No preference is a reasonable preference - R (Mallon Montero) v London Borough of Lewisham

June 18, 2021

A High Court judge has upheld the disqualification of housing applicants owed the reasonable preference duty on the basis of lack of local residence. Matt Hutchings QC analyses the ruling.

Part 6, Housing Act 1996 entrusts the formulation of allocation policies for the fair distribution of scarce social housing to local housing authorities. The main legislative brake on local discretion (in England) is the duty to secure that reasonable preference is given to the classes of people specified in section 166A(3): people who are homeless, those owed one of the main housing duties, people occupying insanitary, overcrowded or otherwise unsatisfactory housing, and people with a welfare need to move to a particular locality.

The leading case on allocation policies is R(Ahmad) v Newham LBC. In that case, the House of Lords upheld Newham’s allocation scheme as lawful and reasonable. Its overall approach was to place all applicants within a statutory reasonable preference class into a low priority band with the deciding factor between them being waiting time. Para 46 of Lord Neuberger’s speech, warning of the undesirability of the courts’ getting involved in questions of priorities in housing allocation, probably wins the prize for the passage of any judgment most often quoted in grounds of resistance to housing allocation JRs.

A few years later, the Localism Act 2011 introduced a new power, in section 160ZA(7) of the Housing Act 1996, for local housing authorities to decide who is, and is not, qualified to apply for social housing in their area. Statutory guidance published the following year, Providing social housing for local people, strongly encouraged authorities to take advantage of their new powers to pursue local priorities, in particular by setting a local residence requirement for qualification for the housing register of at least two years.

Hammersmith & Fulham was the first authority to test the limits of the power to set qualification criteria. Its amended allocation scheme disqualified most applicants to whom the main housing duty had been accepted, (who were therefore within reasonable preference class (b),) provided that they were housed in suitable “long-term” temporary accommodation. The main issue in the case was whether the power to disqualify trumped the reasonable preference duty, or vice-versa. In R(Jakimviciute) v Hammersmith & Fulham LBC, the Court of Appeal held that the latter was the correct answer: the reasonable preference duty prevailed.

The Court of Appeal also decided that Hammersmith & Fulham’s scheme breached the reasonable preference duty. They held that the scheme sought to redefine the reasonable preference class and/or went too far by disqualifying a large proportion (on the evidence 87%) of applicants in reasonable preference class (b).

As the dust settled on that case, it would have been reasonable to reflect that a balance had been struck between local democracy and priorities on the one hand and the legislative steer in section 166A(3) on the other. Existing caselaw on the limits of the reasonable preference duty left considerable latitude to policy makers. It was established that whether or not reasonable preference was given to the specified class had to be judged by considering the effect of the scheme as a whole (see R(Lin) v Barnet LBC [2007] HLR 30) and that the duty meant giving a “reasonable head start” to individuals, which could be nullified by other relevant factors (see R v Wolverhampton MBC, ex p. Watters (1997) 29 HLR 93). Ahmad still held the field in terms of the undesirability of the courts micromanaging allocation priorities.

However, two cases decided by the Administrative Court within a few months of each other in 2015 took a different course. In R(Alemi) v Westminster CC, Westminster’s allocation scheme, which disqualified applicants owed the main housing duty for 12 months following acceptance of the duty, was struck down. It is not entirely clear whether this was on the basis that it “carves out a whole sub-group which is altogether excluded from the potential of being allocated social housing” or because “that sub-group is not defined by reference to differentiating features related to the allocation of housing” (para 32 of the judgment at [2015] PTSR 1339).

Alemi was quickly followed by R(HA) v Ealing LBC, in which a woman towards whom Ealing had accepted the main housing duty on the basis that she was fleeing domestic violence was disqualified from its housing register because she lacked five years’ residence in borough. The judicial review succeeded on the ground of unjustified indirect discrimination, but also on the ground that the reasonable preference duty was breached. Goss J stated that:

“Although a residency requirement is an entirely appropriate and encouraged provision in relation to admission onto a social housing list, it must not preclude the class of people who fulfil the reasonable preference criteria.” ([2016] PTSR 16 at para 23)

It would appear to follow from the above line of caselaw that it is unlawful for an allocation scheme to disqualify any individual falling within a reasonable preference class on the basis of lack of local residence. Thus, the Encyclopaedia of Housing Law and Practice states at 1-3561 that Alemi decided that it was unlawful to “create a group of persons [within a reasonable preference class] who had no preference at all”.

On 21 May 2021 Henshaw J handed down judgment in R(Mallon Montero) v Lewisham LBC [2021] EWHC 1359 (Admin). Lewisham’s allocation scheme disqualifies applicants who have not been resident in its area for at least 5 years, subject to a number of exceptions. Ms Mallon Montero occupied overcrowded accommodation but had not lived in Lewisham for 5 years: accordingly, she was disqualified from joining the housing register. The Judge held that this was lawful.

In summary, Henshaw J decided that:

“The legislation does not prohibit a disqualification criterion that affects some persons falling within a reasonable preference category, provided that viewed as a whole the scheme does give reasonable preference to that category of persons.” (para 5)

In reaching this conclusion, Henshaw J reasoned (at para 68) that:

The use of a qualifying criterion based on residence is not fundamentally at odds with the gist or purpose of section 166A(3);
The fact that (even on the claimant’s estimate) the residence rule excluded about one third of applicants was consistent with this view; and
If a residence requirement could not lawfully be applied in reasonable preference cases, there would be relatively little scope for the practical operation of such a requirement, a result which would be at odds with the 2013 statutory guidance.

The Judge rejected submissions by the claimant that:

A disqualification criterion of this kind can only be applied on a case-by-case basis (para 69); and
There is a fundamental distinction between nullifying reasonable preference on the basis of rent arrears and on the basis of local connection (para 70).

Henshaw J held that the decision of Goss J in R(HA) v Ealing LBC was not distinguishable, but was convinced that the conclusion reached in that case in relation to the reasonable preference duty was wrong (paras 72-73).

Further, potential wider issues as to the lawfulness of the residence requirement in Lewisham’s allocation scheme were not before the court (para 74).

The decision in Mallon Montero therefore restores the policy balance that was struck by the Court of Appeal in Jakimviciute between local democracy and priorities on the one hand and the legislative steer in section 166A(3) on the other, and provides clear judicial authority for the use of residence qualification criteria in housing allocation schemes.

Matt Hutchings QC is a barrister at Cornerstone Barristers. He represented the London Borough of Lewisham.