Bill of wrongs

Today’s Housing Bill contains nothing that was surprising, except it is stuffed with omissions. Almost everything that could have been of interest is left to subsequent regulations by the Secretary of State. There is much of merit on rogue landlords and planning issues, and pay to stay is included, but I will focus on the three key issues that have exercised us over the past few weeks.

Starter Homes: These are defined in Part 1 and the section 106 issue is dealt with quite succinctly. “The Secretary of State may by regulations provide that an English planning 
authority may only grant planning permission for a residential development of 
a specified description if the starter homes requirement is met.” My assumption is that national planning guidance will be amended to include starter homes within the definition of affordable housing and that starter homes will be the “presumed” tenure unless the developer and the local authority agree otherwise. The detail on quotas etc will be included within forthcoming regulations. The Bill also states: “The regulations may confer discretions on an English planning authority.” The net effect will be the virtual end of affordable rented homes on section 106 sites and their replacement by a product that is unaffordable across most of the south east.

Right to Buy: The chapter is headed “Implementing the right to buy on a voluntary basis” but it is clear that all registered housing providers will be compelled to sell their homes to tenants wishing to exercise the right to buy, whether they voted for the deal or not. The HCA and the GLA will be empowered to give grants to cover the cost of the discount given to the buyer, although, as I have mentioned before, there is no reason why the amount of the grant paid could not be varied over time (starting at 100 percent, reducing to 90 percent, then 80 percent and so on. This concept applies to the rest of the Bill: legislation by regulation can lead to seemingly good deals being eroded step by step by ministerial decree.) There is no mention of the exemptions to Right to Buy set out in the NHF offer. No mention of receipts or replacements, whether one for one or any other methodology. Again we will have to wait for the detail and to see whether, in particular, the exemption for non-grant homes has been accepted by the government. By my reckoning this could embrace over 300,000 properties and I am doubtful that the governement will concede on this.

The HCA and the GLA will be required to “monitor compliance with the home ownership criteria” which means criteria “that 
relate to the sale of dwellings by private registered providers to tenants 
otherwise than in exercise of a right conferred by an Act.” In other words this “voluntary scheme” (not in an Act) will be monitored and enforced through the regulatory standards. My guess is that there will be a revised tenancy standard or perhaps a new standard altogether. Again, details to follow. “The criteria may be expressed by reference to other documents.”

Then, the “Regulator must provide such reports or other information as the Secretary of State may request about compliance with the home ownership criteria” and, “The Secretary of State may publish information about a private registered 
provider that has not met the home ownership criteria.” In other words enforcement and regulatory judgements will ensure right to buy is applied across the board. That’s the reward for the 45 percent of housing associations who voted against the offer, or abstained, or did not vote.

In terms of forced council sales the Bill states that for any stock-retaining local authority, “The Secretary of State may make a determination requiring a local housing authority in England to make a payment to the Secretary of State in respect of 
a financial year. The amount of the payment must represent an estimate of the market value of the authority’s interest in any high value housing 
that is likely to become vacant during the year”, less any admin costs.

As you might have guessed by now, “high value” is to be determined by regulation. My reading of this section suggests that councils will have to assess the value of any “high value” voids coming up in a year and then send this sum of money to the Treasury, minus any costs. It doesn’t say they have to actually sell the properties to do this, and they can offset it against any other grants received. The Bill states that, “A local housing authority in England that keeps a Housing Revenue Account must consider selling its interest in any high value housing that has become vacant”. But I would imagine many councils would struggle to find the funds without selling their best property.

And they can’t avoid making these payments by transferring their stock to a housing association either.

Reducing regulation: this is the theme of Chapter 3 of the NHF offer but it is dealt with in a single paragraph:“The Secretary of State may by regulations amend Part 2 of the Housing and Regeneration Act 2008 for the purpose of reducing regulatory control over private registered providers of social housing or their affairs.” So yet again, we will have to wait to see the detail.

There is so much silence on so many key issues that the Bill is hardly worth the paper it is printed upon. Almost everything will be subject to future regulation and determinaton by the Secretary of State. All in all, it’s like the dog that barked in the night. It didn’t.

(First published at Inside Housing on 13th October 2015)

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