Landlords profits from unsafe housing in the ‘billions’

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Landlords are making ‘billions of pounds’ from private sector tenants living in homes that fail to meet basic legal housing standards, according to a new report by Citizens Advice and the New Policy Institute (NPI).

Damp and mould, excess cold, rat infestations and pollutants such as Asbestos – the most dangerous ‘category 1 hazards’ – were found in as many as 700,000 privately rented homes in England.

It’s not just low income households vulnerable to renting unsafe housing. 30% of households surveyed reported an annual income of £30,000 and 18% more than £40,000, according to the ‘Paying a high price for a faulty product’ report.

Private renters on the rise

The number of those renting privately is set to increase. Figures by the National Office of Statistics show households in the private sector have risen by 12% in the last decade. Price Waterhouse Cooper (PwC) reports that private rented households will rise to a quarter by 2025 as more people are priced out of home ownership by rising house prices of 5% a year.

Renting in the private sector is the most expensive form of housing yet the poorest in quality. Despite paying significantly more in monthly payments than social housing tenants and home owners, private tenants live in households with a larger number of category 1 hazards. Private rented homes have 5% more category 1 hazards than owner-occupied homes, and three times the number than social rented homes. Average monthly costs for private renters is £765 compared to just £409 for social renters and £664 for home owners paying a mortgage.

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Call for rent ‘refunds’

Campaigners are calling for the Government to provide tenants with the same level of protection seen in consumer law. The recently updated Consumer Rights Act (2015) replaces the Sales of Good Act (1979) and aims to make buying and selling – and redressing complaints – easier. The laws that protect consumers do not translate in housing law, and campaigners want to see this changed.

Citizens Advice is asking for a new housing bill that gives rights such as the ‘right to refund’ in rent when housing problems are ignored. Despite the right to refund proposal being accepted by the government in the current Housing and Planning Bill, rent refunds currently require pursuing through the courts – with tenants footing the bill.

Campaigners say more needs to be done to make rent refunds easier, especially for those not in receipt of housing benefit. Private tenants also need greater protection from ‘retaliation eviction’

License landlords and ‘rogue’ database

Local landlord licenses and a database of ‘worst offenders’ is being considered, alongside the right to refund in the current Housing and Planning Bill. There will be tougher rules to protect tenants from rogue landlords who fail to maintain safe households and new legislation to prevent letting agents from charging extortionate and unnecessary fees in England.

However, there is fear that landlords will respond to increased legislation by selling housing stock and further exasperating the demand for housing in the private housing.

Notes
Citizen Advice Press Release
Citizens Advice Report: Paying a high price for a faulty product 
Link to Housing bill 
Link to Price Waterhouse Cooper report summary

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Poverty of Mind: the Cognitive Debt of the Poor

A study by UK Warwick University has proved that poverty has a negative causal effect on cognitive ability. The effect is significant — equal to losing a full night’s sleep or comparable to the reduction of cognitive performance in alcoholic adults compared to non-alcoholic adults.

The pressures of poverty exhaust cognitive resources, hinder the ability to make positive life choices and shackle the poor to life-long poverty.

The study, “Poverty Impedes Cognition” led by Dr Anandi Mani, Economics Professor at Warwick University, sheds new light on the cycle of poverty and shows for the first time that it is the flaw of poverty, not the poor, that maintains the poverty trap.

The poor, in this view, are less capable not because of inherent traits, but because the very context of poverty imposes load and impedes cognitive capacity. The findings, in otherwords, are not about poor people, but about any people who find themselves poor.”

Research techniques

Poverty,  defined  broadly as ” the gap between one’s needs and the resources available to fulfill them,” enabled the study to be opened up in both developed and developing countries.

To prove the hypothesis that monetary concerns tax the cognitive system, cognitive exercises were conducted on participants recruited from a New Jersey Shopping Mall consisting of a “poor” group with an average household income of $20,000 and a “well-off” group with an average income of $70,000.

The findings of the laboratory tests were backed up with field tests on farmers; ideal candidates for study due to the cyclic experience of poverty and wealth during the planting cycle.

Test 1 – poor v rich group

The two groups were given identical reasoning tests designed to induce thoughts about finance, specifically their own. Participants were asked to problem solve to find the best method of repair for a car. One solution involved a minimal cost of $150, the other $1,500. The solution involving $1,500 reduced cognitive performance among the poor but not in the well-off group. Dr Mani comments on the significance –

Just as an air traffic controller focusing on a potential collision course is prone to neglect other planes in the air, the poor, when attending to monetary concerns, lose their capacity to give other problems their full consideration.”

The hypothesis of the cognitive testing was thus proved. Financial problems were not seen to cause concern in those with sufficient resources.

For those without adequate funds the “load” of a financial problem was shown to overwhelm the cognitive system –

We hypothesized that for the rich, these run-of-the-mill financial snags are of little con- sequence. For the poor, however, these demands can trigger persistent and distracting concerns.” Dr Anandi Mani.

Test 2 – Harvesting cognition

Farmers were tested for their cognitive ability during the planting cycle. Before harvest when “poor,” farmers were less likely to perform well in cognitive tests. After harvest when “rich,” the cognitive performance of farmers significantly improved. This proved the cognitive depletion in the same group of people who experience cycles of wealth. According to researchers, the findings could not be explained by nutrition, time available, stress or work effort alone.

The human cognitive system has limited capacity Preoccupations with press- ing budgetary concerns leave fewer cognitive resources available to guide choice and action.”

A New Insight into Poverty

Research into poverty has focused mainly on the behaviors of the poor; low attainment in education, struggling to keep appointments, poor budgeting in personal finance, low engagement with services. This study is the first to look into how the behaviors that exasperate poverty first come about.

Researchers hope that the findings inform policy makers to make education, training, health and funding straight forward and easy to access. Policy makers should avoid all complexity or a “cognitive tax” on the poor –

First, policy-makers should beware of imposing cognitive taxes on the poor just as they avoid monetary taxes on the poor. The data reported here suggest a different perspective on poverty: Being poor means coping not just with a shortfall of money, but also with a concurrent shortfall of cognitive resources.”

Researcher suggest simple and no cost interventions could help people, such as –

  • smart defaults (selections put in place that serve most people)
  • help to fill out application forms
  • planning prompts
  • reminders for appointments

Policy and Poverty

Filling out long forms, preparing for a lengthy interview, deciphering new rules, corresponding to complex incentives,all consume cognitive resources. Policy-makers rarely recognize these cognitive taxes; yet, our results suggest that they should focus on reducing them” (report excerpt)

The benefit system can be labyrinthine. Historical decisions by government can mean that puzzling systems are in place to serve the most vulnerable.

In a deprived UK coastal town, a community centre for section 4 failed asylum seekers supported by the UK Border Agency UKBA are given food vouchers — their only means of support.

A food voucher is issued but with no means to buy a bus ticket to reach the out of town supermarket for which they are eligible– a large superstore on the furthest outskirts of town. It’s a 2 mile walk of 45 minutes for those who know the best route.

This town is a dispersion centre for newly failed asylum seekers, many have just arrived from other parts of the UK to eek out a non-life where everything is a no-no. No right to work, no medical care, no attending free community training or volunteering even. The weekly voucher was their lot.

This was the case in 2010. Shortly after an “Azure” card replaced the one-store only vouchers to enable fairer shopping.  According to The Guardian, the card rarely worked at point of sale. Navigating hurdles — as impossible as they are daily, leaves little in terms of the cognitive resources, or hope, necessary to create a better life.

Notes:

Science Magazine: Poverty Impedes Cognitive Function
http://www.sciencemag.org/content/341/6149/976

Medical News Today article
http://www.medicalnewstoday.com/articles/265501.php

Rules for Asylum Seekers Section 4
http://www.ukba.homeoffice.gov.uk/asylum/support/apply/section4/

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