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Almos' scaled-up development reduces Right to Buy loss

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Council housing companies added almost 2,000 new properties to their stock in 2018, but this has only replaced 69% of homes sold under right-to-buy, a report out today has revealed. 

The survey by the National Federation of Almos (NFA), representing 31 council-owned housing companies managing 417,913 homes across England, shows a net loss of more than 800 properties over the last 12 months.

The chancellor Philip Hammond last month announced a £3bn scheme to fund 30,000 affordable homes. This, combined with the removal of the HRA borrowing cap and the rent increases being brought in next year, has encouraged Almos to focus on building up their housing portfolios, NFA said.

But the survey shows these changes are not enough to cushion the impact of Right to Buy on council housing stock. 

Although the sector acquired or built 1,949 homes last year, a rise of 38% on 2017, 2,813 homes were sold under Right to Buy, leading to a net loss of 864 properties. The net loss in 2017 was 1,761.

Responding to a government consultation on Right to Buy last year, the NFA asked for changes to enable councils to keep more of the money from receipts to buy new homes. The government is yet to respond to the consultation. 

NFA managing director Eamon McGoldrick warned: “Unless the government implements the flexibilities to the Right to Buy that we have been calling for, it is like a leaking bucket; the sector will continue to lose more council homes than it can replace.” 

The NFA said Almos plan to step up their development programme, with 1,801 new homes and 713 acquisitions planned. There are also plans to build 7,265 homes over the next five years, a figure which the NFA says may rise in light of the lifting of the borrowing cap. 

With government reforms such as the revitalisation of the Right to Buy in 2012 and the rollout of universal credit leading to high levels of rent arrears, the NFA says “it is quite an achievement that many of our members continued to build any new homes at all”. 

Due to the 1% rent decrease, the survey also shows that 17% of Almos have seen “a lot” or “significant” impact on their ability to maintain the decent homes standard, which has been seen as a minimum standard for Almos since 2002. 

“This has not stopped them working to maintain the decent homes standard in properties, but it has meant that many Almos have prioritised work, including recent fire safety related works, and reassessed their improvement programmes and new build programmes over the period,” the NFA stated.

Because the Decent Homes Standard programme is cyclical, the NFA says there will be rising levels of homes at risk of falling below the standard in the coming years, which will require a “gearing up” of investment programmes. 

 

 

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