DCLG officials attended the last ARCH Board meeting earlier this
month and agreed to continue dialogue on the government's plans for
housing following the Housing White Paper.
Although officials were unable to provide any firm dates on the
government's timetable for further details on introduction of
fixed-term tenancies, the introduction of the higher value asset
(HVA) levy or announcements on rent policy post 2020, the ARCH
Board had a very positive discussion with officials and it was
agreed following the meeting that further discussions between the
ARCH Chief Executive and DCLG officials should continue, initially
on a monthly basis, and DCLG officials would attend future meetings
of the ARCH Board as appropriate.
Members of the Board were encouraged by the commitment in the
recent Housing White Paper to "back local authorities to build" and
acknowledged the progress made in separate discussions on "bespoke
The Board also pressed for early announcements on the HVA levy
and on future rent policy and urged further consultation and
discussions with the sector. While ARCH members would generally be
unhappy that the Housing Minister had announced the intention to
proceed with introduction of the HVA levy, the Board at least
welcomed comments made about the Minister's intention to "mitigate"
the impact of the levy.
The ARCH Board raised the issue about use of RTB receipts in the
context of whether there could be some flexibility in the "30%
rule" and a higher percentage applied by exception in use of
capital receipts as a contribution to supported housing schemes
which in the main are more costly than general needs housing
schemes but conversely contribute to mitigating costs elsewhere in
the public purse - particularly in social care and NHS
DCLG said they were keen to understand if more can be done to
encourage faster delivery of Right to Buy (RTB) replacements and
have been engaging with local authorities to get their views, which
will be fed into their assessment.
The Board also raised whether in the interim, until such time as
the higher value voids (HVV) and higher value asset levy
regulations and determinations are published, the Minister would
consider exempting any new-build property from inclusion in the
calculation of the HVA levy. The reason being that this would act
as a brake on new housing development in the HRA as councils are
wary that any new build properties may be taken into account in the
HVA levy and therefore have to be sold on the open market on the
first occasion they become void after first letting with the
proceeds paid over to the Exchequer.
Unlike housing associations, in committing any borrowing
headroom to new build, councils already must factor in to their
development costs that at some point during the 30 year HRA
Business Plan a proportion of any new build development will be
lost to the statutory RTB and the full asset value will not be
recovered and future rental income stream will be curtailed. The
added uncertainty of whether any new build property will at some
point exceed the yet unknown "higher value" threshold and be
included in the calculation of the annual HVA levy in future simply
adds another barrier to housebuilding in the HRA.
DCLG made it clear that the regulations can be used to exempt
certain types of housing, and the government has already committed
to do so for housing in National Parks. More details will be
provided on further exemptions in due course (if any are to be
made). ARCH will be writing to the Minister on these points.