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ARCH Executive Board update 28/05/2015

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 their tenants.


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 practice" 


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 measures:


  • We will be consulting ARCH members to obtain their views on the proposals and assess the implications for stock retained councils.
  • 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 and tenants.  

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ARCH Member Comments 4 people like this

  • Jim Nicholl, Birmingham City Council - 28 May 2015

    Totally agree absolutely spot on. Could possibly be an item an important discussion item for ARCH TG?