Ranking is Unnecessary as House of Lords rules on deciding between Applicants

Article

11 March, 2009

The allocation of social housing in the United Kingdom remains a controversial and sensitive topic, with the number of applicants far outweighing the properties available to meet this ever growing need.

While housing authorities have been granted reasonable levels of discretion in determining who to offer properties to, legislation has been implemented to ensure that this process is a fair and equitable one. The judgment of the House of Lords in R (on the application of Ahmed) v Newham London Borough Council [2009] UKHL 14 has provided some guidance to these difficult decisions.

The Facts

Newham London Borough Council brought an appeal against a Court of Appeal decision that its housing allocation scheme was unlawful. There were two different forms of offering properties used by the Council. These were the choice-based letting arrangement (CBL) and the direct offer arrangement. Individuals who were subject to the latter type were given priority over those on the former.

Persons who used the CBL were also divided into one of three categories. The first of these options were defined as "priority homeseekers", namely those households which contained at least one person who satisfied one or more of the 'reasonable preference' criteria in section 167 of the Housing Act 1996. Approximately 95 per cent of CBL properties were allocated to such persons. When bidding for properties, priority homeseekers were ranked by the date on which they were registered as such. The second category included tenants who were seeking a transfer from their current property. The CBL provided that no more than five per cent of lettings could be made to individuals in this category.

Under the direct offer arrangement, there were five different categories into which applicants could be placed. Of these, the first two, namely 'additional preference' and 'additional needs' were intended to include applicants who would be priority homeseekers under the CBL but who also had especially pressing needs for rehousing. The criteria for falling into these categories were particularly stringent.

The main issues for the House of Lords to address were:

  • whether the Court of Appeal had been correct to hold, in finding that Newham's scheme was unlawful, that section 167 required a local housing authority to accord priority as between 'reasonable preference' applicants by reference to the relative gravity of their needs, and
  • whether the scheme was unlawful because the CBL involved allocating a small yet significant proportion of housing stock to a class of applicants who did not satisfy any of the requirements of section 167(2) which covered tenants seeking a transfer.

The House of Lords' Decision

In allowing the appeal, the House of Lords firstly held that through an examination of section 167, there was no requirement for a housing authority to accord priority in such a manner between 'reasonable preference' applicants when the wording and context of the section indicated that there was no statutory obligation to rank all such applicants by the relative strength of each of their cases. They were also of the view that it was undesirable for the courts to become involved in questions of how priorities were created in an allocation policy.

The scheme implemented by Newham was said to satisfy all the express statutory requirements and indeed had many advantages over a more nuanced format in that it was clear, relatively easy to administer and highly transparent. Overall, there was nothing inherently absurd or arbitrary about prioritising those who satisfied section 167(2) by reference to time spent on the waiting list and nothing in the evidence supported a contrary conclusion. The Law Lords stressed that if a scheme complied with the requirements of section 167, the courts should be very slow to interfere with it on the ground of alleged irrationality.

Secondly, it had been argued that those groups included in section 167(2) had to be given reference in relation to every property let under the scheme. The Law Lords said that the section did not make it the case that they should be given absolute priority over everyone else. Still less did it require that an individual household in one of those groups should be given absolute priority over a household which wished to transfer.

Summary

This case has highlighted the fact that provided a landlord's housing allocation system is complaint with relevant legislation; the courts will take a laissez-faire approach to determining whether any decision reached is wrong or unreasonable. In addition to this, it was said that there is no obligation upon a landlord to rank, and therefore afford priority, to tenants or applicants by the relative strength of their situation.

Consequently, landlords have a relative freedom to structure their housing allocation procedures as they deem appropriate, provided that the previously stated statutory requirements are satisfied.

For more information and assistance on these issues, please contact the Housing Department at Forbes Solicitors on 01772 220200 or contact Stuart Penswick by email.

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