The clock is ticking for Right to Buy

The clock is ticking and time is running down for Housing Associations to decide whether to accept, voluntarily, the Right to Buy extension or allow it to be imposed upon them by statute.

Hastoe Housing’s board are the first to publically announce that they will be using their 7000 votes to reject the offer, but will they be the only ones?  Meanwhile in London the G15 have announced that its members will, unanimously, be using their 550,000 votes to accept the proposal.

It is accepted that, given that voting is based on the number of homes an association has rather than one member one vote, the offer is likely to be accepted.  However, whilst the NHF has published the details of its “offer” the substance of any regulations are, as yet, unpublished.

It may therefore be useful to remind ourselves of how the existing Right to Buy works as it seems likely that any extension is going to follow this fairly closely:

• The Right to Buy exists for public sector tenants holding a secure tenancy only and allow them the right to buy the property in which they live (there is no provision for alternative properties to be offered by the landlord currently – the Right to Acquire does have this provision but it is limited to three properties and if those are not acceptable to the tenant the landlord has to sell the property in which the tenant lives).
• Tenants are entitled to a discount starting at 35% and increasing annually from the fifth year of their occupancy at the rate of 1% per year for houses and 2% per year for flats, up to a maximum of 70%.  The discount is then subject to a cap of £77,900 outside of London and £102,900 in London.
• Discounts are repayable if the property is sold with the first five years of ownership, and must be offered back to the Council if sold at any time within the first ten years of ownership (regardless of how often it may change hands in that time).
• Various properties are exempted from the Right to Buy, amongst them are properties held by charities and properties constructed or adapted for use by people with a disability (though it is worth noting that the exemption currently doesn’t apply to one off properties adapted in this way but requires such properties to form part of a development of similar homes and for some form of social service or extra care to be provided on site or nearby – the result being that fewer properties will be exempt if this remains as it is drafted).

It is worth noting that one of the key statements made regarding exemptions is that rural properties will be exempt. This is a departure from the current Right to Buy as rural properties are not currently exempt (they are under the Right to Acquire, however).

It is also worth considering that the exemptions at Schedule 5 specifically exclude Housing Associations from the Right to Buy.

We therefore must conclude that primary legislation is going to be necessary to enact any voluntary deal with the sector, if only to amend what currently exists.  How far that legislation goes is in your hands…