Compulsory Sale of High Value Council Housing: ARCH Member Survey 28/05/2015 Labelled as Consultation

19/2015

The Government's legislative programme announced in the Queen's Speech includes proposals to require stock retained councils to sell off higher value council housing as it becomes vacant in order to fund the extension of the Right to Buy to housing association tenants.

The caps over and above which councils will be required to sell "high value" housing are yet to be defined but the figures set out by the Conservative Party when they launched their manifesto suggest that it could be as low as £80,000 in some areas and it is likely to disproportionately affect some councils more than others. 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. In the meantime council and housing association 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 at much higher rents. 

There are considerable uncertainties as to whether the compulsory sale of higher value council housing as it becomes vacant would raise sufficient monies to fund the cost of Right to Buy 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. 

The details of this policy are yet to be defined and whether we agree or disagree with the extension of the Right to Buy to housing association tenants the costs over the life of this parliament will run into £billions and is predicated on selling revenue earning public assets (higher value council housing) which will jeopardise the housing business plans of stock retained councils.

ARCH will be responding to these proposals as they emerge and it is essential that in doing so we represent the views of ARCH member councils and provide an evidence based response to the proposals, ensuring that the Government are fully aware of the consequences of these proposals on the stock retained sector. We are therefore asking all ARCH members to complete a short survey to begin to assess the impact and implications of the Government's proposal to extend the Right to Buy to housing association tenants and to fund the cost of RTB discounts by requiring councils to sell off high value council housing as it becomes vacant. 

ARCH members are asked to complete the questionnaire and return it no later than close of day on Monday 15 June 2015 to john.bibby@arch-housing.org.uk.  Your responses will be kept confidential and no authority will be quoted individual by name.  

The extension of the RTB to housing associations will be funded by requiring councils to sell off "high value stock" and the Government will pool the receipts and use them to fund the RTB discounts to housing associations, provide 1-for 1 replacements and set up a brownfield regeneration fund.

Under the proposal the Government will legislate to require local authorities to"manage their housing assets more efficiently", by requiring them to sell off their more "high value" properties - only when they become vacant - which can then be replaced with "normal affordable housing". Local authority properties that rank among the most expensive 1/3 of all properties of that type (by bedroom size we think) in their area - including private housing - will be sold off and replaced with new affordable housing on a one for one basis. But this will only happen as they fall vacant.  Nobody will be forced to move.

"High value" council properties to be sold off will be defined by reference to regional or area valuation caps set by government according to size of property (no of bedrooms) ranging from £80,000 for a 1 bedroom property in the North East to £1,205,000 for a 5 bedroom property in London. Properties worth more than the following caps would be required to be sold as the properties become vacant, although the Government would consult on what these caps might be and whether they should be set regionally or more locally by housing market area or local authority area:

In completing the questionnaire you may not have exact up to date valuations for voids that occurred in your authority in 2014/15. If you don't we hope you can provide reasonable estimates perhaps by reference to any recent RTB valuations of those property types in those areas.

We hope all ARCH authorities will complete this questionnaire. If we are to represent the interests of stock retained councils in discussions with the Government and DCLG officials it is vital we understand the impact of these proposals on stock retained councils Thanks you in anticipation of your help.