LAMBETH COUNCIL LEADER’S WARNING OVER HOUSING ASSOCIATION TENANTS ‘RIGHT TO BUY’
“We are a very densely populated borough – we do not have huge tracts of land yet to be built on” – Cllr Lib Peck
An influential committee of MPs has warned that a plan to give housing association tenants the right to buy their homes could reduce the amount of affordable housing available across the country.
The Communities and Local Government committee, which took evidence from Cllr Lib Peck, leader of Lambeth council, also said the proposal to extend the Right to Buy to tenants of all social housing should be “funded by central Government, rather than through a levy on local authorities”.
Under the Government’s proposals, housing association tenants who take up their Right to Buy will be offered a discount – funded by the sale of “high-value” council homes.
But Lambeth say a report from the committee published on February 10th, claimed the discount could leave local authorities short of the money needed to build replacement council homes.
Cllr Peck told the committee at a hearing in November that the proposal amounted to “taxing a public authority like a council to pay for a private individual to enjoy the right to their own home”.
She added: “Now, I have no problem with people exercising their Right to Buy, but I do have a problem with a formula that takes away our ability, as a local authority, to build or negotiate around affordable housing, and actually makes the situation of supply even worse.”
The committee’s report found that “councils … need to be able to retain sufficient funding from the sales if they are to build new homes to replace those sold”, a Lambeth press release added.
The report also said that “large numbers of homes sold through the statutory right to buy for council tenants have quickly become private sector rental properties”. The committee quoted research showing that, in 2003, 21 per cent of properties in Lambeth bought under the RTB (right to buy) three years earlier were no longer owner-occupied.
The report quoted Cllr Peck’s warning about the lack of available land to build more homes in London.
She told the committee: “We are a very densely populated borough, so we do not have huge tracts of land yet to be built on, really.
“That is an issue, and we are working increasingly closely with some of the other public agencies where we think there is some potential—for example, the health service, the fire service and the police service—and looking at the public sector London estate.”
The Government has announced that it would “review the use of lifetime tenancies in social housing to limit their use … and ensure the best use is made of the social housing stock”.
The report said Cllr Peck had told them that: “We have talked a lot about housing as a building concept, but we are talking really about creating places and creating communities, and therefore you need an element of stability.”
On its House of Commons website the Communities and Local Government committee states that it came to the following view:
“The Government proposes to fund the Right to Buy discounts for housing association tenants with the proceeds from the sale of high value council homes. “We believe that public policy should usually be funded by central Government, rather than through a levy on local authorities.”
The committee also finds the robustness of the funding model for the RTB discounts is extremely questionable, calling on the Government to set out the fully costed evidence for the proposals.
The committee also calls on the Government to protect rural communities by maintaining and protecting the provision of affordable housing in rural areas. The terms of the housing associations’ voluntary agreement with the Government allow for portable discounts to be offered in place of certain properties. The committee considers that while the portable discount might mitigate the impact of extending the RTB to rural properties, it still remains unclear how it will operate.
The committee is concerned that the Government’s imposition of a one per cent rent cut for four years will lead to a significant reduction in housing associations’ income. This rent reduction threatens to damage the ability of housing associations to build new homes and could also have a negative impact on pastoral services, such as helping people get back into work, currently on offer to tenants.
The committee finds that large numbers of homes sold through the statutory right to buy for council tenants have quickly become private sector rental properties. The committee believes the potential for selling social housing assets at a discount, only for them to become both more expensive and possibly lower quality housing in the private rented sector, is a significant concern. The committee recommends measures to restrict homes sold through the right to buy ending up in the private rented sector need to be explored.
Proposals for the future
The committee calls on the Government, before the 2016 Autumn Statement, to provide some certainty over rent levels post 2020 which would help long-term business planning and increase investor confidence. In the long term, the committee recommends housing associations be given the freedom to set their own rents. The Government is committed to deregulating the housing association sector: freedom for housing associations to set the rents for their tenants should be the next step, since housing associations understand their tenants and the local market and are best placed to set fair rent levels.
The committee considered the proposed ‘pay to stay’ policy, where differential rents would be charged according to tenant income, and welcomes the Government’s announcement that this will be voluntary for housing associations. The committee believes the suggested thresholds should be reviewed and support housing associations being given local discretion, should they choose to adopt the policy.
The committee recognise the scale of the Government’s policies regarding Starter Homes and the new legal duty on councils to ensure provision of 200,000 new Starter Homes across all reasonably sized sites. But starter homes should not be built at the expense of other forms of tenure if there is a local need for affordable rented accommodation. It is important that homes for affordable rent are built where the need exists, particularly as starter homes can now count towards satisfying the affordable housing allocation in sect
The Communities and Local Government Committee report, “Housing associations and the Right to Buy”, is available at:
The committee statement is at: http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/news-parliament-2015/right-to-buy-report-published-15-16/
Cllr Peck appeared before the committee on Monday, 16 November 2015. Her evidence is here:http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/communities-and-local-government-committee/the-housing-association-sector-and-the-right-to-buy/oral/24630.pdf (Sources: Lambeth council press release / House of Commons website)..)