Using the Social Security System to Deliver Housing Policy
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UNIVERSITY OF SOUTHAMPTON Faculty of Business, Law and Art Law Using the Social Security System to Deliver Housing Policy by Louise Gee Wing Cheung Thesis for the degree of Doctor of Philosophy September 2016 University of Southampton Research Repository Copyright © and Moral Rights for this thesis and, where applicable, any accompanying data are retained by the author and/or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This thesis and the accompanying data cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder/s. The content of the thesis and accompanying research data (where applicable) must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holder/s. When referring to this thesis and any accompanying data, full bibliographic details must be given, e.g. Thesis: Cheung, L (2016) "Using the Social Security System to Deliver Housing Policy", University of Southampton, Faculty of Business, Law and Art, PhD Thesis, pagination. UNIVERSITY OF SOUTHAMPTON ABSTRACT Faculty of Business, Law and Art Law Thesis for the degree of Doctor of Philosophy USING THE SOCIAL SECURITY SYSTEM TO DELIVER HOUSING POLICY By Louise Gee Wing Cheung This thesis examines the interaction between housing policy and the social security benefits that support housing costs. Analysis concerns the extent and type of State intervention in housing, thus explaining the dynamic between State and individual responsibility in housing policy. This thesis involves an exploration of the different treatment of the owner-occupied and the rented housing sectors, with reference to the social security benefits which fund ongoing housing costs. This thesis seeks to trace how the State financing of the home can be linked to the popularly researched notion of the ‘home’ in English housing law. The research questions whether the use of the home as an investment is an appropriate starting point for analysis, particularly when public funds are involved. Central to this thesis is the identification of the individualisation of responsibility of housing provision, primarily through the promotion of homeownership and the contraction of social housing. The development is seem as a consistent objective since at least the mid-20th Century through diminishing State expenditure to support ongoing housing costs in both tenures through social security payments, primarily in the form of Housing Benefit and Support for Mortgage Interest to support. The conclusion however questions the effectiveness of this strategy. It is argued in this thesis that there is a mismatch between the macro housing policy which encourages homeownership and the social security benefits that support ongoing housing costs. Table of Contents Table of Contents .......................................................................................................... i DECLARATION OF AUTHORSHIP ................................................................................... vii Acknowledgements ............................................................................... ix Definitions and Abbreviations ...................................................................................... xi Chapter 1 Introduction 1.1. Introduction ...........................................................................................................1 1.2. Thesis Question ……………………………………………………………….............……………………1 1.2. Motivation for this study and the original contribution of this thesis…………………2 1.3. Framework of Analysis ………………………………………………………………………………………4 Chapter 2 A legal State responsibility for social security and housing emanating from international human rights treaties 2.1. Aim ………………………………………………………….….………………………………….………………...9 2.1.1 Defining the Nature of Responsibility……………………………………………………………….9 2.2. Key Concepts........................................................................................................10 2.3. Recognition of welfare rights in international treaties: Is there a human right to social security?..………………………………………………………………………….………………10 2.3.1 The European Convention on Human Rights (ECHR)…………………………14 2.3.2 The EU Charter of Fundamental Rights…………………………………………….. 17 2.3.3. The Universal Declaration of Human Rights (UDHR)…………….……………18 2.3.4. The International Covenant on Economic, Social and Cultural Rights (ICESCR) ………………………………………………………………………………………………………20 2.4. Recognition of housing rights in international treaties……….…………………………...21 i 2.4.1. The European Convention on Human Rights (ECHR)..……………………… ..23 2.4.2 The Universal Declaration of Human Rights (UDHR)……………………………26 2.4.3 The International Covenant on Economic, Social and Cultural Rights (ICESCR) ………………………………………………………………………………………………………27 2.3.4. Enforcement mechanisms of International Human Rights Treaties…30 2.4.5. To what extent is there a right to be housed emanating from international human rights treaties?...............................................................35 2.5. Conclusion: The nature of the State responsibility for social security and housing through a human rights based framework……….……………………………………………………..41 Chapter 3 An assumed State responsibility for welfare and housing from political theory 3.1. Aim………………………………………………………………..…………………………………………………45 3.2 State responsibility for welfare……………………………….……………………………………..…45 3.2.1 Models of welfare………………………………………..………………………………….…45 3.2.2 Why does the State have responsibility for welfare?.............................48 3.3. Conclusion: An assumed State responsibility – how does this affect the future Welfare State…………………………………………………………………………………..……………………..65 Chapter 4 Historical context of Housing Policy 4.1 Aim...……………………………………………………………………………………….……………………….69 4.2 Pre-20th Century ……………………………………………………………………..………………………..69 4.3 Early 20th Century ………………………………………………………………….…………………………77 4.4 Post WWII …………………………………………………………………………………………….………….84 4.4.1 Homeownership promotion………………………………………………………………94 4.5 1980s onwards………………………………………………………….……………………………….……..95 ii 4.5.1. Large Scale Voluntary Transfer (LSVT)…………………………………………………………101 4.6 Conclusion: the current position as a legacy of the historical context of housing policy………………………………………………………………………………………………………………….…110 Chapter 5 The Current State of Housing Policy 5.1 Aim…………………………………………………………………………………………………………………113 5.2 Current State assistance for acquisition costs …………………………………………………115 5.2.1. Help to Buy …………………………………………………………………………………..…119 5.2.2. Shared Ownership ………………………………………………………………………………………123 5.3. Mixed Economy of Welfare including asset based welfare……………………………..133 5.4 Conclusion: State intervention into current housing policy……………………………..137 Chapter 6 How the ideology of homeownership manifests through housing law and policy? 6.1. Aim……………………………..……………………………..……………………………..………………….141 6.2. X-Factor Home Values……………………………..……………………………..…………………….141 6.3. Contextual and Theoretical Discourse about the legal distinction between ‘owners’ and ‘renters’………………………………………………………………………………….……….143 6.4. The Demise of the Private Rented Sector ……………………………..…….………………..145 6.5. The Property Owning Democracy ……………………………..………………………………….148 6.6 Tenure and Home Values………………………………………………………………………………..150 6.7. The association of home values with home ownership………………………………….153 6.8. Conclusion: The State’s encouragement of homeownership as the ultimate individualisation of Responsibility ……………………………………………………………………….160 iii Chapter 7 Evaluation of HB and SMI through the lens of State versus Individual responsibility 7.1 Aim……………………………..……………………………..……………………………..……………………163 7.2. What are HB and SMI? ……………………………………………………………………….………….166 7.3. HB: State versus Individual Responsibility……….…………..…………………….…………..169 7.3.1 Key eligibility criteria, the development of HB and the resultant expression of State responsibility……………………………..……….………………………170 7.3.2 Entitlement reforms cutting HB expenditure ………………………………….173 7.3.3 Shared Accommodation Rate (SAR) in the PRS…..…………………………….174 7.3.4 Local Housing Allowance (LHA) in the PRS……………..…………………………177 7.3.5 Housing Benefit in the Social Sector & Social Sector under-occupancy penalty …………………………………………………………………………………….……………….185 7.3.6 The role of Discretionary Housing Payments (DHP)…………………………..188 7.4. SMI: State versus Individual Responsibility …….………………………………………….….193 7.4.1 The significance of SMI……………………………..………………………………………193 7.4.2 Key eligibility criteria the development of SMI and its expression of State responsibility …………………………………………………………………………………..195 7.5 The use of legislative and soft law mechanisms to assist homeowners in arrears………………………………………………………………………………….…………….……………..…204 7.5.1. Mortgage Market Review (MMR) and Mortgage Conduct of Business rules (MCOB 13)…………………………………………………..……………………………………208 7.5.2. Pre-action Protocol ……………………………..………………………………………….214 7.5.3. Section 36, Administration of Justice Act 1970……………………………….217 7.5.4 Mortgage Payment Protection Insurance (MPPI) ……………………………..218 iv 7.6 Conclusion: The extent of State Responsibility in the Social Security System for renters and owner-occupiers: HB versus SMI……………………………..…………………………………….…………222 Chapter 8 Evaluation of HB and SMI and their recognition of home values 8.1 Aim…………………………………………………………………………………………………………………227 8.2 HB and Home Values……………..……………………………..……………………………..…………228 8.2.1 HB in the PRS……………………………..…………………………………………………….228