The Tory Government's Housing and Planning Act, which is expected to decimate social housing, is hugely complex and many details have yet to be defined. Adrianne LeMan, Barnsbury ward, highlights the key features of the Act.
The Act is designed to “make provision about housing, estate agents, rent charges, planning and compulsory purchase”. It is enormous, difficult to understand, is written in “officialese” with constant references to other documents, and the author clearly has an aversion to commas. Fortunately, The Chartered Institute of Housing (CIH) has produced a useful summary of the Act, which I have used to set out the main points.
Extension of the right to buy: Housing associations will extend the right to buy to their tenants, and will be compensated by the government for the cost of the discounts offered.
Sale of higher-value vacant local authority homes: Local authorities (LAs) will have to sell their higher-value (as defined by the government) homes as they become vacant. Each year, LAs will have to pay the Treasury an amount that the government estimates they will receive from the sales. All higher-value homes will be replaced with other “affordable homes”, including starter homes. In London the replacement rate is expected to be two new homes for each one sold, but is there land available?
Starter homes: All LA planning departments have to promote the supply of starter homes, which will be for sale exclusively to first-time buyers aged 23 to 40, at a 20% discount to market prices.
Mandatory use of fixed-term tenancies: Most new LA tenancies must be for fixed terms of between two and ten years, although households that include a child under the age of nine may be given a tenancy that lasts until the child is 19. There are likely to be other exceptions that will be defined at a later date. At the end of the fixed term, the LA can offer a new tenancy at the same, or a different, property.
Higher-income social tenants: Higher income tenants (initially defined as a household earning more than £40,000 a year in London), will have to pay higher rent at a rate of 15p for every £1 above the threshold; this income will go to the Treasury, not to the LA. Tenants will have to declare their income to the LA, which will have to share the data with HMRC.
The Act includes a number of other measures that cover planning consent, rogue landlords in the private rented sector, and so on. The ambition to increase house building is good, but CIH estimates that, compared with 2012, by 2020 there are likely to be 370,000 fewer homes for social rent, and that the revenue from sales of higher-value homes is unlikely to be enough to build replacements as well as to compensate housing associations. In addition, if extra funding is not provided, up to 7,000 council homes will be lost each year.
Replacement homes, particularly in London, are unlikely to be in the same areas as those that have been sold. It is unreasonable to expect people, particularly older people, to move away from the area where they may have lived for most of their lives, and that is probably also away from their families.