The DCLG has issued their assessment of the impact of policies and
proposals set out in the Housing and Planning Bill 2015.
Stock retained councils will be particularly interested in the
government's assessment of the impact of the proposals in the Bill
to force the sale of high value council housing and introduce a
mandatory 'pay to stay' scheme for higher earning tenants.
The impact assessment of clauses 74-83 of the Bill (the
introduction of the mandatory 'pay to stay' scheme and mandatory
rents for higher income social housing tenants estimates that:
- There are currently 350,000 council and housing association
tenants with household earnings above £30,000 who would be required
to pay a market or near market rent
- The number of tenants affected is expected to rise further by
April 2017 (the date of the planned introduction) because of rises
in the National Minimum Wage/National Living Wage and wage rises
generally. The caseload (number of tenants affected) by 2017/18 is
estimated to be:
- 200,000 council tenants; and
- 240,000 housing association tenants
- The government estimate that by 2020/21 the cost of
administering a mandatory 'pay to stay' scheme will be around
£28million per year with a further £45million in transitional
costs; and
- Council and housing association tenants affected will be paying
an additional £1.05billion per year in rent:
- Council tenants will be paying an extra £510million in rent
which will be paid over to central government
- Housing association tenants will be paying an extra £540million
to their landlord which associations will be able to keep to
reinvest in new housing.
The Impact Assessment of clauses 62-72 of the Bill (sale of
vacant high value council housing and payments to Secretary of
State) is fairly scant:
- Claiming that as the policy relates to sale of high value
housing "it does not impact on existing tenants" although it does
recognise there "will be an impact on the total stock available
while more housing is delivered" (without specifically mentioning
one for one replacement of any stock sold) but fails to quantify
this impact
- The Impact Assessment recognises that the policy "could impact
on prospective new council tenants or tenants wishing to transfer
to a new council home" but makes no attempt to quantify the impact
and reduction in local authority lettings available over the 2/3
year period it is likely to take "to build more homes which reflect
housing need" to replace the homes sold or the potential increase
in council housing waiting lists and use and length of stay in
temporary accommodation for homeless households as a result of the
reduction in local authority lettings as vacant property is
sold
- There is no assessment of the impact of lost rental income that
will be incurred as a result of the forced sale of high value
council housing
- The Impact Assessment claims stock retained councils "are not
benefitting from their high value vacant assets as money is tied up
in existing housing" and that the policy "will release the value of
such assets to use in providing more housing" but the Impact
Assessment makes no attempt to quantify the cost of one for one
replacement, relative to the net capital receipt likely to be
achieved after costs of sale, repayment of outstanding debt and
lost rental income (pending completion of the promised one for one
replacement) have been factored in.
The Impact Assessment also addresses the other significant
proposals in the Housing and Planning Bill including the
government's proposals for starter homes, reform of planning in
England as well as the implementation of Right to Buy on a
voluntary basis and proposals to reduce regulation on housing
associations although it says very little in respect of the
latter.
Click here for a copy of the Housing
and Planning Bill and the full DCLG Impact Assessment.