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MHCLG suggests ‘drive-by’ Right to Buy valuations during pandemic
The government has suggested councils carry out “drive-by” Right to Buy valuations in order to keep the scheme running during the coronavirus pandemic.
Local authorities in England have been told that the statutory timescales for handling Right to Buy applications still apply despite the crisis.
Part of the sales process typically involves a physical visit to the home to assess its value, including work paid for by the tenant. But social distancing guidelines intended to limit the spread of COVID-19 currently render these visits impossible in most cases.
Ministry of Housing, Communities and Local Government (MHCLG) officials have suggested that “drive-by” valuations or desktop calculations based on similar properties while taking tenants’ word for the value of works done could be done instead.
Council figures argued that this approach would not be a responsible way of managing assets, while Inside Housing understands that some mortgage lenders have rejected drive-by or desktop valuations.
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The Right to Buy allows council tenants to purchase their homes at discounts of up to £112,300.
Around 80,000 homes have been sold off through the policy between 2012 – when the discounts available were significantly hiked – and 2019.
Official figures on Right to Buy sales since the coronavirus outbreak hit in March have not yet been published, but anecdotally councils are reporting a significant drop in applications in the past two months.
Eamon McGoldrick, managing director of the National Federation of ALMOs, said: “We’ve been told categorically by MHCLG that the statutory timescales still stand – they are very clear on that.
“But the problem you get is the visit to do the valuation. If a tenant has put in their own central heating, you have to make allowance in the price – you might take off £2,000 for instance.
“There was a suggestion you could do a drive-by valuation, or a desktop calculation taking the tenants’ word for it, but we said to MHCLG that is not a good way to financially manage assets.”
John Bibby, chief executive of the Association of Retained Council Housing, said: “Because of the statutory timescales involved in processing Right to Buy applications and social distancing rules, councils are having to find ways around carrying out the valuations, with the practicalities of home visits clearly much more difficult.
“It’s not ideal by any means, from anyone’s perspective. The ideal would be some recognition of these challenges from government, but the timescales are set in primary legislation which MHCLG have been unable to amend.”
He added that some councils have reported difficulties in meeting the Right to Buy timescales, but that applications also appear to be dropping off as some tenants have withdrawn their enquiries until after the lockdown.
An MHCLG source said the government understands that coronavirus measures “are likely to make it challenging for councils to process Right to Buy applications within the statutory timescales” and said it is working with social landlords “to understand and mitigate any impact on the process, including valuations”.
“While tenants who want to buy their home should be able to within a reasonable timescale, it is vital that everyone – including social landlords – follows government guidance on the coronavirus,” the source added.
Northern Ireland’s housing authority has suspended the Right to Buy amid the pandemic. The policy has been abolished by the Scottish and Welsh governments.
Last month, the Local Government Association called on ministers to lengthen the time councils have to spend money raised through Right to Buy sales before they must hand it back to the Treasury.
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