Bill tracker
The government's legislative programme for the current parliamentary session was announced in the Queen's speech on 25 May 2010.
We are tracking and lobbying where necessary on the following bills:
Energy Bill (recieved royal assent)
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The Bill aims to tackle barriers to investment in energy efficiency; enhance energy security; and enable investment in low carbon energy supplies.
Part 1 of the Bill outlines the Green Deal. This creates a requirement on the household energy bill to pay back investment in energy efficiency. This applies to the bill payer irrespective of whether they originally entered into the green deal plan, and so effectively attaches the charge to the property.
We supported measures that encourage energy efficiency in residential properties. However, the Bill does raise some areas of uncertainty for lenders. Our main concern was the impact of the green deal provisions on the mortgageability and value of a property, and the implications for lenders' repossessing a property subject to a green deal charge.
Our briefing paper on the Bill can be found here. More information can also be found on our policy page relating to energy efficiency initiatives.
Financial Services Bill
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The Financial Services Bill fundamentally reforms the current regulatory system.
The new system will give the Bank of England macro-prudential responsibility for oversight of the financial system and, through a new, operationally independent subsidiary, for day-to-day prudential supervision of financial services firms managing significant balance-sheet risk. The FSA will cease to exist in its current form. A new conduct of business regulator will also be created to protect consumers, promote competition and ensure integrity in markets.
The legislation implements these reforms by:
- establishing a macro-prudential authority, the Financial Policy Committee (FPC) within the Bank of England, to monitor and respond to systemic risks;
- clarifying responsibilities between the Treasury and the Bank of England in the event of a financial crisis by giving the Chancellor of the Exchequer powers to direct the Bank of England where public funds are at risk and there is a serious threat to financial stability;
- transferring responsibility for significant prudential regulation to a focused new regulator, the Prudential Regulation Authority (PRA) established as a subsidiary of the Bank of England; and
- creating a focused new conduct of business regulator – the Financial Conduct Authority (FCA) – which will supervise all firms to ensure that business across financial services and markets is conducted in a way that advances the interests of all users and participants.
More information on financial services regulation can be found on our policy pages.
Local Government Finance Bill
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The Local Government Finance Bill makes provisions about non-domestic rating; grants to local authorities; and council tax.
Within the clauses dealing with council tax, there is a provision for lenders in possession to be liable for this tax. Our briefing paper for MPs on this issue can be found here.
Localism Bill (received royal assent)
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The Localism Bill covers a broad range of issues in relation to housing and planning. It seeks to implement a number of measures as part of the move to localism and decentralisation of power over housing and planning decisions.
Changes to the planning system are set out in Part 5 and include a move to neighbourhood planning and new powers for communities including holding referendums; veto council tax rises; and putting forward their own development.
Part 6 implements many of the government's housing reform policies:
- allocation of housing accommodation;
- duties to homeless people including discharging these through the private rented sector;
- tenure reform and the most to flexible tenancies;
- introducing self financing and an end to the current housing revenue account system;
- the abolition of the Tenant Services Authority and transfer of social housing regulation to the Homes and Communities Agency;
- changes to the Housing Ombudsman service and treatment of tenants complaints; and
- the abolition of home information packs.
Chapter 5 of Part 6 is of particular interest as it sets out the changes to regulation of the social housing sector including the abolition of the Tenant Services Authority. Our main aim during lobbying on the Bill was to make sure that there is a robust, transparent and independent framework of economic regulation for social housing as well as a regulatory environment that ensures housing associations continue to command the confidence of lenders and can continue to attract investment at competitive rates.
A brief summary of the Bill and key points of interest for members can be found here, and we also produced a briefing paper which has been used to lobby Parliament.
More information on social housing and funding in England can be found on our policy pages.
Secured Lending Reform Bill
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The Secured Lending Reform Bill is a private members' bill (ballot bill No 20) introduced by George Eustice MP.
The Bill will mainly apply to buy-to-let property, its aim being to attempt to give borrowers additional protection against possession as the economy emerges from recession. This briefing note gives more information on the rationale for the Bill.
The Bill proposes removing a receiver’s power of sale and a lender’s ability to enforce its own power of sale until either they have agreement of the borrower, or the lender has an order for possession from the court and it has been enforced. We believe that the extra layers of litigation this could add to the process is likely to delay possession taking place and may result in disadvantaging the borrower by increasing the outstanding mortgage debt and potentially leaving less money available for the borrower following a sale or increasing the shortfall debt.
The Bill also proposes that the lender is denied an order for possession until a court has determined any claims by a borrower by way of a set-off or counterclaim. There is a danger here that this could lead to borrowers employing all manner of delaying tactics and frivolous claims to prevent possession.
More generally any attempts to undermine a lender’s security in respect of buy-to-let lending will have a knock-on effect on the sector as a whole by potentially increasing the costs to borrowers as a result of the increased risk to lenders operating within this market.
We do not therefore support this Bill and our views have been highlighted to Mr Eustice. However, it is highly unlikely that the Bill will reach the statute book given the limited time set aside for private members bills, and the fact that it is in last position in terms of priority of these bills.
We have published guidance for lenders on the role of Law of Property Act (LPA) receivers.
Welfare Reform Bill
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The Welfare Reform Bill will create a single Universal Credit which will come into force from 2013 but with transitional arrangements.
We support the principles of welfare reform and the simplification of the welfare benefit system. However, we believe that changes to the existing arrangements for the calculation and potential payment of housing benefit direct to tenants will have a dramatically damaging effect on current and future investment in affordable housing.
We also strongly believe that direct payments should remain an option for any tenant who wants to continue with this arrangement. Maintaining consumer choice is even more important given that affordable rents will be higher, increasing the likelihood of arrears for those households unable to manage their finances effectively.
We have been lobbying for the direct payment of the housing element of the new Universal Credit to be paid direct to landlords. During Commons scrutiny of the Bill a few MPs raised concerns and attempted to get reassurances from the government on this issue. A DWP minister is on record as saying "we recognise that in some circumstances direct payments to landlords may be necessary, and the Bill makes provision for that". However, we do not feel this goes far enough.
During a briefing with Lord Freud in July, he confirmed that direct payment would continue for the elderly and other vulnerable groups (definition to be agreed). He also set out his thoughts on some alternative payment options that could protect income streams and stated his commitment to work with us to find solutions which would give lenders comfort. We concluded that assurances as to how income streams would be protected was needed as soon as possible.
However, speaking at the National Housing Federation’s annual conference in September Lord Freud left the audience in no doubt that “from October 2013, in line with the introduction of Universal Credit, direct payments to tenants will be the default position”. While the minister announced the running of pilot schemes, he stressed that these would be operated to test how direct payments to tenants will work, rather than whether direct payments should be introduced. He concluded by saying, “direct payments to tenants is on its way. However, how we get there, the route we take, is something we can discuss.”
Our latest parliamentary briefing note was sent to peers in advance of the bill's committee stage in the Lords. Lord Best moved an amendment to allow tenants to choose how their rent is paid both at committee and report stages. This amendment has the support of 18 organisations from across the social and private rented sector, housing, consumer and tenant organisations and the funding sector. However, the amend was withdrawn on both ocassions.
More information on housing benefit reform can be found on our policy pages.
