allowed the voluntary right to buy agreement that would be established between the housing associations. Additionally, the government was concerned with the housing association getting the necessary compensation needed when homes were sold (McKnight et al. 2015). It was also a challenge for the housing associations as the policy meant that the government would have the right to detail a homeownership criterion hence interfering with the rights and initial duties of the associations. The rule also gave power to the Secretary of State that would see him/ her instruct the Homes and Communities Agency to oversee the housing associations and establish how they were complying with the set regulations (Bragg et al. 2015). This would be diminishing to the housing associations since it meant that the authorities would not be independent.

Response to Right to Buy Extensions

This policy was noted not to have a significant direct impact on the housing association in the short-term but on the long-term. It should be noted that the housing associations were not affected by this section of the act which required the tenancies of between two to ten years to become obligatory (Bragg et al. 2015). However, the housing associations have increased their scrutiny on new tenants to ensure that they can meet the high rents and accompanying service charges (Hickman et al. 2018). Besides, social landlords are investing on energy efficiency in their establishments with the aim of reducing the overall cost of energy to cushion tenants who have to do without government housing benefits (Power et al. 2014). To manage the rising costs of housing and the unwillingness of the government to intervene through extended benefits, housing associations have embarked on reviewing their staff and operation structures to reduce costs which seek to reduce the housing cost burden on the tenants. However, it should be noted that the policy meant that the associations would have the discretion to adopt both the assured or the fixed terms assured for the shorthold tenancies (Hickman et al. 2018). The housing associations further compacted the government to remove its powers regarding the voluntary winding up, dissolution, as well as any forms of restructuring of the housing associations. The associations established that the removal of the artificial restrictions would ensure that they would be in control of the housing valuations.

Bedroom Tax

The UK government's implementation of the "removal of the spare room subsidy" in 2013 under the bedroom tax provisions was also a major step undertaken which impacted on the housing management in the country (Hickman et al. 2018). The bedroom tax has been associated with increased poverty and estranged social relationships in the society which has previously been the source to call for an end to the tax (Moffatt et al. 2015). Most of the affected people are in the low-income bracket individuals who face reduced benefits. The cut of the housing benefits exposes the vulnerable members of the society such as the disabled (McKnight et al. 2015). The Conservative government reform increased the financial burden on tenants on social housing, and its orientation falls far from seeking to end poverty which has caused many people previously receiving housing benefits to depend on food banks for survival (Greenstein et al. 2016). However, the government, through their assessment, had anticipated that the bedroom tax would not have any impact on the health as well as the wellbeing. However, the loss of income led to a worsening mental as well as physical health.

Response to Bedroom Tax

The housing associations had to undertake measures to mitigate the challenges that the tenants faced following the bedroom tax. To manage the displacement costs caused by the welfare reforms and the high number of defaulters, housing associations employed more staff to help in managing the impacts of the reforms (Hickman et al. 2018). The new housing associations staff provided advice to the tenants such as money management, budgeting, benefits advice and employment advice which aimed at reducing defaulters due to poor financial management caused by the shift to tenant paid housing (Hickman et al. 2018). The housing associations embarked on the digitization of the tenant information systems and promoted pre-tenancy affordability evaluations which aimed at assessing the ability of the tenants to be able to pay rents on time and matching tenants with housing which they could easily pay to prevent bedroom tax and rent defaulting (Hickman et al. 2018). This was in response to the government's recommended strategies of mitigating the impact of the tax which included taking a lodger, increasing working hours, and downsizing.

New Welfare Policy Challenges and their Response

Reclassification of Housing Associations Into Public Entities

Before the Housing and Planning Act of 2016, the housing associations were able to raise 60 billion pounds of private borrowing. However, this was taken away after their reclassification into public entities through the extension of the Right to Buy (Greenstein et al. 2016). The creation of the Housing and Planning Act of 2016 required the councils to offset all the value vacant houses to raise capital to finance the Voluntary Right to Buy reform issued to the housing associations (Gregory et al. 2016). The policy did not have any benefits to the UK housing shortage problem because it did not increase the number of houses on construction and the resulting price increases canceled the respective incentive provided by the government to own homes.

Response of Reclassification of Housing Associations Into Public Entities

Introducing the voluntary Right to Buy which means that the housing associations can control to regulate the prices of their housing units will create a favorable business environment to facilitate the construction of new houses (Murie 2016). Introducing the voluntary Right to Buy reduced the number of people seeking discounts for privately owned homes which limits the ability of the poor to...