31% of ALMO Right to Buy stock not replaced in 2018

The latest National Federation of ALMOs annual report has shown the sector is still struggling with replacing stock sold through Right To Buy.

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The annual survey looking at the state of the ALMO sector in England has shown latest build figures and wider impact on communities.

One of the stark figures is that only 46% of Right To Buy sales were replaced with new build. This figure rises to 69% when acquisitions are included.

Of the 31 ALMOs, three quarters of the building was done by just six, showing a real challenge for the sector. The year before, 59% was being built by just three of them.

The NFA, which authored the report, says this is a “year-on-year problem with properties not being replaced fully from previous years’ sales”.

ALMOs built 1,280 new properties and acquired 669 homes in 2018, totaling 1,949 new social rented homes.

However, within those ALMOs at least 2,813 properties were sold under the Right To Buy across the sector, which gives a net loss of at least 864 properties.

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These 2018 figures are better than in 2017, where the current 31 ALMOs built 892 properties and acquired 470.

However, they sold 3,123 homes under the Right To Buy, giving a net loss of 1,761 homes to rent. In that year, only 29% of the Right To Buy properties were replaced with new build.

Statistics from the survey show Right To Buy sales falling in the North, London and Southern and South West regions, but staying steady in the Midlands.

In the London and Southern region and the South West, total new-build and acquisitions were higher than Right To Buy sales.

The survey also maps out where the sector is going with development.

Over the next 12 months, ALMOs plan to build or acquire 2,514 properties. The breakdown of tenure is largely in line with the 2018 development programme:

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23 out of 30 ALMOs (77%) have plans to develop a total of 1,801 new properties over the next 12 months. 74% of these will be HRA owned and 20% ALMO owned.

The breakdown of new properties is broadly in line with this year’s new build:

  • Social Rent: 12%
  • Affordable Rent: 74%
  • Market Rent: 2%
  • Shared Ownership: 11%
  • Other: 2%

20 will be developing in the HRA, 14 with HCA grant and six in the General Fund.

Two ALMOs will be developing in partnership with another social landlord, while one ALMO is utilising private investment.

21 out of 30 ALMOs (70%) have plans to acquire 713 properties over the next 12 months.

21% will be ALMO owned, 38% HRA owned, 21% General Fund owned, and 19% housing company owned.

21% of these will be at social rent, 49% Affordable Rent, 15% Market Rent, with 15% other.

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The report also delved into the governance structures of the ALMO sector and what it was doing post-Grenfell to ensure that it did best by residents.

The report says: “The ALMO sector has a clear commitment to ensuring that their boards are fit for purpose.”

Overall, 70% of ALMOs are either reviewing their boards currently, are planning to, or have done in the past 12 months.

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A well-publicised strength of the ALMO model is the board model, which is made up of tenants, councillors and others.

The statistics showed 30% tenant representation on boards across the sector, with 36% being independent, 29% from councils and 5% other.

On these figures, the report states: “The higher number of independent members in the split possibly reflects the diversity of the work that ALMOs are now undertaking, with a desire to include specialist skillsets on boards.

“However, as with previous years, the commitment to tenant representation is unchanged.”

This diversity of work is something ALMOs have had to do to survive in a tough political climate.

28 out of the 30 ALMOs deliver services on behalf of their local authority. This can range from tackling worklessness and homelessness services, to family support services and project management consultancy.

The report states that the ALMOs are also delivering for other companies, such as half of respondents providing management or maintenance services for other non-domestic properties such as educational establishments or commercial and retail services.

Half of ALMOs deliver care and support services, the majority on behalf of their own local authority, with three delivering for other local authorities, and five delivering as a market product.

60% of ALMOs utilise their expertise to deliver services in the wider marketplace as a means of generating additional income for the ALMOs.

Eamon McGoldrick, Managing Director, commented on the reports: “This year’s annual survey of the ALMO sector shows how important our members are in the communities where they work.

“They have continued to build new homes, deliver services on behalf of their parent local authorities, and contribute to the wellbeing of communities.

“However, the survey also shows the impact that Right To Buy is having on the stock of council housing, with ALMOs only able to replace 69% of the RTB sales this year.

“Whilst we welcome the recent changes to local authority finance, which will support the building of a new generation of council housing, unless the government implements the flexibilities to RTB that we have been calling for, it is like a leaking bucket.

“The sector will continue to lose more council homes than it can replace.”

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