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Housing and Planning Bill receives Royal Assent 13/05/2016

The Housing and Planning Bill received Royal Assent on 12 May having spent several days in "Ping-Pong" between the House of Commons and the House of Lords.

 

The final sticking point on Part 4 of the Bill had been the Lords insistence, based on an amendment put forward by Lord Kerslake, that the Bill be altered to ensure that councils can retain sufficient funds from the sale of high-value council homes; and the RTB levy to guarantee replacement with social rented housing where the council considers this necessary. In explaining his proposed amendment to this affect in the House of Lords, Lord Kerslake said:

 

"First, it [his amendment] seeks to put it beyond doubt that sufficient funding will be available to local authorities to deliver at least one new affordable home for each higher-value property sold; in London this will be at least two for one. Secondly, it gives a local authority the opportunity, where it can demonstrate a need for social rented housing in its area, to make the case for the Secretary of State to consider".

 

However, in refusing to accept Lord Kerslake's amendment, citing financial privilege, the government made it clear that they wish to retain sufficient flexibility to enable them to do "bespoke deals" with councils on retention of elements of the RTB levy to deliver replacement of any higher value social rented housing with affordable housing of various types. In the final debate in the House of Lords, Parliamentary Under Secretary for Communities and Local Government, Baroness Williams of Trafford, said:

 

"I fully understand why the other place has rejected the amendment: it is because the arguments are so compelling. High-value vacant housing is a clear manifesto commitment. It will increase housing supply through the delivery of affordable homes and extend home ownership by funding the discounts for the ground-breaking voluntary right-to-buy agreements. I reiterate what I said yesterday: the manifesto clearly states that the homes sold will be replaced by new homes. It does not say that there will be like-for-like replacement because that is not always what communities need. We want to ensure that new homes serve the needs of communities. That is why we want to retain flexibility in the legislation so that the Government, working with local places, can facilitate the development of the type of homes that communities need today.

 

"From the outset, this Bill has enabled the Secretary of State to enter agreements with local authorities so that they can retain receipts from high-value asset sales to build new homes. Through the passage of the Bill, and with the immense scrutiny of your Lordships' House, we have made it clear that where agreements are made, they will deliver at least one new affordable home for each property that is expected to be sold, and in London at least two new affordable homes for each property expected to be sold.

 

As I confirmed yesterday, the term "affordable" includes a range of different types of housing, from new homes for sub-market rent to home ownership products such as shared ownership and starter homes. I also explained that we will compensate local authorities for transaction costs and the debt supported by the higher-value housing expected to be sold. After that, we have been clear that the receipts will be used to fund both right-to-buy discounts for housing association tenants and the delivery of new affordable housing. We are not intending to use them for any other purpose."

 

ARCH CEO, John Bibby, comments:

 

"It's clear from the government's response to Lord Kerslake's proposed amendment that any local authority seeking to retain elements of its Right to Buy levy will need to deliver value for money. It seems unlikely that the government will enter into such an agreement unless the local authority can demonstrate how they're achieving this; perhaps by putting in their own land or cross-subsidising the delivery of replacement social housing with starter homes or other home ownership products.  

 

"It remains disappointing that the Bill has been passed into legislation some 12 months after the policy of requiring councils to sell their high-value stock was first announced; and after months of debate in Parliament, without the government revealing the "higher-value" thresholds and formula for calculation of the RTB levy. Councils will now have to wait to see the detail in the associated Regulations before they will know how much they will have to pay over and how many council homes they will have to sell to meet this levy.

 

"The passage of the Bill has however resulted in a number of concessions on the original proposals for phasing out of lifetime tenancies and 'pay to stay'.

 

"On the phasing out of secure lifetime tenancies, although two to five year fixed-term tenancies will be the norm for all new lettings, in certain circumstances councils will have discretion to grant tenancies of up to ten years and longer tenancies may be offered to families with children (up to the age of 19) in education.

 

On 'pay to stay' the "higher earning threshold" for households outside London has been raised by £1,000 to £31,000pa and the additional rent charged will be limited to 15p for each £1, by which the household's income exceeds the threshold. This is still likely to mean that a dual earning household with earnings of £40,000pa outside London can expect to be asked to pay an extra £26 per week on their current rent which will come as a blow to hardworking families".

 

ARCH Policy Adviser, Matthew Warburton, has produced an ARCH briefing on the Act and the changes to the Bill as it has moved back and forth between the Lords and the Commons.    

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