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Right-to-buy could be extended to council company-built homes

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Affordable homes built by local authorities through housing companies could be subject to right-to-buy rules, while councils will be forced to use a government-imposed standard method to calculate local housing demand.

Communities secretary Sajid Javid will consult on requiring councils to produce a “realistic plan” to meet housing need, reviewed every five years.

In an interview with LGC, housing and planning minister Gavin Barwell denied measures such as this, published in the housing white paper today, meant the government had abandoned its localist approach.

In a section of the document called ‘Backing local authories to build’, the white paper said the government supported councils that had set up companies to build more homes but added: “However, we want to see tenants that local authorities place in new affordable properties offered equivalent terms to those in council housing, including a right to buy their home.” 

LGC research revealed last year that councils are increasingly looking to tackle housing shortages in their area by setting up companies to deliver new homes.

Lord Porter (Con), chair of the Local Government Association and leader of South Holland DC, which has a housing company, told LGC the government cannot extend the right-to-buy to private housing companies and warned: “The amount of aggravation they had extending the right-to-buy to [housing association] properties would be nothing with trying to do it across private companies.”

Lord Porter said councils would “just build to sell… if they are threatened with right-to-buy.”

John Bibby, chief executive of the Association of Retained Council Housing, said: “Most local housing companies have been set up to provide homes for market sale or private rent but some have a bit of affordable housing incidental to that and in those cases this could drive a coach and horses through their business plans.”

The white paper, entitled Fixing our Broken Housing Market, said the government wants a sharp increase in home building and is prepared to both assist councils that back development and intervene where they obstruct it.

This would include government support for councils that want to build homes – in particular through cheaper off-site construction methods – and possible use of government powers for flexibilities to drive bespoke housing deals with councils in high demand areas.

Mr Barwell told LGC that while movement on councils’ longstanding demand for easier borrowing against the housing revenue account was “difficult as it’s a fiscal matter”, there might be leeway in such deals.

Policy shifts in the paper included a ‘statement of common ground’, intended to be stronger than the present duty to co-operate imposed where councils cannot meet housing need in their area and need neighbours’ support.

Mr Barwell said this did not signal abandonment of the localist approach.

“I think it’s fair to say the duty to co-operate has not worked well in some parts of the country and needs to improve,” he said.

He denied that the white paper’s single passing reference to the new homes bonus meant this had been downgraded as a means to encourage acceptance of development.

The standard method for calculating housing need was also not a centralist measure he said, noting: “A number of councils have asked me to do this as they find themselves under pressure from both ends – residents and developers”. He said they would prefer the certainty of a government-approved method.

Other measures included using increased densities in urban areas – building higher where necessary – and a review of space standards.

Councils will gain powers to speed up housebuilding, requiring developers to start building within two years rather than three of planning permission being granted. Councils would be encouraged to use compulsory purchase to get development under way on such stalled sites and builders’ records on speed of delivery could be a factor when planning applications are decided.

Despite previously saying he would back councils “all the way” if they had robust plans for greenbelt development, communities secretary Sajid Javid said protections will remain, with changes permitted only in exceptional cases. There would be a presumption in favour of housing on brownfield land.

A 20% increase in nationally set planning fees for councils will be offered if they invest the money raised in thier planning departments, with a possible further 20% for those delivering homes according to their plans.

He also held out the prospect of a fee to discourage developers from making unreasonable appeals where councils reject an application.

But Mr Javid proposed to use powers to prohibit planning conditions that do not meet the national policy tests.

LGA housing spokesman Martin Tett (Con) said councils needed more powers including keeping 100% of receipts from right-to-buy sales.

Jo Miller, president of the Society of Local Authority Chief Executives & Senior Managers, said: “Local Authorities are best placed to meet the national housing challenge and it is vital that they are given the powers and appropriate long-term funding streams to deliver homes.”

Housing White Paper key points

* Consultation on a standard methodology for councils to assess local need for homes

* Government intervention to ensure local plans are in place

* New housing delivery test to ensure councils deliver homes to plans

* 20% increase in planning fees for councils to invest in planning departments, possible further 20% for those delivering homes according to plans

* Where councils cannot satisfy housing demand, introduction of a statement of common ground on how neighbours will meet demand across boundaries

* Possible bespoke housing deals with councils in high demand areas

* introduction of locally accountable new town development corporations

* Possible fee to discourage unreasonable planning appeals

* Government power to prohibit planning conditions that do not meet the national policy tests

* Developers to have two years rather than three to begin building once permission is given

* Councils encouraged to use compulsory purchase powers to build out such stalled sites

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Readers' comments (1)

  • I am no expert on RTB, but what incentive is there for a council to build affordable housing, be it through a company or not, if RTB applies, as yet more affordable housing will then need to be built?

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