The government is sticking with its plans to make councils sell off their higher value assets to fund housing associations’ Right to Buy.
In a report out last year, the Communities and Local Government Committee made a recommendation that government should fund the ‘public policy’.
However, the government has rejected that, saying “we made a clear commitment” to fund the policy by “requiring councils to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.”
The government also hit out at the “£200bn of value locked up in council housing”, saying it “makes no sense for a local authority to keep hold of higher value vacant council homes when it could sell them to fund additional housing”.
The policy has so far caused some friction between local authorities and their housing association partners.
Despite saying the definition of ‘higher value’ is still being considered and will be announced in due course, there are some references to how government have been estimating it.
They say: “The reference to higher value will mean that the thresholds for determining the payments will reflect local circumstances.
“It is important that our decision on the definition of ‘higher value’ is fully informed. That is why we engaged with local authorities and other stakeholders and undertook a data collection exercise, gathering detailed information from local authorities on their housing stock to inform how the threshold will be set. This has produced sixteen million items of data, which have been assessed.”
Another CLG committee recommendation is to allow councils to retain “sufficient funding from the sales”.
The government has responded that it is up to councils to make deals with the secretary of state on this. Those outside London will be able to build one for one replacements should they strike a deal, with those inside London having to replace two for one.
The government response does outline that new housing does not fall into the vacant category for this policy.
On the policy itself, the government responded to concerns from the committee about situations where housing associations do not want to sell a home.
It said there are “broad circumstances where a housing association would exercise discretion and decline a sale”, adding it will be working closely with the sector on this.
It also stated it anticipates an association providing an alternative home from its stock, or that of another housing association – working within the sector to do deals to make this happen.
On the administration fee of the policy, which may hit some housing associations with a high price before a purchase is made, government said: “The government and the National Housing Federation are working together to develop an efficient implementation process that is both easy for the tenant to navigate and minimises the burden on housing associations.”
The committee put forward the idea of using the Northern Ireland policy of charging a set nominal administration fee that will be refunded on completion of sale.
The government added: “We are examining the impact of this fee as part of our learnings from the pilots and will ensure that these are built into the design of the main scheme.”