VACANT HIGH VALUE LOCAL AUTHORITY HOUSING (CLAUSES 67-77)

What is proposed?

The Government will require a payment from Councils with housing stock each financial year. The payment will be equivalent to the deemed sale value of vacant ‘high value’ council homes, less any costs or deductions but regardless of whether they are in fact sold.

What are the issues?

The key to the success (or otherwise) of the voluntary RTB lies in its funding. Councils are set to pick up the slack, with these payments intended for grants to housing associations, compensating them for selling RTB stock at a discount. There remain unanswered questions about how this complex relationship will work in practice. In particular, the method of calculating the payment and the assumptions upon which is based may prove challenging. There are also uncertainties around:

  • Definitions – drafting Regulations that work will be difficult. The concept of ‘vacancy’ has proven notoriously difficult to define in other contexts and was recently sidestepped altogether by Government in its ill-fated Vacant Building Credit policy. Similarly, determining ‘high value’ will be critical with the valuation exercise being notoriously difficult. Which method(s) will be used? How will it take account of regional variations?
  • Shortfalls – who covers any shortfall in receipts to top up grants? Will persistent shortfalls undermine the long-term availability of grant funding, diminish confidence and threaten the effectiveness of the measure? What happens if sums raised from sales are insufficient to cover the costs of replacement?
  • ‘Social’ housing – if replacement proves ineffective and stock further declines, the concept of funding the sale of (housing association) housing stock through the sale of (council) housing stock reinforces a perceived ideological shift, moving away from traditional notions of state provision.
  • Changes to the Bill during the Committee stage would impose a duty on the Secretary of State, the Mayor of London and London housing authorities to achieve the provision of at least two new units of affordable housing for the disposal of each of high value housing.  How viable that is remains to be seen. The key issue would seem to be the challenges, particularly in London, of achieving ‘one for one’ (let alone two for one) replacements of stock that is sold.  Local authorities will take a closer interest than ever in receiving and delivering new stock and partnership approaches to new development should reflect that.