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From the archive – housing association faces insolvency after leaseback deal

What was happening in the sector this week five, 15 and 25 years ago

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From the archive: housing association faced insolvency after leaseback deal #ukhousing

Remember when Labour promised to give social tenants the right to buy an equity share of their home months out from a general election? This and more in this week’s archive #ukhousing

From the archive: government embarrassed over Right to Buy replacements overcounting error #ukhousing

1995

The Housing Corporation was working on a deal to save a housing association that had got in trouble with a ‘leaseback’ financing arrangement (see cover, below).

The United Kingdom Housing Trust (UKHT) had struck the £200m deal with an arm of Sheffield Council in 1987 to build 4,000 social homes without grant funding on an estate in the city.

But it now owed £50m in repayments and was struggling to find the cash. There were fears the saga could result in a major rent increase for residents or the insolvency of the organisation.

Today, the housing association has merged into Places for People and the viability of leaseback funding remains a difficult issue for the sector.

2005

During his re-election campaign, Tony Blair promised to put housing at the centre of his campaign.

He visited a mixed-tenure estate in Battersea and gave a speech promising more help for first-time buyers and to boost homeownership by keeping interest rates low to ensure mortgages remained affordable.

Deputy prime minister John Prescott also gave more details on the government’s plan to give social housing tenants the ability to buy an equity share in their homes.

The National Housing Federation (NHF) said the emphasis on homeownership was “no surprise” and called for a broader focus in housing policy than simply boosting homeownership. Today, the government is again working to give tenants the chance to buy an equity share in their own home and the NHF is still calling for a broader policy focus.

2015

The government was forced to drastically revise figures on ‘replacement’ homes built for those sold under the revamped Right to Buy – reducing the figure from 4,795 to 2,712.

The error had occurred because councils had been including homes funded through other grant streams – not just the cash generated by Right to Buy sales.

Cornwall Council reduced its replacement figure from 1,081 to just 15.

Labour called the changes “embarrassing” and said they would result in the government missing its pledge to provide a replacement for every additional home sold within three years.

Five years on, the government has missed that pledge.

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