Agenda item

To receive a presentation on the introduction of ‘Sale of Vacant Higher Value Council Homes’ and ‘Pay to Stay’ housing policies.

The Housing & Community and Housing, Property & Performance Service Managers gave an overview of the recent changes to social housing policies as a result of the Housing and Planning Act 2016 which received Royal Assent in May 2016.

The social housing elements of the Act included the following policies which were expected to come into force from April 2017: -

Higher Value Council Homes

The Act required councils to sell higher value housing as it became vacant. What constituted ‘higher value’ would be the subject of regulations made under the Act but essentially it would take into account different types of housing, local authorities and geographical areas. The rationale behind the duty was to raise money to support the extension of the Right to Buy scheme to Housing Associations tenants. The Act gave the Secretary of State the power to demand that any council sell a yet-to-be defined proportion of their vacant stock in their area that was relatively more expensive. Councils would also have to forward on receipts from the sale of the house to the Government.

An independent analysis undertaken by the charity Shelter had predicted that the New Forest could be asked to raise approximately £17 million through selling an average 67 homes per year.  This was based on the need to raise £4.5bn per year as calculated by the Conservative Party in their April 2015 press release to fund the extension of Right to Buy.

A consultation exercise was currently underway to determine the level of funding formula for the New Forest.  This matter would be brought back to the Panel once details had been received from central Government.

Pay to Stay

The Act made provision about the levels of rent that a local housing authority could charge a high income tenant. High income tenants were defined as households with incomes of £31,000 outside of London, for example a couple each earning £15,500 would be defined as higher income earners who would have to pay closer to market rents. Tenants on housing benefit and universal credit would be exempt. However tenants aged 65 and over would not.

For eligible tenants earning above the income thresholds, rent increases would be graduated. Every £1 earned above the threshold would mean a 15p increase. The additional rent taken from tenants would go the Government, with Local Authorities retaining a proportion (yet to be determined) of this to administer the policy.

Analysis undertaken by Savills on behalf of the LGA calculated that rents could increase on average by £72 per month.

Officers anticipated that this new policy could be deferred, but more would be known in the next few weeks following the Government’s budget statement.

As further guidance was awaited from the Government in relation to both policies, it was unclear how these would impact on the Council and ultimately Council tenants and New Forest residents. As such, the Panel requested that this item be discussed at a future meeting, when the situation became clearer.

RESOLVED:

That this item be brought to a future Panel meeting.

Subsequent to the meeting, the Government had confirmed that they would not make the Pay to Stay Policy compulsory. The Government have also delayed the Sale of High Value Assets by a year to 2018/19 while they gather additional information. No sales or payments would therefore be required during 2017/18.