If I outstay my welcome in a camera-controlled car park, I will probably be issued with a penalty charge notice.
That notice would, in the ordinary course of events, be posted to the registered address of my motor vehicle. But supposing I don’t receive that PCN because I have moved away from my old address and have not yet got around to updating the DVLA with my change of address? And supposing I don’t receive any of the follow-up correspondence, during which time the original £60 PCN has accumulated to £600? The first I know about it, is when a bailiff comes knocking at my door. But Mr Bailiff, I didn’t receive anything?
Tough! Parking enforcement is entirely a matter of process. No allowance is made for oversight. Fortunately, the law is not always like that.
Supposing a civil judgment is entered against me in my absence for legal proceedings which I knew nothing about. Even if the papers were correctly served, I might still have good grounds for asking a district judge to set aside that judgment if I can convince the judge that it would be unfair to let the judgment stand, because I had an arguable defence. A similar issue arose in relation to two recent cases at the Upper Tribunal Lands Chamber, which concerned situations where papers had been correctly served by a local authority but had not come to the attention of the intended recipient.
In the first case, Tabassam v Manchester City Council [2024] UKUT (LC), Ms Tabassam was held to have had a ‘reasonable excuse’ for not complying with a statutory improvement notice which had been sent to the proprietorship address stated on her land registry title, as well as well as to the property itself. But neither notice reached her and she therefore did not respond. In default of her response, Newcastle City Council imposed a financial penalty against her for failing to comply with the improvement notice.
The reason why Ms Tabassam had not received the improvement notice was that she had moved away from her old address and had not updated the land registry record. She pleaded ‘reasonable excuse’. Her plea was upheld as it was said that the council could have found a more up to date address if it had searched other internal records.
In the case of Newcastle City Council v Abdullah [2024] UKUT 140, the city council had adopted a landlord licensing scheme under the Housing Act 2004 for the area within which Mr. Abdullah’s property was situated. A licence issued by the council permitted Mr Abdullah to manage premises at 29 Gillies Street subject to standard conditions requiring him to provide certain information on demand. The council later requested information from him by letter sent by ordinary post and addressed to him at an address he no longer occupied. The key question in that appeal was whether a demand which never came to his attention was nevertheless an effective demand for the purposes of the licence condition. If it was, Mr. Abdullah’s failure to comply with that condition would have been an offence contrary to section 95 (2)(b) of the Housing Act 2004 unless he could prove that he had a reasonable excuse for that failure.
In this case, the upper tribunal found that the notice had been properly served, even though there was other e-mail correspondence on an unrelated matter between Mr. Abdullah and the council which quoted a more up-to-date address. Nevertheless, the upper tribunal found against Mr. Abdallah on the question of whether service of the notice was valid.
What made Mr Abdullah’s case different from that of Ms Tabassam was that he was under a legal duty to notify the council of any change in his address. However, the upper tribunal left open the issue of ‘reasonable excuse’, which was remitted back to the first-tier tribunal.
One of the puzzling things about these two cases is why they were ever allowed to reach the Upper Tribunal. Wouldn’t a wiser local authority, in those circumstances, simply have accepted the owner’s claim that they had not received the earlier documentation, and started the whole process again? Yes, starting again might be annoying. But it’s a damned sight cheaper than losing a ‘reasonable excuse’ argument in the upper tribunal.
Thousands of people have done well out of Margaret Thatcher’s right to buy, including Labour’s Angela Rayner. But not everyone has been so lucky. Amongst the least-lucky are those leaseholders who purchased high-rise flats under right-to-buy and are now facing sky-high service charges. Amongst those, are the leaseholders in Verulam House in Hammersmith Grove who are facing service charges of between £17,500 and £21,500 for window replacements which they say are not needed. One of the problems for right-to-buy leaseholders is that although they are the ones picking up the bills, they have little say in the matter because they will always be in a minority.
Although residential leaseholders now have extensive rights to take over the management of their flats, they can only do this by acting collectively. For example, the statutory ‘right to manage’, introduced by the Commonhold and Leasehold Reform Act 2002, can only apply where a majority of qualifying leaseholders are on board with it. But this is of no help to right-to-buy leaseholders where the majority of flats in a high-rise block are still owned by the local authority and let out as social housing. The most, to which those right-to-buy leaseholders are entitled, is the right to be consulted over proposed service charges under section 20 of the Landlord and Tenant Act 1985. But even this right to be consulted, is cut down for right-to-buy leaseholders because they do not have the same right to nominate their own contractor as is enjoyed by other private leaseholders. And even the prices may be higher as councils are constrained in their choice of contractor because of the need to comply with rigid procurement regulations, which means that they cannot shop around for the best deal.
This week, we read in the newspapers that planning applications have fallen to a 16-year low. According to reports, only 2,456 projects were granted planning permission during the second quarter of this year. Can it really be that low? The Home Builders Federation has warned that if this trend continues it will lead to a reduction in housing delivery of 44,000 homes a year, which would see supply for England fall to levels not seen for a decade. So what is it all about? If we want to get Britain building, shouldn’t we be issuing planning permissions like confetti?
According to Stewart Baseley, HBF Executive Chairman, the opposite has been happening, with the policy environment becoming increasingly anti-development and anti-business, resulting in a sharp fall in the number of homes being built. He added, “Fewer homes being built during an acute housing crisis has clear social implications, in particular for young people, and we’ll end up reducing the economic activity and cost jobs”.
So why is government policy skewed so much towards the ‘no’ lobby. Why at this critical time, has Michael Gove abolished the requirements for councils to have a five-year land supply for housing development? We’ve seen the same attitude towards green energy in which the ‘no’ lobby has been given a veto to block on-shore wind farms and the electricity pylons needed to transport green energy.
If you don’t believe there’s a housing crisis, look around you. Young people sleeping in shop doorways. Thirty-somethings still living with their mums because they can’t afford to get something of their own. Desperate renters in a bidding war with each other, just to find somewhere to live
It’s not just about supply and demand. The housing market itself has become distorted. Young couples cannot get on the property ladder because they are being priced out by a cash-rich buy-to-let market which is subsidized by the housing benefit system. Councils are having to rent back properties on their own estates just to meet their statutory housing obligations. The creation of a new class of middle-people plugging the gap in the provision of social housing, whilst at the same time taking their cut from the housing benefit system.
What has caused crazy state of affairs? What are the solutions? We start with the causes.
The causes of Britain’s 2023 housing crisis
There is no single cause of today’s housing crisis. There is a multiplicity of causes which, over the course of several decades, have converged together to create that crisis. Here they are.
The statutory right to buy
Remember that when statutory right to buy was introduced in 1981, there was no buy-to-let market. Most homes sold under right-to buy remained in owner-occupation until the private rental market opened up in the 1990s. We now have a situation in which, in some areas, up to one half of ex right-to buy properties are owned by private landlords and in many cases rented back to the same local authorities which originally sold them. There is also an intrinsic unfairness in the State gifting massive subsidies to a select group of people whom, by chance, are already in subsidised housing, at the expense of everyone else. Yet the government appears wedded to it. And why should any local authority invest public money in the provision of new social housing if, in three years’ time, they might be forced to sell it off at a discount.
Not enough new homes being built
I suspect that one of the reasons why fewer new homes are being built today than in previous decades, is that housebuilding is no longer as profitable as it once was. There are too many things getting in the way: one of them being shopping-list planning policies which are not only administratively slow but can also reduce the viability of a proposed housing development. It is quite right that any housing development must stand the cost of upgrading the public infrastructure required to serve the new development, including education and social facilities. It is also fair that someone who benefits financially from the grant of a large residential planning permission should contribute to the cost of providing affordable housing to those who cannot afford to buy privately on their estates. The issue is that the process of securing on-site affordable housing through the planning system is too cumbersome. Many housebuilders would quite willingly make a financial contribution towards the provision of off-site affordable housing, just to get the development of the ground, and which the local housing authority could then spend as it thinks appropriate in providing new affordable housing. And wouldn’t many cash-strapped housing authorities prefer a simple cash-injection?
The number of empty homes
According to official statistics, during 2022, the number of long-term empty homes in the UK stood at 248,633, up 5% on the previous year and which has increased annually since 2011 (excepting only the covid years). But it can’t be right that someone can choose to keep a residential property empty and unused whilst other people do not have a permanent home. In many of these cases, there are reasons why the property has remained empty for many years instead of being brought into beneficial occupation and use. An owner may have died or moved abroad or into residential care. Their whereabouts may have become untraceable. Perhaps no one has taken out probate in relation to a deceased’s estate. Maybe a property has remained empty for so long that it has become dilapidated and uninhabitable. But that doesn’t help Britain’s Housing crisis.
What about re-introducing rent controls? Wouldn’t that solve the crisis in rental accommodation?
Sadly no. Statutory rent controls never worked in the quarter century they were in force until their abolition by the Housing Act 1988. And there is no reason to suppose that they would work any better now. Until statutory rent controls were abolished at the beginning of 1990, safe legal advice to anyone thinking of renting out their home was “don’t”. Letting out a residential property carried too much risk. It wasn’t just that you might never get your property back. The rents you received for your property were not in your control. A rent tribunal could reduce it to a derisory level. Not only would you be accommodating another family. You would also be subsidising their living costs, even if they had more disposable income than you did. No one is going to volunteer to do that. It’s why someone working temporarily abroad might have been advised simply to leave their home empty, instead of renting it out to someone else.
What about the proposed abolition of section 21 no fault evictions?
Abolishing section 21 will give existing residential tenants a little more peace of mind, provided they keep to the terms of their tenancy. But it’s not going to make private renting more affordable. When section 21 was originally introduced by the Housing Act 1988, it was to give prospective residential landlords the confidence to let out their properties safe in the knowledge that they could get back vacant possession when needed. Back in 1988, no-fault eviction was not problematic for residential tenants because it was a new market and there were so many alternative properties to move into. Contrast that with the position today, where someone evicted from their existing rent the property might have nowhere else to go.
What about stamp duty holidays? Would that help first time buyers?
The problem with stamp duty holidays is that it leads to a stampede as desperate homebuyers try to get their purchases completed before the holiday ends. It’s great for Sellers, who can soak up the value of the tax-break by increasing property prices.
Here are the solutions which will work
Abolish right to buy. Now! It won’t solve Britain’s housing crisis. But it will stop it getting worse. It will also give councils the confidence they need to invest in the provision of new affordable housing, safe in the knowledge that it will be kept permanently available to meet future housing need.
Make the town planning system 100% self-financing, so lack of resource can no longer provide an excuse for delay. Where local planning authorities are still unable to determine planning applications within the statutory turnaround time, give developers the right to refer their planning applications to independent expert determination. The statutory appeals process is just too slow.
Give housebuilders the option of meeting their affordable housing responsibilities by paying a commuted sum to the council’s housing revenue account, to be spent on the provision of new affordable housing in the way the council considers most appropriate. Councils would love it. So would housebuilders. Make it part of the community infrastructure Levy.
Free up 248,633 long term empty homes by putting them in to public auction. Councils already have powers to compulsory purchase long term empty dwellings. But like the Empty Dwelling Management Orders, introduced by the Housing Act 2004, they are too slow and cumbersome to be of any practical use. So why not create a swift summary process whereby councils can apply to a magistrates’ court for an order forcing the sale of a long-term empty property?
For councils and other social housing providers to use the current collapse in the housing market to replenish their housing stock. There is no better time to do it. Yes-interest rates are currently high. But they won’t always be high. And think about the massive savings in the housing benefit budget if councils no longer had to rent back from private landlords to meet their statutory housing responsibilities.
Now the big question.
Will these ideas work in solving Britain’s Housing crisis? You can bet they will!
As a published legal writer it is always encouraging to receive positive editorial feedback. Here is something I received January 24th 2023 from Jamie Lennox, the Editor of Today’s Conveyancer. I also enclose a link to the article which generated that feedback.
Dear Viv
I hope you’re well. Just wanted to drop you a note regarding your recently published piece on Leaseholder Deeds of Certificate. It’s been incredibly popular with our readership: the data shows it’s been read more than any other piece over the last 7 days, and we’ve heard it’s been shared on social media and Rob Hailstone’s Bold Legal Forum too. Thus, a big thank you is in order from me!
I think it’s particularly relevant to the current discourse surrounding the ever-increasing complexity of conveyancing. I’ve heard one conveyancer suggest a separate law degree is required for the BSA 2022 alone! With climate change guidance just around the corner from the Law Soc, I imagine a similar conversation will take place.
Should you want to follow up this piece with any more guidance/best practice, we’d bite your hand off. Let me know your thoughts.
We have been asked to recommend books to help residential leaseholders understand their rights. Here is a link to our selected books from a variety of authors, each of whom are experts in their field. They cover everything from service charges, lease-extensions, buying out a landlord’s interest. How to deal with a difficult ground-landlord.
BRUCE AND HOLLY 