New social housing in Birmingham comes with Right to Buy stipulations

City Council plans major 10-year house building programme with would-be RtB purchasers facing full property construction costs.

 

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Tenants purchasing new council homes planned for Birmingham will have to pay the full construction cost of the property – irrespective of any discount to which they may be entitled under Right to Buy (RtB) – for the first 15 years following completion.

Birmingham Municipal Housing Trust (BMHT) – the house building arm of Birmingham City Council – plans to build nearly 3,000 new homes by 2029.

BMHT celebrates its tenth anniversary having built 3,126 homes to date, with a further 365 homes currently under construction.

These homes have provided significant housing growth and BMHT is now the largest authority housebuilder in the UK.

An estimated overall cost of the 10 year development plan is £346.3m should it go ahead in its entirety, with future running costs of the properties met from their ongoing rental income – resulting in an overall revenue surplus to the HRA over 30 years of £12.7m.

The financial viability of the proposals is based on the social housing rent policy that following the 1% reduction in 2019-20, rents will then revert to Customer Price Index (CPI)+1% in 2020/21 for the next five years.

Cllr Sharon Thompson, council cabinet member for homes and neighbourhoods, said that with the city’s population set to grow by a further 10% over the next 15 years, there was a “pressing need” to deliver more affordable, family housing within accessible locations.

“I’m delighted that Birmingham City Council is leading the way in social housing and is moving forward with its ambitious plans for the next ten years.”

The homes will be subject to the Right to Buy cost floor regulations, which mean that for the first 15 years following the completion of new homes, any tenant purchasing their Council property through RtB  will be obliged to pay the Council the full construction cost of the property – irrespective discount eligibility.

There are currently around 10,500 people living on the Council’s waiting list for affordable housing, many enduring overcrowded conditions across the housing sector.

Evidence from allocating properties previously developed under the BMHT banner has exposed the  extent of this problem as families are allocated accommodation to squeezed for their needs.

The BMHT Delivery Plan for 2015-20 included an Equality Impact Analysis which works operates City-wide and includes areas where different cultural requirements need to be reflected in the design of the homes provided.

Through the BMHT programme, the Council provides homes that reflect the Strategic Market Assessment for Birmingham with an emphasis on 2 bedroom houses and 4+ bedroom houses.

Though these homes are acknowledged by the council as a “clear driver” and make up the majority of the new development programme, there’s also scope for other needs such as vulnerable people without children and elderly residents who wish to downsize.

Local need, site restrictions and financial viability are taken into account when determining the exact mix of homes and typologies to build on each site. 

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