Latest discussions with DCLG officials indicate that the
government is intent on pursuing the option of providing fixed-term
council housing as outlined in the Conservative Party Election
The Conservative Party Manifesto pledged to "build new
fixed-term social houses, which will be sold privately after ten to
fifteen years with an automatic Right to Buy for tenants, the
proceeds of which will be recycled into further
It appears, that following the General Election, the new
Conservative Government is keen to pursue this manifesto pledge and
that the provision of fixed-term council housing may feature as an
element of any future funding arrangements to support councils to
build and/or any Bespoke Housing Deals entered into by government
with councils seeking to build new social housing.
Details of the proposal and how it would work in practice are
currently sketchy. However, ARCH has put several first order
questions to DCLG officials including:
- Has the Conservative Party or Government produced any
assumptions and example costings of how such a model might be
expected to work so that the assumptions behind the policy can be
- What is the amount of the "significant low-cost capital
funding" available? Is this in the form of low interest loans? If
so what is the assumed interest rate? Alternatively, if this
funding is in the form of capital grant, what is the grant
- Is there an assumption that such funding will only be available
for 10-15 year fixed-term council housing or will it also be
available for what might be termed "traditional council
- What rent policy is to be applied to such 10-15 year fixed-term
council housing? Social/affordable rents or higher? Will such rents
be subject to CPI or CPI + 1% rent increases and will they be
exempt from the current rent reduction policies to 2020?
- Is the assumption that such fixed-term council housing should
be held in the HRA or in the General Fund?
- Are such properties to be subject to the existing statutory RTB
and RTB discounts in the initial 10-15 year period after
construction or will a RTB only arise at the end of the 10-15 year
"fixed-term" period when the house is valued and put on the
- If it is the latter, what are the proposed RTB discount rates
to be given to the sitting tenant at that point? Are they the same
as the existing RTB rate?
- In the modelling of this policy, what assumptions have been
made about house price inflation over the next 15 years?
- Is it proposed that the local authority will be able to retain
100% of the capital receipt to "be recycled into further homes"
when the property is sold privately after 10-15 years?
We look forward to further discussions with the
government on the answers to these questions and the details of
their proposals for fixed-term council housing as they