Right-To-Buy Could Be Extended To Up To 2.5M Housing Association Tenants

[TheCountOfNowhere]

2.5 million more banker slaves.

[long time lurking]

I think the key thing I took from the original article is this potential of RTB for HA is only applicable for properties acquired by HA after 1997. The home I live in was acquired by my HA back in 1984. I can guarantee you it has paid for its upkeep from the (non-profit) rent extracted from it over the 30+ years its been with my HA plus more.

Basically, my HA is doing what F***KING lazy governments/councils should have been doing for the last 30+ years.

A revolution is all that's left for the young adults of today, when they eventually wake up to how shafted they have been, it seriously is!

I think this backs up Bland Unsights line of thinking quite nicely

[Snugglybear]

I get tired of saying this. These are the Tories talking - they are idealogically opposed to there being any state housing.

If too many people living on the street is too embarassing or downright dangerous, they will pay from taxes for people to have something to sleep in, but the money must go into the pockets of private owners.

[subspace]

It is one thing for the government to sell off council houses at a discount, as they are effectively state-owned assets.

However, housing associations are private (albeit non profit) companies. Forcing them to sell off their houses at a discount could well fall foul of human rights laws. The government may have to compensate them for the discount.

[Bland Unsight]

I think the key thing I took from the original article is this potential of RTB for HA is only applicable for properties acquired by HA after 1997. The home I live in was acquired by my HA back in 1984. I can guarantee you it has paid for its upkeep from the (non-profit) rent extracted from it over the 30+ years its been with my HA plus more.

Basically, my HA is doing what F***KING lazy governments/councils should have been doing for the last 30+ years.

A revolution is all that's left for the young adults of today, when they eventually wake up to how shafted they have been, it seriously is!

That's bizarre - why 1997?

[Eddie_George]

That's bizarre - why 1997?

[long time lurking]

That's bizarre - why 1997?

Offloading assets they overpaid for at the top of the market to the greater fool ?

[Son of Taeper]

I get tired of saying this. These are the Tories talking - they are idealogically opposed to there being any state housing.

If too many people living on the street is too embarassing or downright dangerous, they will pay from taxes for people to have something to sleep in, but the money must go into the pockets of private owners.

Urrr, if you want state housing what are you doing on this site???

The site is named Housepricecrash for a reason.

That said, and as you brought the subject up, Labour had 3 terms to sort the problem and I see little done by there term of office. I was lucky enough to be offered the chance to buy and full employment under Conservatives back in the Thatcher days.. Check your politics out , go figure how many companies went bust under Labour.

[Neverwhere]

That's bizarre - why 1997?

I think this is actually an aspect of the existing right to acquire scheme - i.e. housing association tenants' existing right to purchase at a limited discount - which was introduced in the 1996 Housing Act. Presumably this didn't come fully into force until 1997 and was not backdated due to the potential impact on existing business plans/loan arrangements (generally explaining why circa 75% of housing association tenants were removed or excluded from the the more generous right to buy scheme by the previous conservative government, although not why the viability of existing local council financial arrangements were apparently a non-concern).

As the 1996 Act includes the provision that the “Secretary of State may by order . . . specify the amount or rate of discount to be given on the exercise of the right [to acquire]” it might be possible for the government to just increase right to acquire discounts and bring them in line with the higher discounts offered under right to buy, in which case the same cut off point would apply.

However, there are other differences between these schemes - for instance, from a very brief glance at the relevant Acts, the right to acquire discount seems to be reimbursed to the landlord in the form of a grant; whereas the right to buy discount seems to instead be limited to an amount that does not take the sale price below the costs incurred by the landlord over the last eight years - which could mean that this would not be a workable proposition and that new legislation would be required.

It might well be that any updated right to buy scheme would therefore only apply to tenants of housing association properties purchased after the date that the new legislation comes into effect, implying that it would not have any impact at all for several years and would have little relevance for current tenants. If not and the legislation did encompass properties purchased prior to its coming into force then there would seem to be serious potential problems in regards to loans already secured against these properties and both housing associations' and lenders' ability to have engaged in effective financial planning. Presumably the only way to circumvent these would be through covering the short fall to both housing associations and lenders as per the current right to acquire scheme (in which case my example above would clearly not be the driver of new legislation).

There's a parliamentary briefing that goes into the numerous current (as of Feb 2014) housing association specific right to purchase schemes available here:

Housing association tenants: Right to Buy (England)

. . .

Council tenants are generally secure tenants, the vast majority of whom have the Right to Buy the home in which they live at a discount. This statutory right was introduced by the 1980 Housing Act and was subsequently consolidated into the 1985 Housing Act. Housing association tenants who entered into their tenancy agreements prior to 15 January 1989 (the date on which Part 1 of the 1988 Housing Act came into force) are also secure tenants. These tenants enjoy the same Right to Buy their homes as council tenants under the 1985 Act. This right does not extend to tenants of charitable housing associations.

It is estimated that less than 1% of housing association tenants are eligible for the Right to Buy as a result of being a secure tenant.

. . .

Housing association tenants who entered into their agreements after 15 January 1989 are assured tenants whose rights are governed by the 1988 Housing Act. As a general rule assured tenants of housing associations do not have the Right to Buy the home in which they live (section 3 below explains one exception to this rule).

. . .

The rationale for exempting assured tenants from the Right to Buy is based on the need for associations to provide security for private lenders. If these tenants were able to buy their homes, the value of an association's asset base would gradually be eroded and their rental stream reduced; it was recognised that, in turn, this would make lenders cautious about backing them.

. . .

An exception to the general rule (of no RTB) exists where, following a transfer of a local authority's stock to a housing association, the existing secure tenants of the authority become assured tenants of the new landlord; these tenants retain a preserved Right to /buy. The right can persist if the tenant moves to another property owned by the new landlord but it will be lost if the landlord changes again.

It is estimated that around 620,000 housing association tenants, having transferred in their homes from a local authority to a housing association, are currently eligible for the presered RTB. The represents around 25% of all housing association tenants.

. . .

To date, the Government have not indicated an intention to extend the RTB to all housing association tenants:

Henry Smith: To ask the Secretary of State for Communities and Local Government what his policy is on extending tenant right to buy to housing association homes; and if he will make a statement.

Mr Prisk: The Government are keen to help social tenants achieve their aspiration for home ownership where this is affordable and sustainable for them. All social tenants have priority for Government-funded affordable home ownership schemes, for example, shared ownership and the FirstBuy equity loan scheme, to help them into home ownership. These schemes can be of particular benefit to those without a right to purchase. Landlords may also offer voluntary sales schemes to assist their tenants to purchase their rented home.

. . .

The 1996 Housing Act introduced the Right to Acquire. This is a statutory right for tenants of housing associations to acquire their homes at a discount to the open market value. The right applies to eligible tenants of associations who live in eligible properties or new lettings provided with Social Housing Grant (or transferred to a housing association) after 1 April 1997.

. . .

Under the Right to Buy the 1985 Act provided that this right 'overrode' a lender's security rights. For the Right to Acquire, landlords must serve notice on the lender informing it of the impending sale and providing certain information, including whether the association intends to redeem the charge in relation to the relevant property. If the charge is not redeemed the lender must be offered the option of taking alternative security or accepting a payment of a sum equal to the sale plus the discount. Regulations provide that the parties concerned may 'contract out' of these provisions.

. . .

The Social HomeBuy scheme is aimed at assisting tenants of social landlords who do not qualify for the Right to Buy or Right to Acquire or who cannot afford to exercise these rights, to buy a share of their rented home.

This discretionary scheme operates on a shared ownership basis – tenants buy a minimum share of 25% of the value of the property. The purchase attracts a discount which is the Right to Acquire discount (generally between £9,000 and £16,000 – depending upon the local authority area in which the property is located), pro-rata to the share purchased. Since 1 April 2008 new applicants have also been entitled to receive a discount on further shares.

[Bland Unsight]

I think this is actually an aspect of the existing right to acquire scheme - i.e. housing association tenants' existing right to purchase at a limited discount - which was introduced in the 1996 Housing Act. Presumably this didn't come fully into force until 1997 and was not backdated due to the potential impact on existing business plans/loan arrangements (generally explaining why circa 75% of housing association tenants were removed or excluded from the the more generous right to buy scheme by the previous conservative government, although not why the viability of existing local council financial arrangements were apparently a non-concern)...

Thanks.

[Guest_northshore_*]

Confirmed, apparently: http://www.ft.com/cms/s/0/8f4bedbe-e1f1-11e4-bb7f-00144feab7de.html"Cameron to expand Right to Buy to regain initiative from Miliband".

on Tuesday...use the launch of the Tory manifesto...promising 1.3m housing association tenants the chance to buy their homes on the same terms as council tenants...denounced by housing associations, which claimed the move would deter them from building new homes, adding that it would cost the taxpayer £5.8bn in subsidies to the home buyers.

[Liquid Goldfish]

Confirmed, apparently: http://www.ft.com/cms/s/0/8f4bedbe-e1f1-11e4-bb7f-00144feab7de.html"Cameron to expand Right to Buy to regain initiative from Miliband".

The Tory leaning papers are all featuring it in their headlines now - going mad for it! - sounds like a desperate throwback to me - but will it be popular?

[billybong]

It is estimated that around 620,000 housing association tenants, having transferred in their homes from a local authority to a housing association, are currently eligible for the presered RTB. The represents around 25% of all housing association tenants.

It depends on the price/value of the properties but for example 620,000 X £50,000 = £31 billion - and that's only 25% of all housing association tenants. Even spread over a few years that's a massive amount.

For all housing association tenants it's about £120 billion. If it's 70% off as reported in the mail link in the other HPC link then those figures are more than double - maybe the 70% off is a typo error. Apparently there might be a discount cap to consider as well.

They must have done their sums of course.

(£50,000 just used as a round figure assuming it's about 30% of the price)

http://

www.dailymail.co.uk/news/article-3037686/A-new-right-buy-revolution-35-years-Maggie-s-visionary-policy-Cameron-pledges-property-dream-reality-1-3million-families.html

He will pledge discounts of up to 70 per cent to allow all 1.3million families in housing association properties to buy their home.

Maybe someone tipped him off that 30% isn't such a big amount in 2015.

Edited April 14, 2015 by billybong

[billybong]

From 2010.

[workingpoor]

I've got 8yrs worth of homebid points built up on the waiting list, its enough for

me to win any LHA/Council property i want to bid on.

I shall be logging onto the website tomorow and securing me one 'o these

bargains!

Might take a few years but its all money in the bank isnt it? I'll be a savvy investor!

With one eye on the equity pie!

[Roman Roady]

Perhaps they are selling at what they strongly suspect is the top if the market?

Looking to off load assets to the greater fools AND buying votes at the same time.

Luvly Gubbly.

[Ash4781]

Lol they (Tories) also promised to protect the green belt. I can't see the housing associations racing to replace the lost supply (look at the current council housing start numbers).

[spyguy]

Have you seen the state a lot of HAs finances are in?

More likely a bail out of the HAs.

[Ash4781]

Have you seen the state a lot of HAs finances are in?

More likely a bail out of the HAs.

Nope. Are they easy to find ? Always assumed they were some kind of inbetween private and public entity that collected rents, did maintenance, built the occasional house and paid staff salaries. Edited April 14, 2015 by Ash4781

[canbuywontbuy]

Does this mean the end of cheap rents to those most in need? i.e. the purpose of the Housing Association in the first place? And if so, does it mean the housing benefit bill will simply balloon in the coming years as more properties are moved to the private sector?

[winkie]

Does this mean the end of cheap rents to those most in need? i.e. the purpose of the Housing Association in the first place? And if so, does it mean the housing benefit bill will simply balloon in the coming years as more properties are moved to the private sector?

You are right, certain housing should be retained to be used by low paid workers and their families where the rents are affordable that is lower than private rents are......have you seen the large amounts of money that is paid to some tenants to leave, big enough to use as a deposit on a house......how is that right...

[Guest_northshore_*]

It depends on the price/value of the properties but for example 620,000 X £50,000 = £31 billion - and that's only 25% of all housing association tenants. Even spread over a few years that's a massive amount.

For all housing association tenants it's about £120 billion. If it's 70% off as reported in the mail link in the other HPC link then those figures are more than double - maybe the 70% off is a typo error. Apparently there might be a discount cap to consider as well.

They must have done their sums of course.

(£50,000 just used as a round figure assuming it's about 30% of the price)

Maybe someone tipped him off that 30% isn't such a big amount in 2015.

Apparently there are approx 500k tenants with previously had no right to buy at all: http://www.theguardian.com/politics/2015/apr/14/tory-election-manifesto-right-to-buy-housing-association-properties . Even just taking those numbers, and low estimates of average price £100k and 35% discount it's still a minimum potential £17.5 billion taxpayer gift. There are worse taxpayer gifts because at least someone gets a HPC, but blatantly in the 'own land - give them money' category because everybody knows the money will unnecessarily end up with rent seekers (landlords, bank lending, broad unearned capital gains).

[campervanman]

What could possibly go wrong? I mean selling off council houses didn't caused any shortage of affordable rented properties did it? It's not as if taxpayers are having to subsidise private rents because there are no longer enough social housing properties is it?

[MattW]

This is merely a regurgitation of Thatcher's policy from 35 years ago. Cameron cannot even come up with a more original way to attract traditional Labour, etc voters to vote Tory this time around. 35 years on, the British populous are now better aware of the legacy left by Right To Buy.

Despite myself being born into a council house later sold to my parents under the old RTB policy, I am dead against it. Aside from an eventual inheritance, the next generation have been kicked hard in terms of no longer being able to access social housing. I haven't come anywhere near an offer of a small flat (post 2000) and my older sisters had to wait some time for their offers (mid 1980s to early 1990s).

A better way around this will be to buld more homes of all sizes for owner occupation ONLY to those who qualify. Priority given to existing council/HA tenants, those on housing registers and those who have a houshold income of £x thousand a year. These homes are NEVER to be rented out on the private market and can only be sold at a capped threshold at the annual rate of inflation to other wannabe owner occupiers.

[SarahBell]

When compare the sheer cost of Housing benefit being thrown at private rentiers, and the low quality shit they provide, social housing has been the bargain of the century.

1/3 of those substandard homes are in the social housing sector.