The Week in Housing: the things that were wrong with the Right to Buy changes
A weekly round-up of the most important headlines for housing professionals
Good afternoon.
We are going back a little bit further than we usually do for this Week in Housing. Arguably the biggest story for the social housing sector this week actually came to light in the final hours of last week.
Snuck out late on Friday afternoon, as so many housing-related releases seem to have been of late, was an announcement from government about a raft of changes to the way Right to Buy works, and how councils can use receipts. It came after nearly three years since the original consultation closed.
At face value, the changes seem helpful for councils: the time councils have to spend receipts has been extended from three years to five, and the percentage cap on how much of a receipt councils can use for new homes has risen from 30% to 40%.
However, while many in the council housing space welcomed the changes, the majority saw it as a missed opportunity. This was summed up by Chloe Fletcher, policy lead at the National Federation of ALMOs, who said that a braver approach could have made the Right to Buy policy more sustainable and equitable to those buying homes. Included in this was the point that while the cap was raised to 40%, the majority of councils needed it to be at least 50% to build social rent homes. She also called for an extension of the cost floor mechanism to 30 years.
There were also concerns about a new rule that would see councils being able to use the receipts for shared ownership or First Homes, with some saying that at a time when there is such a shortage of social rent, this was unnecessary.
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Elsewhere in local authority news, the government confirmed that it would be sending commissioners to oversee the running of Liverpool City Council after the government said that inspectors found a “serious breakdown of governance” and “multiple apparent failures”.
It came off the back of a highly critical independent report into the authority, which highlighted a number of issues. Included in this was a focus on the council’s housing strategy, where weaknesses in the council’s housing company, Liverpool Foundation Homes, were identified.
The report said that if the company, which is now being wound down, continued in its current form, the accumulation of funded debt based on highly marginal schemes, not forecast to come good for many years, would have presented major problems.
Other big stories this week included Lucie Heath’s scoop uncovering yet another huge issue to come out of the current building safety crisis. Speaking to several shared owners, she found that many face having to pay thousands on top of remediation costs to extend their leases, which are losing value due to market delays caused by the cladding crisis. Many said they felt like they were being treated like “cash cows” by their housing associations.
And L&Q announced that it will cut its yearly development plans by 70% because of increasing fire safety costs. The details emerged in an interview with the association’s new chief executive, Fiona Fletcher-Smith, earlier this week.
There was also the news that Croydon Council is carrying out an urgent review of its high-rise homes after an ITV exposé revealed the terrible conditions that some tenants are living in, including walls entirely covered in black mould. Some residents said they had been complaining to the Labour-led council for more than a year.
And finally, the administrators report for WPHV, Wilmott Dixon’s former housing subsidiary, came out this week. It revealed a list of more than 700 creditors. Importantly, this included details that there were 12 housing associations and three councils listed as contingent creditors, while the company had 18 projects in which claims have been commenced against WPHV in relation to defects.
Jack Simpson, news editor
Editor’s picks: five must-read stories
- Shared owners unable to sell flats face having to pay thousands for lease extensions
- Major housing associations listed as creditors in Willmott Dixon subsidiary administration
- Meet L&Q’s new chief executive: ‘We will still build. But the emphasis is on existing residents’
- Council carrying out urgent review of high-rise blocks after ‘appalling’ conditions exposed
- Non-compliant exempt accommodation provider self-referred after resident murder
