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Mayor hands £383,000 of unspent housing association Right to Buy pilot grant back to government
The Greater London Authority (GLA) has handed back £383,000 of unused government grant intended to fund sales through a legacy Voluntary Right to Buy (VRTB) pilot.
Inside Housing has been told that the money went unspent after a handful of purchases by L&Q tenants did not complete in time for the deadline of the pilot, which ended in 2017.
Spending data published by the Ministry of Housing, Communities and Local Government (MHCLG) shows that a £382,613 payment made to the department by the GLA in August 2019 under the heading “Voluntary Right to Buy Payment Recovery”.
The GLA said the transaction “relates to the pilot L&Q VRTB programme in London where there was a balance of unused grant sitting in the GLA’s bank account”.
“We were expecting a few more cases to go forward under this programme but in the end they didn’t materialise,” it added.
The VRTB – which extends the Right to Buy to housing association tenants – has been official government policy since 2015 but it is still being piloted.
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L&Q was one of five housing associations to run small-scale VRTB pilots launched in October 2015, operating the project across eight London boroughs.
The 95,000-home landlord said that the length of time required to evaluate and process expressions of interest from tenants through the pilot meant a small number of sales had not completed conveyancing in time for the deadline. The programme closed in January 2017.
That meant that it did not use its full allocation of grant, which was intended to pay for the discounts available through the VRTB scheme. Housing grant in London is administered by the GLA.
Demand for the 2015 VRTB pilots was lower than expected, while many interested tenants in London were unable to afford to buy their home even with the £100,000 discounts on offer.
A large-scale regional VRTB pilot is currently running in the Midlands, with demand from tenants also lower than expected.
The Conservative manifesto promised to “maintain” the VRTB scheme and “evaluate new pilot areas”.
The government has also confirmed that it intends to push ahead with plans to introduce a shared ownership Right to Buy for housing association tenants, announced ahead of the election but omitted from the Tory manifesto.
MHCLG did not respond to requests for comment.
The Voluntary Right to Buy explained
- Discounts for eligible HA tenants are at the same rates as local authority tenants in the statutory Right to Buy scheme (between 35 and 70 per cent of the value of the property, to a maximum of £80,900 – whichever figure is lower)
- Eligibility is determined by the government, with discounts funded by the government’s £200m pilot scheme
- HA boards have the final decision over which homes to sell, with the presumption that they will sell a tenant their current home if possible
- Where they decided not to do so, the government compensates HAs to apply the discount to an alternative property – known as ‘porting’
- ‘Flexible one-for-one’ replacements are incorporated, meaning for every Voluntary Right to Buy sale, a new affordable property will be built – overall, meaning some HAs will replace at a ratio greater than, and some lower than, 1:1
