Evaluate the Housing Act 2004

In March 2003, the draft Housing Bill was published for public consultation and pre-legislative scrutiny. The ODPM Select Committee report on the draft Housing Bill was published in July. The Government response to this report was published on 10 November 2003. Regulatory Impact Assessments have been prepared for each of the main provisions of the Act. These set out the impact each proposed provision will have on business, charities or voluntary bodies. In April 2004 The Housing Bill Race Equality Impact Assessment was published for consultation. The response to that consultation was published in October 2004.The Housing Act 2004 received royal assent on 18 November 2004.   The main political aims of the Housing Act are to:

  1. Tackle low housing demand and the problems of anti-social behaviour
  2. To deal with poor quality Housing
  3. To assist with the supply of affordable housing
  4. To reform the home buying and selling process; and
  5. To make additional housing provision.

This Act consists of 270 sections and 16 Schedules. It is not therefore possible to give more than a brief outline in this bulletin .   This assignment will look in detail at the main sections of the bill and discuss some of the criticisms of this scheme together with some of the advantages.  This assignment will review this new legislation, by first considering the green paper in detail and then considering the enacted legislation and discuss whether or not this legislation has meet with the aims contained within the Green Paper.  It will be concluded that whilst many of the aims have been meet, many have not.  It will be argued that whilst it is early days there are some significant failings within the new legislation.

2    The Green Paper and Consultation

Chapter 1 of the Green Paper provides an overview for the rest of the paper, the substantial sections will now be considered in more detail. This chapter sets out the vision in housing for the 21st century.

2.1    Chapters Two and Three

Chapters 2 and 3 of the Green Paper dealt with the strategic role of the Local Authority in much the same way as was implemented in the final bill.  One thing that was implicit rather than explicit in the Green Paper, was the Local Authority’s capacity to understand and influence local housing markets.  Councils, it was argued, need the ability to intervene in local markets to address differences between varying demands and the supply of appropriate housing to meet them. 

According to a report by CIH with CML many Local Authorities already have these powers .  Of local strategies which claim to do so, few have comprehensive assessments of the local housing market.    In contrast, guidance in Scotland  shows a much more comprehensive approach.  In consequence, rural housing strategies in Scotland are often more ambitious than those in England.

2.2    Chapters Four and Five

Chapters 4 and 5 of the Green Paper sketched out a new role for councils in dealing with the older private sector stock in their areas. 

It was suggested that councils take on a wider role in relation to local markets, and that this would put a premium on the relationship at strategic level between housing and planning, an area already identified as underdeveloped by the Green Paper.  This was criticised however as being less well researched .   The Paper contained two proposals:

  • A possible wider obligation on RSLs to respond to homelessness
  • The possibility of a stronger role for LAs in the monitoring and
    funding of RSLs, especially if they have given up the direct landlord role.

These proposals were in the main supported.  However it was suggested that there should be some building on the success of joint commissioning and that Local Authority’s should also be required to have in place a Best Value procedure for allocating Local Authority SHG.  It was also suggest that any consideration given to developing a role for Local Authority as in monitoring performance of RSLs, should be seen within the context of a regulatory regime remaining in place at national level .

The main proposal of the Green Paper was to encourage sustainable home ownership and this was contained in Chapter 4 of the Green Paper.  There was an assumption running through this section of the green paper that home ownership was the best and securest tenure and that people should be encouraged to own there own home. This was criticised on the basis that those on low income often find it difficult to sustain ownership of their own home.  It was suggested that more measures should have been introduced to support low income home owners. Currently, only 8% of state help with housing costs to low income households goes to home owners, yet around half of all poor people are home owners .

This part of the paper also sought to improve the position for key workers by introducing low cost high quality starter homes.  The Joseph Rowntree Foundation showed that it was possible to provide housing at rents which are affordable to at least some key workers and still make a reasonable return on the investment.

2.3    Chapter Five

Chapter 5 of the Green Paper dealt with the promotion of a healthy private rental sector.  The overall aim was to help good and well-intentioned landlords to thrive and raise standards further and to persuade reputable investors to invest in order to expand the supply of decent rented homes and to compel the worst landlords either to perform better or to leave the sector altogether.

In consideration of this aim the government the government took on board the findings of Policy Action Team 7   and recognised  that in areas where the private housing market has effectively collapsed, there are often particular and distinct problems relating to the way the private rented sector operates. The availability of very cheap properties (sometimes as little as £3-4,000 each) attracts those looking for quick profits, but who may not be interested in the neighbourhood, nor the welfare of their tenants. Low property values means there is no financial gain in maintaining or repairing properties, so poor conditions are prevalent. The high levels of housing benefit claimants living in many of these areas mean that public money is effectively being wasted on poor condition dwellings.

An example of such a problematic neighbourhood is an area consisting of approximately 250 houses in Gorton, Manchester. Several years ago, these properties were almost entirely occupied by the owners. Now there are over 80 different private landlords operating in this area. If regeneration is to be made to work, measures are needed to enable strategists to have some influence over the private sector.

2.4    Chapters Six and Seven

Chapters six and seven of the paper set out the governments proposals in relation to securing the improvement of housing stock.  This included proposals to tackle the backlog of disrepair in council housing, various options for the future of the Local authority housing, proposals to modernise the stock transfer and finally these proposals dealt with arms length companies.

The Government’s recognised that  the investment backlog in council housing was £19 billion and in the Green Paper proposed that this could be dealt with within ten years   The key requirement is that the combination of stock transfer and work done by local authorities which retain their stock is resourced adequately to deliver the Government’s target.  It is particularly important that there are adequate resources for the new system of Resource Accounting and Budgeting.  An assessment done by Graham Moody Associates for the IPPR Inquiry  suggests that, if stock transfer takes place at the rate of 150-200,000 per year, the extra investment needed to meet the target, over current levels, is between £300-500 million each year, but that it declines over the period. 

The Government in the Green Paper pressed for more competition in the transfer process, although it was argued that there were potential conflicts with the way that transfer proposals are developed locally in response to tenants’ wishes.

The Government also made clear its intentions to foster more diversity in transfer but  discouraged estate-based transfers by ending the Estates Renewal Challenge Fund. 

This chapter also dealt with the governance of social landlords.  Paragraph 7.49 of the Green Paper stresses the importance of developing models of governance which support resident control. There is however a wider issue in relation to how accountability to stakeholders sits with the need for an effective business decision making process. The current situation is that RSLs have disparate and ill-defined routes of accountability, and this should be addressed as part of a review of governance arrangements.

CIH has recently published the report Winning Structures ], a publication which seeks to outline some of the approaches that might be developed for reforms in this area.  As well as the issue of accountability, the report stresses the need to develop structures which recognise the diversity of the sector; allow RSLs to establish their boards to meet explicit requirements of skills and competency; allow payments to board members, and define more clearly the roles of executive and non-executive directors. 

5    Chapter Eight

Chapter 8 of the Green Paper dealt with the Government’s policy aims in relation to new and affordable housing and dealt with changes to housing financing and planning policy.   The government sought to do this by improving links between supply and demand at local level and catering for variations between regions; improving quality design and efficiency and by better integration of social and private housing. 

The Green Paper does not present any national estimates of the levels of affordable housing which are likely to be required in the near future. It claims that in the current year, Social Housing Grant (SHG) channelled through the Housing Corporation’s Approved Development Programme (ADP) and local authority supported programmes (LASHG) will support the provision of 40,000 affordable homes for rent or shared ownership in England, once private finance has been levered in.

CIH fundamentally disagrees that provision of affordable housing is a matter only to be resolved at local level. We believe that there is a need for much more sophisticated analyses of housing need than those in which most local authorities are currently engaged, which take on board the wider housing market to a far greater extent. This was the finding of a recent study undertaken jointly with the CML .

Currently, there are several national estimates for affordable housing need in England.. Three of these are given below:

  • Shelter’s recent Social Housing Investment Programme (Shelter, 2000)  which gives detailed evidence pointing to the need for 107,000 affordable homes each year until 2016, in order to meet new housing need and reduce the level of unmet need by two thirds.
  • The projection accepted by the latest House of Commons Inquiry, the mid point of which was 80,000 affordable homes per annum
  • A projection based on methodology which takes into account the prevailing economic climate from the Department of Applied Economics at Cambridge University. This study, commissioned by DETR,  estimates that between 22,000 and 77,000 properties are required in any one year . This model received very little acceptance at national level, because the assumptions upon which it is based were unrealistic. Also, because it presents such a wide range, any figure within this band needs to be justified against the assumptions used to deliver the estimate. The Government’s figure of 40,000 does not appear to have been justified in this way.

The level of public money required to provide the estimated number of properties needed to meet the House of Commons Inquiry estimate is £2,340 million. Subtracting from that the 2001/2002 ADP budget of £789 million, and allowances for LA SHG and planning gain, suggests a requirement for an additional £823 million of capital resources.

2.6    Chapter Nine  & Ten

Chapter 9 of the Green Paper deals with choice in social housing.  The government’s stated objectives in relation to this were to empower people to make decisions over where they live and exercise choice to help to create sustainable communities and to encourage the effective use of the nations housing stock.  Chapter 10 of this paper deals with the move to a system of affordable rents.   Restructuring will be phased over ten years or so, to help minimise disruption and hardship for tenants and landlords and it was proposed that any changes in rents should be limited to no more than £2 per week in any year as a result of rent restructuring.  The Green paper set out several options in this regard.

The first of these was to set rents based on the affordability for individual tenants. Although that ‘affordability’ is effectively rejected in the Green Paper proposals, and effectively not considered except very generally in that social sector rents are believed to be affordable because they are on average 30-40% below market levels.

The second of these proposals was that a points system be introduced. Points systems are a means by which factors affecting rent levels are reflected in policy and procedures, rather than setting the rent setting principles or factors themselves.  The Green Paper makes the point that points systems are inflexible and take account only of features that can be easily measured. 

On the other hand points systems can provide ‘the sort of clear and sensible link between rents and the quality of rented homes that we are looking for ’ But if they are to adequately reflect market factors such as location, this would probably need to be linked to some measure and evidence such as property prices or market rents in the vicinity.

The third approach that was suggested was to apply a discount on market rents. The Green Paper comments that “there are substantial practical difficulties with this option”, and these difficulties would seem to rule this option out.  The difficulties of there being ‘not enough privately rented properties similar to social rented properties to provide the necessary market evidence’ would also be relevant to using rents rather than property prices in any of the other models. 

The fourth option was that it be based on property values. The need for subsidised social housing exists because the free housing market does not work for  everyone, and there are dangers of linking rents to a market which people on low incomes cannot compete in.

The fifth option is to follow the Housing Revenue Account Guideline Rent System This type of approach begins to develop hybrid models which take into account and balance the different and potentially competing factors of ‘value’ and ‘affordability’, and as such are more likely to achieve the balance required for a coherent system of social sector rents.

The ‘HRA’ approach is shorthand for a model which takes account of property values but which balances them with data on local incomes, to reflect ‘affordability’. In the calculation of notional rents for HRA subsidy, a 50:50 balance between property values and incomes is used. Giving greater weighting to incomes in the formula produces a flatter and generally lower rent structure.

The sixth option is to set rents so that they cover landlords running costs with an additional element based on property values. This option has a number of complications of data and calculation, as set out in the Green Paper, and may be too close to the ‘accountancy’ calculations for rent setting used by LAs and RSLs which have not on the whole produced coherent rent structures which adequately reflect market factors.  It also gives a less differentiated spread, because (notional) running costs are quite similar across the country.  

2.7     Chapter Eleven

Chapter 11 of the Green Paper considered the current system of housing benefit and examined the current system of housing benefit and looked at the long term and the short term reforms which could improve delivery.  The key proposals included a package of administrative changes to facilitate the processing of benefit claims; a package of benefit rule changes which were designed to simplify administration, reduce fraud and error and improve benefits delivery; changes to benefits that would help improve work incentives and finally changes to the structure of housing benefit that would ensure that tenants had a greater interest in the rent that they will pay.

As part of an overall simplification package the Government proposed the following :

  • making four week extended payments automatic when claimants start back to work
  • A new independent appeals process for claims from April 2001
  • Administrative simplifications to rent officer determinations introduced in January 2000
  • plans to consolidate the regulations and guidance.

The Green Paper suggested a number of further options which could result in simplification of the existing scheme.  These include:

  • rationalisation of transitional protection schemes, in particular the various parallel schemes for the referral of claims to the rent officer
  • simplification of the rent limitation rules (including local reference rents) for private sector tenants
  • a simpler structure of non-dependant charges.

3.    The Housing Act 2004

3.1    Part One

One major aspect of the strategic role, which is implicit rather than explicit in the Green Paper, is the LA’s capacity to understand and influence local housing markets.  Councils need the ability to intervene in local markets to address differences between varying demands and the supply of appropriate housing to meet them. 

But do councils have these abilities?  According to a recent report by CIH with CML many do not.  Of local strategies which claim to do so, few have comprehensive assessments of the local housing market.  Furthermore, forthcoming DETR guidance on assessing housing needs (mentioned in para 3.9 of the Green Paper) is likely to concentrate on the need for affordable rented housing, exactly the limitation which this report identifies.  In contrast, guidance in Scotland [4] shows a much more comprehensive approach.  In consequence, rural housing strategies in Scotland are often more ambitious than those in England.

Part 1 of the act deals with housing fitness and contains provisions originally contained in the Housing Act 1985.   This part of the act deals with the current housing fitness standard and introduces a new Housing Health and Safety Rating System. (HHRS)Assessment under the HHSRS will be based on evidence of risk to the occupant, with two new categories of risk: Hazard 1 and 2. Like the previous regime, a local housing authority can serve and enforce an improvement notice; a prohibition order; a hazard awareness notice; a demolition order; or declare a clearance area. It is uncertain whether the government will bring the Environmental Health Act 1990, which refers to the current unfitness test, into line with the HHRS. Details of the HHRS and its enforcement will be dealt with in secondary legislation .  It is not the intention of the HHSRS to set standards but instead it is to be used as a means by which objective information can be generated to inform decisions as to when enforcement action is appropriate.  This assessment will be based on the risk to a person who would be most vulnerable to that particular hazard if they lived in that property.

The HHSRS comprises of 29 categories of hazard and includes factors that were not considered old fitness standard . The HHSRS does not provide for a single overall rating for the dwelling but provides a rating for each hazard. Each hazard rating will be a numerical score which will fall into one of ten bands (A to J). The scoring system will be defined by regulations. The top three bands (A to C) with the highest score will be rated as category 1 hazards while the bottom 7 (D to J) will be category 2 hazards.
Generally an authority will have a duty to take the most appropriate enforcement action where a category 1 hazard exists and the power to do so where a category 2 hazard exists. There will be various options open to the authority and these are listed below: 

  • To serve a hazard awareness notice.  Such a notice will advise the person on whom it is served of the defect and what remedial action should be taken
  • To serve an improvement notice
  • Which will require the owner to carry out remedial action. A person who fails to comply with a notice commits a summary offence and can be fined up to level 5 on the standard scale.
  • Serving a prohibition order. The order may prohibit the use of all or part of the building for some or all purposes. A person who fails to comply commits an offence and can be fined up to level 5 on the standard scale and a further £20 for each day they continue to use it a prohibited use.

Serve a demolition order, or where there is more than one building affected declare a clearance area if every building in that area is either affected by a category 1 hazard, or is dangerous or harmful to the health of the residents.

The authority has the power to make a reasonable charge to cover any administrative or other expenses associated with any of the above courses of action.  The authority also has powers to take emergency remedial action where a category 1 hazard exists if it ‘involves an imminent risk of serious harm to the health and safety of the occupiers’. Action includes any of the options available for a category 1 hazard above. A person affect by emergency prohibition order may appeal to a residential property tribunal.

3.2    Part 2
Part 2 of the Housing Act 2004 repeals Part 11 of the Housing Act 1985 which deals with houses in multiple occupation. The new provisions introduce mandatory licensing for houses in multiple occupations with three storeys or more and with at least five occupiers.  This new legislation gives the Local Housing Authority the power to designate part or all of its area for additional licensing. There is also a new statutory definition of houses in multiple occupancy which is set out in Part 7

Compulsory licensing of houses in multiple occupancy is designed to tackle the difficulties with poor quality, poor safety and poor management which are disproportionately experienced in this sector.  Local authorities do already have this power to require registration of this kind of housing but it is argued that these powers have not been used adequately.  

Local authorities can grant a licence if they are satisfied that the management arrangements are satisfactory, that the house is suitable for occupation, and that the landlord applying for a licence (and the manager of the property, if different) is a ‘fit & proper’ person to manage the property.  These new licences will detail  the maximum number of occupants which can live in the property.
It is yet to be seen how ‘Suitable for occupation’ will be applied, however the guidelines indicate that this means that the house must have sufficient number and quality of facilities for toilet, washing, cooking, and laundry for the number of people specified on the licence.  Similarly it is not clear how the test of ‘Fit & proper’ will be applied but the guidance indicates that this means that that the licensee and manager do not have convictions for violence, fraud, drugs, discrimination or breaches of landlord-tenant legislation.
Licensing conditions must include requirements to provide the local authority with a gas safety certificate; to keep electrical appliances, furniture and smoke alarms safe and in working order and provide a written declaration on request; and to provide written terms of occupancy to residents.
The local authority may specify additional requirements about control of ASB, provision of facilities, improvement of condition, occupation of areas of the property, or attendance of training courses.
If an HMO does not reach the required standards, the local authority can grant a licence on condition that these standards are met within a set period of time. The local authority can step in to manage HMOs which do not have a licence (either because the landlord will not apply or because one has been refused), initially for up to 12 months. Provisions for local authority management are set out in Part 4, below.

3.3    Part 3

Part 3 of the act deals with the licensing of Private Rented Sector. The Government Consultation Paper: Licensing in the Private Rented Sector states the case for the licensing of HMOs. According to the Government, 10 per cent of housing in England is privately rented, nearly two thirds is owned by private individuals, many of the tenants are vulnerable and/or claim housing benefits and the housing provided is often associated with poor conditions and unscrupulous landlords. The provisions in Pt II of the Act aim to improve conditions for tenants .

Part 3 of the Housing Act gives Local Housing Authorities the discretion to extend licensing to other houses in multiple occupation (HMO) that do not fall within Part 2. The powers are intended to be used in areas of low housing demand or where there are particular problems, such as anti-social behaviour. Local Housing Authorities, following consultation and approval by the Secretary of State, can make it mandatory that all private landlords in a designated area are licensed in order to ensure minimum standards of management.

The new act produces a two-tier scheme with "Mandatory Licensing" and "Additional Licensing" for certain types of HMO’s.

The test for mandatory licensing  will be contained in secondary legislation but the intended test has been publicly stated to apply to HMOs with three or more storeys with five or more persons living in more than one household. HMOs such as these are seen as presenting significantly greater health and safety risks than comparable single occupancy buildings.
In addition to mandatory licensing, each local authority may use its discretion to apply additional licensing  to HMOs in a particular area and/or category of HMO if it considers that a significant proportion of such HMOs is being managed sufficiently ineffectively to give rise to problems for the occupants or the public. The Local Authority must publish notice of any such designations .

The definition of an HMO  is not straightforward. It is summarised in the 2004 Consultation Paper as a building or part of a building (e.g. a flat):
-    which is occupied by more than one household and in which more than one household shares an amenity such as a bathroom, toilet or cooking facilities; or
-    which is occupied by more than one household which does not entirely comprise self-contained flats (whether or not there is a lack of amenities); or
-    which consists entirely of converted self-contained flats and the standard of conversion does not meet, at a minimum, that required by the 1991 Building Regulations and less than two-thirds of the flats are held on long leases or by freeholders

An HMO must be "occupied" by more than one household as their only or main residence (or for other uses such as a refuge or by students in full-time education). "Household" basically means a family (including cohabiting as man and wife, stepchildren and same-sex relationships) and other relationships to be prescribed in the secondary legislation but expected to include domestic staff, fostering and carer arrangements.

It is easy to form a picture of a "traditional" HMO. However, the definition will also apply to less traditional HMOs for example:

-    Where a building includes a mixture of self-contained and non self-contained accommodation, the whole building will be an HMO (not just the part that is not self-contained) and the self-contained parts will be taken into account when calculating the number of persons in occupation and the number of storeys of the building.

-    Where a building is used for bed and breakfast, partly for homeless people and partly for holidaymakers, the building may be classed as an HMO if the local authority is satisfied that the persons occupying the building as their main residence comprise a significant use of the building.

-    Where a building has been converted into self-contained flats some time ago and the conversion works do not now comply with the Building Regulation standards laid down in 1991 the building will be an HMO if less than two thirds of the flats are owner occupied regardless of the location and quality of the flats, the rent paid and evidence of any poor condition, lack of amenities or poor management.

It is worth repeating that an HMO will not automatically be subject to the licensing regime. It will only need to be licensed if it meets the mandatory licensing test or is within an area or class of HMOs designated as being subject to additional licensing.

A licence cannot be granted for longer than five years, but may be granted for a shorter period and may be revoked if breached.

Obtaining a licence
A licence must be obtained from the relevant Local Housing Authority ("LHA") for each HMO to be licensed. A fee is payable. The LHA must grant a licence if the conditions of s.64 of the Act are satisfied, namely that:

-    the HMO is reasonably suitable for occupation by not more than the number of persons or households permitted by the licence;

-    the licence-holder is a fit and proper person (having regard to matters such as previous convictions for violence, sexual or drug offences or fraud, convictions for breach of landlord and tenant legislation or unlawful discrimination) and is the most appropriate person to hold the licence;

-    the proposed manager, if not the licence holder, is a fit and proper person to be the manager; and

-    the proposed management arrangements for the HMO are satisfactory.

If a licence is refused the LHA must give the applicant reasons for refusal and allow a 14-day period to appeal to the Residential Property Tribunal. If an application is refused, or revoked, an Interim Management Order must be granted and the LHA must take any immediate steps that it considers to be necessary to protect the health, safety or welfare of persons occupying the house, or in any premises in the vicinity.

A licence may include such conditions as the LHA considers appropriate for regulating the management, occupation and use of the HMO its condition and its contents (s.67). The following mandatory conditions will apply in all cases:

-    that the number of occupants of the HMO does not exceed a specified level;
-    that a current gas safety certificate is produced on an annual basis;
-    that electrical appliances and furniture provided by the licence holder are kept in a safe condition and to supply evidence of this on demand;
-    that smoke alarms are installed and kept in proper working order and on demand the licence-holder will provide a declaration to the LHA as to the condition and positioning of such alarms;
-    that each occupier is supplied with a written statement of the terms on which he occupies the premises.

A licence may be revoked by the LHA (s.70) if the licence-holder is in breach of a condition of its licence, is no longer a fit and proper person or where an HMO ceases to be one that requires a licence. There is a procedure for appeals.

A licence-holder or manager of an HMO is liable to a fine of up to £20,000 if it fails to obtain a licence or allows the limit of persons occupying the premises to exceed the number specified in the licence (s.72). Other breaches of an HMO licence may result in a fine of up to £5,000.

An application may also be made to a Residential Property Tribunal for a rent payment order diverting payments of rent or housing benefit from the licenceholder.

HMOs already licensed under existing registration schemes with control provisions may be "passported" into the new regime until the expiry of that registration period, easing the compliance burden (s.76).
The period for consultation on the proposed secondary legislation expired on February 9, 2005. It is not anticipated that the provisions of Pt II of the Act will be in place before autumn 2005 and the LHAs face a daunting task in publicising and preparing for the new regime.

3.4    Part 4
Part 4 of the Act contains provisions that deal with management orders in respect of occupied and empty premises.

Such management orders can be applied to HMOs or private rented properties where selective licensing is in place. They will be used by local authorities to ensure the health & safety of tenants or neighbours to the property, and good management of property where licensing has not achieved this.
An IMO must be made where either: a licence has been revoked; or is required but is not in place, and there is no prospect of a licence being granted. One can be made for an HMO not covered by section 2, if permission is given by the housing tribunal. They last for 12 months. Once an IMO is granted, the local authority must take immediate steps to protect health & safety, and ensure the property is insured against fire. Under an IMO the local authority can undertake any necessary work, and can grant tenancies/licences (but only with permission of owner). The owner loses all rights to manage the property and collect rent, though they can still sell the property. The local authority can deduct relevant expenses from the rent collected, but must account fully for its expenditure. The authority gains control of existing furniture and fixtures and can supply replacements as necessary.
A final management order must be made where a licence still cannot be granted after an IMO, or where it is felt necessary to continue to protect the welfare of occupants. The order will contain a management scheme, which the local authority will follow. This sets out how the problems which led to the property being unlicensed will be remedied, a schedule of works, costs, expected income, and proposed payments to the landlord. The local authority can grant tenancies without permission as long as they do not exceed the length of the FMO.
The local authority must serve notice of making, varying or revoking an order on the landlord and all occupants.
This part of the act also deals with Empty Dwelling Management Orders; such orders will give local authorities the powers they need to bring empty properties back into use.  If properties have been empty for over 6 months and they have permission from the residential property tribunal, a Local authority can make an interim EDMO for properties which have been empty for more than 6 months, They will only be granted permission if there is a reasonable prospect that the building will become occupied if an EDMO is made.  Such an order can be made against an owner or a lessee if they have a lease of 7 years or longer, and will last for 12 months.
If and once such an order is granted, the local authority must take steps to get the property occupied and ensure that there are in place good management standards.  As they in effect take the place of a proprietor they will have to carry out repairs and grant tenancies etc. The authority must account fully for its income and expenditure.
Local authorities can serve an overcrowding notice on the owner/manager of an HMO if they believe the property is or will become overcrowded. The notice will specify how many people can occupy each room, any rooms which cannot be used for sleeping, and that adults of opposite sexes who are not a couple cannot sleep in the same room. The notice will apply to future occupants as well as those in residence on service

3.5    Part 5
Part 5 of the Act deals with the controversial Home Information Pack.  The Home Information Pack is to be provided to potential purchases by any person responsible for marketing a residential property with vacant possession. Contents are likely to include details of title and reports on the physical condition or energy efficiency of the property.

Home Information Packs have been on the cards for many years now and they are not without controversy.  The purpose of Home Information Packs is to: ensure that buyers and sellers are better prepared and have as much information as possible right from the start; secure faster mortgage offers and search replies; reduce delays and uncertainties; and help address a number of problems caused by delays, including gazumping and problems in chains. All Home Information Packs will include a Home Condition Report.

The Act transfers jurisdiction (in England only) from the secretary of state to a residential property tribunals (RPT) as to the landlords decision that a property is not eligible for the right to buy because it is particularly suitable for the elderly. The factors to be considered when making such a decision are not altered by the Housing Act 2004 however, the Government has already consulted on new statutory guidance which may be relevant when either the local authority makes the initial decision or on appeal to a RPT.  In fact, the RPT is not new--it is a new guise for Rent Assessment Panels from which Rent Assessment Committees and Leasehold Valuation Tribunals are already constituted under the current law. Since 2001, the Panels have operated under the auspices of the Residential Property Tribunal Service, sponsored by the Office of the Deputy Prime Minister and with chairmen appointed by the Lord Chancellor.

The new tribunal, however, will not only deal with disputes but will also have a supervisory jurisdiction in respect of discretionary management orders and EDMOs because a local authority will not be able to put either type of order in place without the prior approval of the RPT.

Local authorities (and other landlords with secure tenancies eligible for the RTB) will need to be able to distinguish between all tenancies made before and after 18 January 2005 as well as the date of the sale (see implementation) as this will determine the qualifying period, the discount repayment rules and whether the landlord has a right of first refusal on resale. Particular care must be taken with existing tenants when they exercise their right to exchange. Exchange should be made by deed rather than by termination and re-grant otherwise the tenant may have grounds to sue.
Landlords will need to have clear policy guidelines in place as to the circumstances in which they would consider waiving whole or part of the discount where they are entitled to repayment. Landlords who have no clear policy in place are more likely to be subject to legal challenge. Any policy should allow for exceptional circumstances.
Local authorities will need to consider how they will provide information and advice on the right to buy scheme and whether existing procedures and material

3.6    Part 6
Part 6 of the act contains miscellaneous provisions.  These provisions include extension of  the duration of introductory tenancies by a further six months; an amendment to the rules relating to the right to buy; altered rights and protections from eviction to gypsies and those who live in mobile homes; the introduction of tenancy deposit schemes for shorthold tenancies; details of regulations that can be made by the  in relation to overcrowding and energy efficiency in residential accommodation; allowing a local housing authority  to provide social housing grants to persons other than registered social landlords; disabled facilities grants to caravan dwellers; the imposition of a duty on local authorities to have regard to the accommodation needs of gypsies and travellers and finally the setting op of a social housing ombudsman for Wales.

One of the important changes to this section is the alteration of the right to buy scheme. 
For all secure tenancies that begin on or after 18th January 2005 the right to buy will only arise if a tenant has occupied public sector accommodation for a period of five years, this has obviously changed as this used to be only two years. The amount of discount that such tenants can hope to attract will be 35% (instead of 32%) for a house and 50% (instead of 44%) for a flat plus a further 1%, in respect of both types of premises, for each year the qualifying period exceeds five years (instead of two years).
The right to buy will not arise if a final demolition notice is in force in respect of a dwelling house. Such premises will be excluded from the scheme. Section 182 of the Housing Act 2004 inserts new paras 13-16 into Schedule 5 of the Housing Act 1985, which contain detailed provisions about demolition notices and their effect on the right to buy.
A final demolition notice is a notice that states the landlord intends to demolish the premises within 24 months of the notice being served. Where the landlord proposes to rely on this exception, the prescribed notification process  must be complied with-reference should be made to the Act for the relevant details, particularly para 13.
The service of a final demolition notice will also suspend the effect of an existing right to buy to claim upon the notice coming into force .
A notice will not be "in force" unless it is served and advertised in accordance with the new provisions. The period for which the notice is in force may be extended by the Secretary of State upon application by the landlord, an extension which may be subject to requirements and may only be sought during the period when the notice is in force.
A new paragraph 15 of schedule 5 of the Housing Act 1985 is created and this provides that if the landlord decides not to demolish the premises, he or she must advise the tenant of this as soon as is reasonably practicable by serving a "revocation notice", which states the date on which the demolition notice will cease to be in force. A revocation notice may also be served by the Secretary of State.

Section 138 of Housing Act 1985 places an obligation on the landlord to complete the conveyance or grant to the tenant where all matters have been determined. This provision is amended by s 183 of the new Act: the obligation is removed where an initial demolition notice has been served on the secure tenant and terminates the right to buy claim where a final demolition notice comes into force. If an established right to buy claim fails because of these provisions, the tenant may be entitled to compensation for expenditure reasonably incurred by him in respect of the claim, if sought within three months of the demolition notice coming into force.
Once a right to buy claim has been established the requirements of purchase have been determined, the landlord may, pursuant to s 140 of Housing Act 1985, serve a notice to complete on the tenant. A minimum period must elapse before this notice can be served. This period is amended to three months by s 184 of HA 2004 in relation to claims made by the tenant on or after 18 January 2005.
If a tenant resells the premises acquired pursuant to the right to buy within a specified period, the tenant may be required to repay the discount obtained. Both the period in which a resale may be subject to the repayment provisions and the amount of the repayment have been amended by ss 185-187 of the new Act, which came into effect on 18 January 2005.  This period was previously three years and the amount of repayment would depend largely on when the resale occurred.   For those grants or conveyances made after the new provisions became effective, the repayment period is five years.  The Housing Act 2004 inserts new ss 155A and 155B into Housing Act 1985. These provide that the landlord may seek to recover an amount based on the original discount. The amount that may be sought is subject to a maximum: a percentage of the amount paid for the first disposal, which percentage is equal to percentage discount on the value of the premises as determined for the tenant's right to buy claim, pursuant to s 127 of the Housing Act 1985. In determining the amount of repayment, allowance will be made for improvements made to the premises by the RTB tenant.
This section also deals with "Deferred resales" which are, essentially, agreements entered into by the right to buy tenant within the repayment period to sell the property after this period, and so avoid having to repay the discount. Such agreements, if made on or after s 187 of Housing Act 2004 came into effect, will be "relevant disposals" for the purposes of the repayment of discount provisions.
Section 156A of the Housing Act 1985, which has been inserted by s 188 of the Housing Act 2004, provides that any grant or conveyance that is made pursuant to an RTB claim made on or after 18 January 2005 must contain a covenant that if, within a period of 10 years beginning with the date on which the grant or conveyance was made, the RTB tenant must make an offer of first refusal to his former landlord or such other person as may be provided for by regulations.
Subsections 192 and 193 of the Housing Act 2004 allow landlords to apply to court for a suspension of the right to buy in circumstances of anti-social behaviour. The court will only make a "suspension order" if it is reasonable to do so. In addition, the landlord will not have to complete an RTB sale in circumstances where an application for a suspension or demotion order is pending.

Part 7 of the act deals with supplemental provisions and this part transfers the jurisdiction of rent assessment tribunals to the new Residential Property Tribunal who are required to maintain a register of licences and management orders; and there is power to approve codes of practice for the management of HMOs. Part 7 also provides for documents and other information to be produced. There are powers for entry to property.

4.    Conclusion

This assignment has demonstrated, in as much detail as possible, some of the key changes that the Housing Act 2004 has made to housing law in the UK.   It has demonstrated the process of the paper through parliament and has demonstrated that the Government’s position has remained fairly static since the Green Paper. It is clear that the new Act makes sweeping changes to well established LHA powers and duties. The objectives of the Act are achieved insofar as they are consistent with the government's housing policy. Impressively, the government has responded positively to Strasbourg jurisprudence  by including provisions in s 225 to assess the accommodation needs of gypsies and travellers and safeguard their Art 8 rights. Given that much of the minutiae of Parts 2-4 is yet to be drafted, it is difficult to say how workable or effective the HHSRS assessment process or the new licensing schemes will prove to be . Only time will tell how successful this new legislation will prove to be, however it can be said with confidence that this is a step in the right direction.  The government’s proposal contained within the green paper and followed through into this bill all appear to be sensible.  An example of this is Moving the jurisdiction to deal with issues relating to housing conditions from the county court to a tribunal is, in the writer's view, sensible and proportionate. It will be possible for the RPT to adopt a more inquisitorial role than is available to the court. It will also be possible to apply an element of specialism and expertise to a confined area of law and practice that will enhance decision-making and speed up the process.  Theses and other provisions should at the very list ensure that the housing in the UK is moving in the right direction and should ensure better housing for everyone.  It remains to see how this will be implemented and whether or not the practical outcome of this legislation is not as same as the theory.  It does a greater amount of administration, but hopefully at the benefit for the public at large, providing good quality residential housing for all.



Housing Act 1985
Housing Act 2004


  • Connors v UK App No 66746/01 27 May 2004

Books and Journal Articles

  • An Economic Model of the Demand and Need for Social Housing, DETR (1997)
  • Bate, R (1999) A Guide to Land Use and Housing.  JRF, York
  • CML/CIH (2000)  Understanding Local Housing Markets
  • DETR (1999) National Strategy for Neighbourhood Renewal: Report of Policy Action Team 7: Unpopular Housing
  • HACAS Consulting (2000) Winning Structures - Registered Social Landlords in a Changing World.  CIH, Coventry.
  • IPPR (2000) Housing United, chapter 4.
  • Maclennan et al (1998) Local Housing System Analysis - Best Practice Guide. Scottish Homes, Edinburgh.
  • McGrath S, (2005) “Adjudication Under the Housing Act 2004 - Residential Property Tribunals” Landlord and Tenant Review 9 (2) 35-37
  • Shelter (2000) Building for the Future
  • Symons K, (2005) “House in Multiple Occupation: Licensing of the Private Landlords”, Landlord and Tenant Review  9(2) 46-48
  • Tenth Report of the Environment, Transport and Regional Affairs Committee on
     Housing (2000)
  • Waritay S & Cafferkey A, (2005) “Housing Act 2004- Part 1”, New Law Journal 155.7159 (6
  • Wilcox, S (2000) Housing Finance Review 2000-01.CIH/CML for JRF, Coventry

Websites Accessed

  • http://www.cih.org/policy/papers10.htm
  • http://www.legislation.hmso.gov.uk
  • http://www.odpm.gov.uk/index.asp?id=1150530

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