Shapps latest knee-jerk wheeze – Plenty of freespace between Shapps ears!

Is there no depths to which Grant Shapps will stoop with his political bullshit?  Yes I know I should be more diplomatic and professional than that but sweet Jesus the man is a buffoon in dogmatic blinkers who wouldn’t win a debating contest with himself!

His latest nonsense is surprise, surprise, an article in the Telegraph today citing another knee-jerk superficial policy based on the “this-is-easy-to-sell-to-the-great-British-public-as-I-go-on-every-media-possible-and-tell-a-lie-often-enough-and-they-will-believe-it” strategy.  (Now you know why I used ‘bullshit!’)

The article begins “Grant Shapps, the housing minister, said councils should offer to help pensioners move to more suitable accommodation to create space for families.” Well who can argue with that?

Yet as we shall see this doesn’t stack up at all and proves yet again that Shapps myopic dogma over announcing knee-jerk policy to nice sound bites that work well in the media such as this.  Note well that it doesn’t stack up financially even when the older person leaves a 4/5 bedroom property in London, keeps the highly inflated rental income that London has by moving into a 1 bed sheltered unit out of London!! Yet of course that doesn’t stop Shapps from lauding this scheme!!!

The article presents an overview of the latest big idea –

“Local authorities would then take over responsibility for maintaining and renting the vacated properties at affordable rates, transferring any profit from the rental income back to the elderly person or their estate. The Government believes the proposal would provide support for the elderly to move without having to sell their homes at a time when there is a shortage of affordable housing for young families.”

Just sounds so plausible doesn’t it?  Well apart from the renting the property at affordable rates. This means Shapps misnamed affordable rent model, the model that charges rent at 80% of market rent in this case by a council at 90% higher rent level than the normal council rent!

Sorry I’m digressing the Telegraph article goes on:

Research released last year estimated that 25million bedrooms in England were empty, largely because elderly couples do not move out of family homes to smaller properties.  At the same time, young families are increasingly being squeezed into small homes and overcrowded flats as a result of the country’s high property prices

This is a report issued in November 2011; the significance of which I will return to later on, but for now Shapps is using this to justify this latest wheeze.

The Telegraph explains that this has the full backing of the DCLG – ““A government-backed pilot scheme run by Redbridge council, in east London, has won support from the Department for Communities and Local Government for helping elderly residents to downsize while retaining ownership of their homes” before Shapps goes on in full rhetorical bullshit flow from this point:

Mr Shapps told The Daily Telegraph that councils should look to replicate the Redbridge “FreeSpace” project. (Again I’ll return to this pilot project later but for now note Shapps has named the pilot project that has been ongoing for at least 12 months and well before the November 2011 research Shapps uses to justify this latest wheeze!!

Sorry, I digress again and deprive the reader of Shapps in full bullshit rhetorical flow –

For too long the housing needs of the elderly have been neglected,” he said.

Nice positioning there and it’s all about giving the elderly what they need.  That Mr Shapps is such a nice man isn’t he?

 “Older people who should be enjoying their homes have watched helplessly as their properties have become prisons, and many have been forced to sell their homes and move into residential care.”

So older people live in prisons now do they?  A tad of overselling there Grant!  Still where would we be without your hyperbole? This continues apace… “With nearly a fifth of our population expected to be over 65 by 2020, radical and urgent change is needed to ensure the nation’s housing needs are met.”

So what radical change is this? Oh yes the FreeSpace project which Shapps says “…shows what can be achieved” and illustrated that helping some older people move to more suitable accommodation can make a “life-changing difference”.  Wow that Mr Shapps really is a very nice young man isn’t he!

They can live independently for longer and enjoy more disposable income without selling their home, and other families can benefit from living in an affordable home,” he said. “Many homeowners with large properties and modest incomes are unable to downsize without selling their homes”.

What a nice man Grant Shapps is helping those poor asset rich homeowners with a government backed quasi-equity release scheme as he can’t get enough homes built. Sorry excuse my cynicism let’s move on to this fabulous FreeSpace scheme run by the London Borough of Redbridge.

The Telegraph is positively effusive about this latest wheeze and fully supportive of that nice young Mr Shapps.

The local authority foots the bill for moving costs, renovations and financial advice. In return, the council is able to rent the house to families in need and manage that tenancy directly. A four-bedroom house managed by the council would be rented at a typical rate of £1,300 per month, £300 less than the average market rate for a privately rented home.

Pensioners who take up the council’s offer use the rental income from their former home to pay for their new accommodation. Lower council tax, utility bills, and the income from their former home mean they can save more than £7,000 a year.”

The Telegraph even cites some independent (?) research evaluating this once in a lifetime offer “Analysis of the project, conducted by Cambridge University, said the Redbridge scheme was “financially astute”.  It goes on: – “There are clear financial gains for the owner-occupier and family from this arrangement,” the report said. “There is also scope for the council to charge a rate of interest on its investment as the margins would allow this

The Telegraph you may note fails to state what research this was or who at Cambridge University conducted it.  Am I picking at straws reader? Let’s have a look on their website to see how good this scheme is shall we?

The council website is very open and honest about this pilot… oh dear Mr Shapps won’t like that!

The pilot scheme is showing that ‘the devil is in the detail’ when it comes to implementing the scheme. Legalities around agreements and unusual financial situations, personal requirements of individuals and of course finding alternative accommodation for the owner all have to be addressed and are unique to each case.”

So it’s not a universal generic model that can be adapted and developed in any easy manner then.  It can be complex and is labour intensive as each case is different and will have numerous variables to consider. Hmm!

London Borough of Redbridge  webvsitecontinues: –

This scheme particularly suits the London Borough of Redbridge. As an outer London borough with the least social housing stock in London we need more private rented accommodation in order to take people out of temporary accommodation or overcrowding conditions. Redbridge is 90% private sector, mainly owner occupied and suburban in nature so the FreeSpace scheme, if it is viable, could prove to be very popular. We can manage private rented supply and rent levels to some extent through this scheme.”

Oh I see so it’s suited to the very peculiar circumstances that operate in LB Redbridge with its very high concentration of homeowners at 90% privately owned.  Hang on it must still work as it’s been evaluated by Cambridge University after all I hear you say.  Ah!

The LB Redbridge website reveals that “Cases in the pilot to date have been varied:”

It goes on:

1. A retired couple moved from LBR where their family live to a 3 bedroom bungalow in Basildon but unfortunately soon after the husband died. His wife is desperate to move back to Redbridge and the Council has agreed to offer her a 1 bedroom shelter flat in exchange for managing her property under the FreeSpace scheme. She is delighted. The issue raised here is that the property is not in the Borough. Properties in the Borough can be managed by an in-house team or our ALMO adding further economies of scale. However officers addressed the problem by negotiating management by a housing association operating in Basildon at a very reasonable cost. Redbridge Council will have no problem finding suitable Redbridge residents in need who will be happy to move to Basildon, which is less than 20 miles distance.

Hardly a ringing endorsement is it?  Still it fits in with the benefit diasporas from London that we all know will happen.  How forward thinking of LB Redbridge to use this pilot scheme as a trial run for moving many others in the near future!  Surely the second case study must be better!

2. One client has a 4-5 bedroom house and initially was interested in a high standard sheltered unit nearby. This seemed a straight forward case until the financial assessment showed there to be a loss of unusually high pension credit, which means the owner would be slightly worse off financially if she moved even after receiving the rent. However she is still happy to proceed because of the overall benefits of moving to a more suitable property, especially in terms of company and warmth.”

So moving from a 4-5 bedroom house into a sheltered unit makes the older person worse off financially!!!  Even after receiving the rent!!!  What was that you were saying Mr Shapps? Let me repeat it for you?

Pensioners who take up the council’s offer use the rental income from their former home to pay for their new accommodation. Lower council tax, utility bills, and the income from their former home mean they can save more than £7,000 a year”

So downsizing from a 4/5 bed house to renting a 1 bed sheltered unit raking in £1300 per month in rent on your property still doesn’t stack up financially!  And you are promoting this scheme as being suitable and efficient and as yet another inept housing solution?  What about the provinces that will see the rental income nearer £750 per calendar month, some £550pcm less than it is in LB Redbridge? 

What did you say about that again nice Mr Shapps?

They can live independently for longer and enjoy more disposable income without selling their home, and other families can benefit from living in an affordable home

More disposable income?  Oh dear!! A 4/5 bed home in London let at £1300 per month and still the model doesnt stack up!  An elderly person leaves a 4/5 bed family home to live in a 1 bed sheltered scheme and worse off financially!!


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