Red flags flying over Right to Buy

How can people who can’t afford the rent suddenly afford to buy?

To recap in case you missed it, a joint investigation by Inside Housing and BBC Radio 4’s File on 4 found that 16% of Right to Buy sales by 10 councils were to tenants on housing benefit.

This is not in itself evidence of fraud: the 721 tenants concerned could have got money from their family or from a third party. But it is seen as a ‘red flag’ of potential fraudulent activity and a particular cause for concern in the councils with the highest levels of sales to tenants on benefit:  Dudley (37%) and Westminster (29%) and Croydon and Birmingham (who each estimate around half).

And it’s one aspect of a fraud problem that should also set the alarm bells ringing about the 1.2m tenants who are about to get a form of Right to Buy from housing associations that will not have the same expertise as local authorities in detecting fraud and money laundering.

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The Housing Bill: Last word

Originally posted on May 11 on Inside Edge 2, my blog for Inside Housing

The end of resistance to the Housing and Planning Bill leaves one big question hanging: why was the government so completely determined to undo an amendment that delivered its manifesto commitment on higher-value sales?

On the face of it, the amendment by Lord Kerslake that ping-ponged back between the Commons and the Lords should not have been such an issue. It would have put on the face of the bill the funding of replacements for ‘higher-value’ homes where local authorities sign an agreement with the Department for Communities and Local Government (DCLG). It also gave them the chance to make the case for social rented replacements, though the DCLG would not be required to accept this.

But ministers treated this as a wrecking amendment and claimed financial privilege on the grounds that it would fatally undermine their plans to pay for Right to Buy discounts for housing association tenants. Their determination was reflected in a piece in Wednesday’s Sun that included a threat to make the Commons sit all night and a personal attack on Lord Kerslake by Brandon Lewis.

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Questions of power

Originally posted on May 9 on Inside Edge 2, my blog for Inside Housing

The May elections have a common theme when it comes to housing: can the winners really do what they say?

From Sadiq Khan to Marvin Rees, from Nicola Sturgeon to Carwyn Jones and from council leaders all over England to the voters of St Ives, winning the elections last week was the easy bit. The hard work starts now.

I’ll start with the poll closest to me: the referendum in St Ives on a Neighbourhood Plan that will ban the building of new second homes that has brought national attention.

More than 80% of residents supported the plan last Thursday and it’s impossible not to sympathise. Around a quarter of the homes in St Ives are either second homes or holiday lets and the problem is even worse in other Cornish communities. That does not just price out locals it also means a lack of year-round residents that makes it hard to sustain vital services and infrastructure.

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The Housing Bill: Mind the gap

Originally posted on May 4 on Inside Edge 2, my blog for Inside Housing

What is the difference between ‘high’ and ‘higher’ value when it comes to the forced sale of council homes?

The two letters were added to the Housing and Planning Bill in a government amendment in the House of Lords last month. The government argued that the switch would help areas facing the highest housing pressure – inner London boroughs plus places like Harrogate, Oxford and Cambridge – that would all have ‘a high proportion of their stock defined as “high value”. The minister, Baroness Williams, said she could ‘confirm absolutely’ that it would not be used to raise more money.

But new analysis by Shelter suggests that the shift in the Bill to a levy on ‘higher value’ sales could mean councils having to sell 23,500 homes a year, six times more than under the previous ‘high value’ thresholds.

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The Housing Bill: The final lap

Originally published on April 29 on Inside Edge 2, my blog for Inside Housing

The worst excuse for a Bill that I can remember in 25 years of writing about housing limps back to the House of Commons next week.

The Housing and Planning Bill’s tail is not quite between its legs as all the key elements are still there and the Commons will reverse some changes. But it’s been gutted in the Lords, with two more defeats for the government on Wednesday, and this morning (Friday) it’s the subject of withering criticism by the all-party Public Accounts Committee.

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Paying the price for Pay to Stay – Part 2

Originally published on March 22 on Inside Edge 2, my blog for Inside Housing

This concluding part of my blog on Pay to Stay follows up more clues on how the government wants the policy to work. Part 1 focuses on how the tapers will work plus issues about the assessment of incomes and market rents.

Just to confuse things even further, a statutory instrument on social housing rents published on Friday stipulates that the four-year 1% rent cut that applies from April 2016 does not apply to households with incomes of more than £60,000 (in the current or previous year). This is a reference to the existing voluntary Pay to Stay and I assumed at first it simply meant that the relatively few landlords who have implemented it would not reduce the rents of ‘high income’ tenants who are already paying higher rents. However, it seems that as drafted it means that landlords would have to exclude all tenants with an income of more than £60,000 from the cut  – even though there is currently no obvious way for them to find them all. Appropriately enough the regulations come into force on April 1.

The Housing and Planning Bill makes Pay to Stay compulsory for local authorities but reduces the household income thresholds to £30,000 outside London and £40,000 in London. Any increased rental income has to be paid to the Treasury. It remains voluntary for housing associations. Here are five more issues raised in the Lords.

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Filling in the blanks in the Housing Bill

Originally posted on March 10 on Inside Edge 2, my blog for Inside Housing

Key elements of the Housing and Planning Bill have faced serious scrutiny in the last couple of days but we’re still not much nearer to knowing how or if they will work.

The frustration of MPs and peers is palpable as they repeatedly ask for more detail and are just as repeatedly told that it will be available shortly. It was all too much even for a Conservative MP on the Public Accounts Committee (PAC) on Wednesday afternoon. ‘You’re treating the parliamentarians around this table with contempt,’ Stephen Phillips told two senior Department for Communities and Local Government (DCLG) civil servants. ‘You’re asking us to take this on faith. Why not do the work first and then bring the legislation forward?’

The answer is of course that it’s much easier for ministers if it works the other way around. Under current plans, the crucial detail will appear in secondary legislation only after the bill has Royal Assent.

The PAC was investigating the value-for-money aspects of the extension of the Right to Buy to housing associations and the levy on forced sales of council houses that is meant to fund it. But members didn’t get far asking for detail. ‘The timings have yet to be determined,’ ran one senior civil servant answer. ‘The amounts have yet to be determined. The formulae have yet to be determined.’

The National Audit Office (NAO) is not impressed either. Here’s its assessment of the government’s impact assessment of the bill:

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