The ARCH Executive Board met on Monday 18 May. The principle
item on the agenda was the Government's plans to force councils to
sell high value council housing to subsidise the extension of Right
to Buy (RTB) to housing association tenants and the implications
for councils, the viability of their housing business plans and
While the ARCH Board recognises and applauds the desire to help
first time buyers onto the housing ladder, it considers the policy
of extending the RTB to housing associations to be a very high cost
policy which will benefit only a relatively small number of better
off housing association tenants who can afford the RTB.
Council landlords have lived with the realities of the RTB for
the last 35 years but the requirement to compel councils to sell
high value council housing to compensate housing associations for
having to sell their assets below market value brings into sharp
focus the true costs of funding RTB discounts.
The ARCH Board believes there are serious questions about
whether this policy represents value for money at a time of
austerity and there are considerable uncertainties surrounding the
revenues that can be raised through the compulsory sale of higher
value council housing as it becomes vacant.
The number of housing association tenants who can afford and
want to exercise the RTB over the life of this parliament is
uncertain, as is the number of high value council homes that might
become vacant in that period and the value they will achieve on the
market. It remains to be seen whether the compulsory sale of higher
value council housing as it becomes vacant will raise sufficient
monies to fund the cost of RTB discounts for housing association
tenants and compensate housing associations for the loss of their
assets, let alone fund the replacement of sold properties on a one
for one basis as well as providing a new Brownfield Regeneration
Fund for house builders.
Councils will be very concerned about the potential loss of high
value stock and the impact will vary across the country with some
councils affected to a far greater extent than others. It seems
somewhat unfair that councils are being required to sell off their
higher value stock in the name of "managing their housing assets
more efficiently" to fund RTB discounts and one for one
replacements at lower value but housing associations (whose housing
stock will also contain higher value housing) are not.
Furthermore, even if the promised one for one replacement homes
can be provided in the areas where housing association and council
housing is sold, these new homes will take 2/3 years to plan and
build - even if land in the area is readily available and
affordable. In the meantime council waiting lists will get longer
and homelessness is likely to increase, leading to additional costs
to councils and council taxpayers in securing temporary
accommodation through the private rented sector.
We await to see the full financial implications of this policy,
however the ARCH Board believes this policy will cost billions of
pounds over the life of this parliament and is predicated on
selling revenue earning public assets which, at a time of continued
austerity, will jeopardise the housing business plans of local
authorities and housing associations and may well discourage their
new build programmes.
Notwithstanding the promise of one for one replacement of rented
accommodation sold, there is a real risk that this policy will
inevitably lead to a depletion of affordable rented accommodation,
at least in the short term, and ARCH looks forward to receiving
further details of how this proposal will work in
In advance of the publication of these proposal to compel
councils to sell off high value council housing as it becomes
vacant, the details of which are expected to be announced in a new
Housing Bill the ARCH Executive Board agreed a series of
- We will be consulting ARCH members to obtain their views on the
proposals and assess the implications for stock retained
- We will be arranging a series of regional seminars for ARCH
members to focus on the detail of the plans to require councils to
sell their high value housing stock as they emerge and to inform an
ARCH response to these proposals.
- The Chair of the ARCH Executive Board, Cllr Paul Ellis, has
written to the Housing Minister to seek an early meeting and the
ARCH CEO has written to the DCLG officials to ensure that ARCH is
fully consulted on the details of these proposals.
- The ARCH Tenant Group will have opportunity to discuss these
proposals at their meeting on 22 June
- We will continue to work closely with the NFA to further the
policy objectives set out in the ARCH/NFA Manifesto.
We will look to build alliances with other relevant housing
organisations where this would further the ARCH/NFA Manifesto
objectives and serve the interests of ARCH and its member councils