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VRTB pilot: more than half of tenants drop out after ballot

More than half the tenants successful in the ballot for the Midlands Voluntary Right to Buy (VRTB) pilot have failed to apply to buy their home or have had their application cancelled.

 

 

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VRTB pilot: more than half of tenants drop out after ballot #ukhousing

A Freedom of Information Act (FOIA) response, seen by Inside Housing, found that of the 6,000 to get through the ballot, 3,174 are either yet to approach their housing association or have not continued with their application.

Exactly 6,000 unique reference numbers (URNs) were allocated following the ballot, which ran for a month between August and September last year.

But figures released by Homes England reveal that seven months after the ballot closed, 2,262 of the tenants awarded a URN are still yet to submit an application form to their housing association about using the Right to Buy.

A further 912 have had their applications cancelled since submitting a form as of the end of April, either by their landlord or of their own accord.

That leaves 2,826 applications currently open on Homes England’s database.


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This means that even if every single one of these tenants completes a purchase by the spring 2020 deadline, the pilot will not hit the 3,000 sales anticipated by the government unless more people with an unused URN apply at this late stage.

Indicators show that the number of new applicants is falling below the number of potential buyers leaving the process.

Between 4 March and 30 April, 158 new applications were submitted, but 366 applications were terminated in the same period.

The figures were obtained using FOIA laws by a housing association tenant who was one of 3,146 unsuccessful VRTB ballot applicants.

The Ministry of Housing, Communities and Local Government (MHCLG) said the figures are “provisional estimates only” as they depend on housing associations inputting the data into Homes England’s IT system.

It added: “This pilot is giving thousands of tenants in the Midlands the opportunity to realise their dream of homeownership.”

Inside Housing has previously reported on the unexpectedly low take-up of the £200m pilot, which had been heavily anticipated ever since the Conservatives announced its intention to extend the Right to Buy to housing associations in 2015.

Speaking to Inside Housing last month, Lindsey Williams, chief executive of Futures Housing Group, said that some tenants didn’t contact them after securing a URN because they couldn’t afford to get their mortgage.

It is understood that MHCLG is considering a second ballot in the pilot as a result of low demand.

Many tenants have been reluctant to ‘port’ their VRTB discounts to purchase another home if their own is exempt and others were unable to afford a mortgage.

Tenants were not made to demonstrate they could afford a mortgage when applying for the ballot.

The Homes England figures show that VRTB applications have been submitted to 46 housing associations across the Midlands.

Midland Heart has received the most with 436, followed by Orbit with 380, and 294 for Stonewater, including cancelled applications.

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
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