The Social Housing Bill promised in the King’s Speech was introduced in the House of Lords on 14 May.  It passed its Second reading on 1 June and will be debated in Lords Committee on 15 and 17 June.  If passed by the House of Lords it will then be considered by the House of Commons.  If approved it is likely to become law before the end of this year.

The main provisions of the Bill are:

Right to Buy reforms

The Bill contains proposals to:

• Increase the minimum tenancy required to be eligible for the Right to Buy from 3 to 10 years. This will better ensure that it is tenants who have lived in, and paid rent on, their social homes for many years that are able to own their home through the scheme.
• Reform discounts so they start at 5% of the property value and go up to a maximum of 15% or the cash discount cap (whichever is lower). This will ensure that longstanding tenants benefit from a bigger discount.
• Exempt newly built social and affordable homes for 35 years. This will have no impact on existing tenants wanting to buy their current homes. The key benefit is that it will increase councils’ confidence to build.
• Exempt rural properties from the scheme, which will include homes in National Parks, Areas of Outstanding Natural Beauty and areas designated as rural, given that homes in these areas are particularly hard to replace due to land, planning and supply constraints.
• Exempt council homes for market rent from the Right to Buy, which will allow more cross-subsidy for the building of social and affordable housing.
• Prevent tenants who have previously benefitted from the scheme from exercising the Right to Buy. There will, however, be exceptions for victims of domestic abuse and in cases of irretrievable relationship breakdown.
• Increase the period of time for which the council has the right to ask for repayment of all or part of the discount on the sale of property from 5 years to 10 years. This is designed to encourage people buying under the scheme to retain the property and discourage profiteering.
• Extend the period in which a local authority has the right of first refusal when a property previously bought under the Right to Buy is sold so that it applies in perpetuity. This will give councils more opportunities to buy back homes previously sold under the scheme..
• Support councils with the administration of Right to Buy applications by:
  • increasing statutory timescales for issuing notices confirming the Right to Buy from 4 to 8 weeks (and from 8 to 12 weeks where the applicant has had a tenancy with another public sector landlord), and for notices which set out the landlord’s offer, increasing timescales from 8 to 12 weeks for houses and from 12 to 16 weeks for flats and leasehold houses
  • allowing for the suspension of standard timescales for up to 6 months to allow councils to investigate fraud.
• Allow the Secretary of State to determine the rules governing the spending of Right to Buy capital receipts through issuing a determination. This will result in administrative efficiencies for councils and central government, as it will no longer be necessary to issue a revised receipt retention agreement for all stock holding councils whenever the rules are changed.
• Align the Right to Acquire scheme with the reforms to Right to Buy. This will ensure broad consistency between the schemes. Discounts under the Right to Acquire will remain unchanged, with discounts for eligible tenants of £9,000 to £16,000 depending on the location.

These proposals reflect the outcome of consultation by MHCLG in 2024 and command broad support from housing sector organisations, including ARCH.  ARCH is considering whether to press for new-build homes to be exempted from sale in perpetuity, as are rural homes.

Requiring housing associations to notify local authorities when they propose to sell off homes

There is currently no statutory requirement for private registered providers of social housing to notify local authorities or other bodies in advance of selling a social home outside the social housing sector. Although in practice some providers already choose to engage with local authorities or other social landlords ahead of disposals as a matter of good practice, this approach is not applied consistently across the sector.

The bill will establish a requirement for private registered providers to notify the relevant local authority and other private providers in their area before the disposal takes place, thereby giving these organisations the opportunity to consider whether they have any interest in purchasing the property.

This proposal is welcome in principle, but as local authorities will only get 4 weeks notice of a proposed disposal, it is likely to be of limited practical use. be a 4-week period after the notification has taken place before the sale of a property can be completed. ARCH is considering whether to press for amendments to make this new requirement of more practical use.

Tenancy reform for domestic abuse victims

The Bill will strengthen landlords’ powers to take possession action against perpetrators of domestic abuse, making it easier for victims in social housing joint tenancies will be able to remain safely in their home where possible, with the perpetrator removed through the courts. Where it is not safe or appropriate to stay, courts can ensure victims are offered suitable alternative social housing where available, without loss of security.

Protections include:

• stronger powers for landlords to enable them to take possession of a property where domestic abuse has taken place without the requirement for the victim to leave
• a new mechanism to facilitate the transfer of the joint tenancy into the sole name of the victim, where a victim wants to remain in the home as a sole tenant
• powers to enable the courts to make an order to provide the victim with suitable alternative accommodation, where it is not appropriate for the victim to remain in a home and the landlord has this accommodation available
• a safeguard to ensure that perpetrators are unable to unilaterally end a joint tenancy in retaliation against possession action until proceedings have been concluded.

ARCH welcomes these proposals.

Repeal of unimplemented provisions from previous housing legislation

The Bill will repeal unimplemented provisions from the Housing and Planning Act 2016 reflecting policies introduced but later abandoned by previous Conservative governments.  There are 3 repeals:

1. provisions requiring sale of higher value homes: these would have required councils to sell their highest value homes as they became vacant, and return some of the funds to central government.
2. provisions requiring local authorities to grant fixed-term tenancies: councils will retain the discretion to offer fixed-term tenancies where appropriate, but the requirement to make most new tenancies fixed-term will be repealed.
3. mandatory pay to stay policies: the Bill will repeal mandatory ‘pay to stay’ rules, which if commenced would have required councils to charge higher rents to social tenants with higher incomes.

ARCH welcomes all three of these provisions, which we opposed at the time they were first brought into legislation.

MHCLG guidance on the Bill can be found here.  The progress of the Bill can be followed on the Parliamentary website here.