HOMES Manifesto

Since its publication in the Conservative manifesto (much of which had been pre-announced) the extension of the Right to Buy to Housing Association tenants has attracted a mixture of ire, excitement and confusion. It was a late addition to the manifesto, following a debate between those who wanted to give houses away to tenants (such as Iain Duncan Smith) and those who wanted instead to extend the Right to Buy (like David Davis). From the point at which it was announced there have been various questions about the fairness, the legality and the practicality – particularly the practical question of whether the houses sold would be replaced with new construction.

Now the silt has been stirred up again by a speech by Greg Clark, in which he said:

“David Orr [Chief Executive of the National Housing Federation] and I have spent the summer working together on a proposal that he makes for a big place for this sector in the future of government. At its heart is a joint commitment to build more homes than we have built for decades. And it’s based on a recognition that you are voluntary organisations perfectly capable of working with me and with Brandon Lewis my housing minister and the government as willing partners rather than requiring legislative compulsion.”

On first impressions, that looks like a u-turn – where the Government had planned to legislate, it is considering instead striking an agreement with Housing Associations to offer a Right to Buy. In addition, the use of the word “voluntary” was taken by many to imply that not all Housing Associations would have to take part – meaning that instead of a guaranteed right for tenants to buy, the Government would instead be offering a strongly worded suggestion to Housing Associations that they ought to sell.

In the few months after an election people are particularly watchful for promises being broken and pledges ditched, and this has a reputation as a tricky policy, so it’s understandable that a hue and cry instantly began about the Government performing an about face.

I’m told that isn’t really the case. The Government would apparently prefer to strike a deal with the Housing Associations in order to get on with the policy swiftly, and without getting bogged down in the House of Lords. Importantly, though, such a deal would have to involve all the Housing Associations – allowing some to opt out would undermine the point of the policy. And if the sector isn’t willing or able to agree a deal, then Ministers will still legislate – they would just prefer to be able to crack on now.

A full deal has yet to be hammered out but Clark’s speech does include some details on exemptions:

“The presumption would be that most people would have the chance to buy the home that they live in. But just as with the council Right to Buy sometimes there may be good reason why that’s not in everyone’s interest: In a rural area where planning restrictions mean replacements simply can’t be built for example, where the property is part of a wider service that’s been provided such as sheltered accommodation. In cases like this, the association would have the discretion, if reasonable in the spirit of the scheme to offer an alternative home, and the tenant would have the option to take their discount to the other property.”

On the important question of building replacement houses, the Secretary of State also pledged that for every house sold, one would be built, and that Housing Associations would normally do the building. It seems the sector particularly wants to ensure that money received from sales shouldn’t go to other agencies or sectors – not unreasonably.

There is some precedent for such an agreement on replacement house-building in the way that Right to Buy was extended by the Coalition. Under that policy, councils have the right to retain the money from the sale of a house as long as they start to build its replacement within the following three years. If they don’t agree to do so, or if construction hasn’t started in that timeframe, then the money is taken off them by DCLG and used to build a replacement house directly. Such a system could easily be transposed across to the Housing Association Right to Buy.

So it seems the panic over Clark’s speech was somewhat overblown. That said, this remains a tricky policy area – telling technically independent organisations or even charities what to do with their assets is complex, the Treasury wants to avoid any risk of bringing Housing Association debt onto the public balance sheet, and the proof of replacement housebuilding would still be a few years down the line. It still needs a watchful eye.

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