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DCLG issue Impact Assessment on Housing and Planning Bill 30/10/2015

The DCLG has issued their assessment of the impact of policies and proposals set out in the Housing and Planning Bill 2015.

 

Stock retained councils will be particularly interested in the government's assessment of the impact of the proposals in the Bill to force the sale of high value council housing and introduce a mandatory 'pay to stay' scheme for higher earning tenants.

 

The impact assessment of clauses 74-83 of the Bill (the introduction of the mandatory 'pay to stay' scheme and mandatory rents for higher income social housing tenants estimates that:

 

  • There are currently 350,000 council and housing association tenants with household earnings above £30,000 who would be required to pay a market or near market rent
  • The number of tenants affected is expected to rise further by April 2017 (the date of the planned introduction) because of rises in the National Minimum Wage/National Living Wage and wage rises generally. The caseload (number of tenants affected) by 2017/18 is estimated to be:
    • 200,000 council tenants; and
    • 240,000 housing association tenants 
  • The government estimate that by 2020/21 the cost of administering a mandatory 'pay to stay' scheme will be around £28million per year with a further £45million in transitional costs; and
  • Council and housing association tenants affected will be paying an additional £1.05billion per year in rent:
    • Council tenants will be paying an extra £510million in rent which will be paid over to central government
    • Housing association tenants will be paying an extra £540million to their landlord which associations will be able to keep to reinvest in new housing.

 

The Impact Assessment of clauses 62-72 of the Bill (sale of vacant high value council housing and payments to Secretary of State) is fairly scant:

 

  • Claiming that as the policy relates to sale of high value housing "it does not impact on existing tenants" although it does recognise there "will be an impact on the total stock available while more housing is delivered" (without specifically mentioning one for one replacement of any stock sold) but fails to quantify this impact
  • The Impact Assessment recognises that the policy "could impact on prospective new council tenants or tenants wishing to transfer to a new council home" but makes no attempt to quantify the impact and reduction in local authority lettings available over the 2/3 year period it is likely to take "to build more homes which reflect housing need" to replace the homes sold or the potential increase in council housing waiting lists and use and length of stay in temporary accommodation for homeless households as a result of the reduction in local authority lettings as vacant property is sold
  • There is no assessment of the impact of lost rental income that will be incurred as a result of the forced sale of high value council housing
  • The Impact Assessment claims stock retained councils "are not benefitting from their high value vacant assets as money is tied up in existing housing" and that the policy "will release the value of such assets to use in providing more housing" but the Impact Assessment makes no attempt to quantify the cost of one for one replacement, relative to the net capital receipt likely to be achieved after costs of sale, repayment of outstanding debt and lost rental income (pending completion of the promised one for one replacement) have been factored in.

 

The Impact Assessment also addresses the other significant proposals in the Housing and Planning Bill including the government's proposals for starter homes, reform of planning in England as well as the implementation of Right to Buy on a voluntary basis and proposals to reduce regulation on housing associations although it says very little in respect of the latter.

 

Click here for a copy of the Housing and Planning Bill and the full DCLG Impact Assessment.

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