Charlotte Cook – Partner REACTING TO NEW CHALLENGES RECENT CHANGES IN SOCIAL HOUSING POLICY 11 MARCH 2016

Introduction 24DASH – David Orr interview, 07/09/2015: “This period of change is unprecedented in my career… And we would be wrong to think the time of change is over.”

Housing and Planning Bill - in the House of Lords Spending Review – 2 November 2015 Welfare Reform and Work Bill- “Ping Pong” Timeline

1. Rent Cuts 2. Pay to Stay 3. Right to Buy 4. Universal Credit 5. De-classification and De-regulation 6. Planning and Development Agenda

General Needs RPs will be forced to cut their rents by 1% a year for four years starting 1 April 2016 Cumulatively 12% reductions over four years Exclusions/Exemptions: – Shared Ownership; – Mortgagees in Possession; or – where it would “jeopardise the financial viability of the RP” Rent Cuts I

Supported Housing Exempt for 12 months “while a review is carried out” What housing is covered? includes: sheltered accommodation for older people extra care housing almshouses as well as: “specialised housing” high level of support no/negligible public subsidy commissioned in line with local health, social services or strategies Rent Cuts II

Effect on providers? o revise business plans o asset cover in loan agreements o delivery of new homes? o lender confidence o staffing o continued existence UNCERTAINTY Rent Cuts III

Any households in social rented accommodation earning £30k+ (rest of England) or £40k+ (London) 10% of social housing tenants affected Tenants required to declare their incomes Incremental increase in rent from April 2017 Councils are required to pay the additional rental income to the Treasury. RPs keep the extra rent Pay to Stay I

The Observer climb down in advance of EU referendum House of Lords cross-party attack Softer increases Pay to Stay II

Extension of Right to Buy to HA Sector 2016?1980s

2m+ have used the policy to buy their home since introduction in the 1980s Right to Buy vs Right to Acquire? Right to Buy extension – current position? Right to BuyRight to Acquire EligibilityCouncil tenants with secure or flexible tenancy who have held a public sector tenancy for at least 3 years Secure tenants of non-charitable housing associations (i.e. tenancies pre-1989) Housing Association tenants living in a property built or bought by the housing association after (i.e. when the legislation came into force as it was not retrospective) and funded through a public sector social housing grant; who have held a public sector tenancy for at least 3 years Exempt Persons Tenants subject to bankruptcy proceedings, unfulfilled credit arrangements or anti-social behaviour orders As for Right to Buy Family Members Up to 3 family members can join in the purchase with the tenant As for Right to Buy Amount of Discount Maximum £77,900 (£103,900 in London)£9-£16k according to region House discount is accrued Freehold: 35% for 3, 4 and 5 years tenancy, then increasing by 1% each year to 70% maximum. Leasehold: 50% for 3, 4 and 5 years tenancy, then increasing by 1% each year to 70% maximum Flat rate discount of £9k to £16k according to region

2015: Conservative Party manifesto commitment : NHF offer to extend voluntarily. Why? - avoid reclassification? For goodwill? - going to happen anyway so able to set conditions:(1) full market value compensation for the discount; (2) exclusion of certain properties; and (3) deregulation : HAs vote in favour of voluntary offer (after 6 days to consider). Government accepts. Right to Buy extension – background?

L & Q; Riverside; Saffron Housing; Sovereign; TVHA Joint Applications: partner or up to 3 family Up to 1.3m HA tenants eligible in England Right to Buy – piloting the scheme

Right to Buy extension – some questions Mechanics: implementation, compensation, enforcement, protections? Extent of application –what properties will be excluded? Funding the discount? Impact on existing documents? Porting the discount? Will receipts from the sale of council properties be ring-fenced? How popular will it be?

What is Universal Credit? Who will it be paid to and how? The “roll-out” period How does Universal Credit affect RPs? – Housing benefit paid to tenant and not to landlord – Risk of arrears and evictions – Administrative cost of rent collection – IT problems Protection mechanisms for landlords Universal Credit

Private non-financial corporations  Public non-financial corporations Decision: 30 October 2015 Effective from: 22 July 2008 Cause: Too much public sector control Effect: Added approximately £63bn in public sector net debt (4% increase). Declassification

Public Land available to public sector agencies 40 day window to bid before go to the market e- PIMS BUT Statistical change not a legal one Market impact Get your skates on

What next? Deregulation Timescale: under 2 years Special administration regime s172 consent regime likely to change Deregulation

“Planning in principle” Starter Homes Initiatives…the new “affordable housing” Buy to Let – 3% additional SDLT Neighbourhood planning Administration regime changes Planning and Development

Early days? Or the end of the road… Confidence for straight talking in Lords What Next?

Thank You Charlotte Cook Partner Solicitors and Parliamentary Agents Minerva House 5 Montague Close London SE1 9BB DX London Bridge 6 T F