Housing & Planning Act What next? John Bibby ARCH CEO

Conservative Manifesto “We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes” “ We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant”

Summer Budget 2015 A number of surprises for stock retained councils that were not in the Conservative Manifesto: The announcement that rents in the social rented sector will be reduced by 1% per year for the next 4 years The compulsory introduction of “pay to stay” requiring higher income social housing tenants to pay market rents and for councils to handover to the exchequer the additional rents collected A review of the use of lifetime tenancies in social housing “to limit their use and ensure households are offered tenancies that match their needs and ensure best use is made of social housing.

Housing & Planning Act 2016 Introduced October 2015 Royal Assent May 2016 Part 4 Social Housing HVA levy Higher Value definition Pay to Stay Fixed term tenancies Regulations, Determinations, Guidance Expected July – still waiting Higher Value & Pay to Stay Regs subject to “affirmative resolution” Brexit & change of Government “Re-setting” of economic (and social?) policy New ministerial teams at DCLG and Treasury

Sale of Higher Value Assets Housing & Planning Bill introduced on 13 October 2015: Duty on any council that keeps a HRA: “must consider selling its interest in any “high value” housing that has become vacant” (NB redefined by amendment as “higher value”) Secretary of State “may make a determination requiring a local authority in England to make a payment in respect of a financial year” (The HVA Levy) This payment must represent the market value of the council’s interest in any high value housing that is likely to become vacant Allowed costs and deductions to be made from payments (transaction costs, outstanding debt on property) In addition Secretary of State can make “Agreements” with councils to enable them to retain a portion of capital receipts from sale of HVA to fund delivery of additional homes to replace those sold

Sale of Higher Value Assets Next steps: Publication of Regulations defining “Higher Value” – only then will councils know which (and how many) council properties they will have to consider selling. Regulations setting out exclusions (sheltered housing, adapted housing, rural housing?) Consultations before issuing a “Determination” setting out the formula for calculation of the HVA Levy for each council Process for making Agreements between councils and SoS for retention of capital receipts 1 for 1 replacements (2 for 1 in London) Process for payment of the HVA Levy (expected to be quarterly)

Secure tenancies & succession Prevents councils from offering new tenants lifetime tenancies. Instead, councils must grant tenancies with a fixed term  of 2 to 10 years  or, if notify that child under 9 - up to time child turns 19 Power to issue statutory guidance on length of tenancies to which councils must have regard Guidance likely to say:  5 year tenancies the norm  Less than 5 years in exceptional circumstances  Longer than 5 years for tenants with longer term needs (e.g. older people and those with disabilities)

Secure tenancies & succession Next Steps Regulations to determine whether existing lifetime tenants may get further lifetime tenancy Guidance on length of tenancies, end of tenancy review, and succession Working group to develop the regulations and guidance Commencement order Timetable April 2017?

Pay to Stay Government reasons for the policy: Fairness: lower social rents should be focused on those most in housing need - people on higher incomes should contribute a fairer rent for their council property Homeownership; tenants who can afford to buy their own home should think about RTB or Help to Buy Revenue raising Lords forced amendment - additional rent will be tapered at 15% of income over the threshold, or the market rent – whichever is lower. For every £1000 of income over the threshold households will pay an extra £2.88 per week in rent (capped at market rent).

Pay to Stay Next Steps: Draft Regulations published May be shared with LA’s but not subject to formal consultation Regulations subject to affirmative procedure Higher rents to apply from April – DCLG officials recognise this is challenging!!!!

What has ARCH been doing? Lobbying on Bill: meetings with DCLG officials (Brandon Lewis declined meetings) Meetings with Lords & opposition members Post Act: Meetings with DCLG officials Jointly with NFA & CWAG DCLG presentations to ARCH/NFA member event July DCLG officials presentations to ARCH Tenant Conference Sept Post Brexit: Meeting arranged with Gavin Barwell (12 October) Making the case for investment in council housing CIH/CIPFA Report Update to Capital Economics report for Shout/NFA June 15 Autumn Statement 23 November – deadline for submissions 7 October

What has ARCH been doing? Part 4 of the H&P Act: Still a lot to play for Regulations subject to affirmative resolution Opportunity for further lobbying in Parliament Definition of “higher Value” and higher value thresholds Guard against simply defining the most valuable 30% of an authority’s stock as higher value Admin costs Higher value sales threshold v cost of replacement where net benefit from sale and replacement would be insignificant Replacement agreements Flexibility with reinvigorated RTB replacement agreements Argue for higher than the current 30% contribution in light of rent reductions etc.

What has ARCH been doing? Housing to be taken into account in HVA levy: The case for exclusion of voids arising in Newly constructed dwellings Regeneration schemes Rural housing (National Parks & Areas of outstanding natural beauty) Supported housing Adapted housing Transfers Pay to Stay The case for Delay in implementation (April 17 deadline impossible) Formula for administration costs Exclusion of authorities where market rents are close to or only marginally above social rents and/or additional rental income likely to be less than or only marginally above cost of administration. Retention of income locally for housing investment

What has ARCH been doing? Seeking evidence of costs v income (e.g. Sheffield): 40,116 tenancies – 13,811 not in receipt of HB 931 estimated to have household income> £31k Estimated additional rent: £1,116,000 Estimated admin costs: £939,000 Treasury yield £177,000 (exc arrears) Lifetime tenancies The case for the scheme to remain discretionary Homelessness Rise in homelessness as social lettings diminish Cost of temporary accommodation What does Part 3 of the NHF voluntary agreement really mean?

Government agenda post Brexit New Ministerial team at DCLG & Treasury Chancellor Hammond “Re-setting of economic policy” – Osborne’s deficit reduction target by end of Parliament abandoned. Housing growth: Autumn Statement key (suggestion of a Housing White Paper?) Council’s need to make the case for investment in social housing and show they can deliver. “The truth is we need more homes for sale, more homes for private rent and more sub-market homes for rent” (Gavin Barwell MP – NHF Conference 19/09/16) V …….. But what if any additional resources are allocated to private registered providers at the exclusion of local authorities? What will that do for the already fractured relations between LA’s & HA’s as a result of the voluntary deal?

Contact… John Bibby CEO ARCH Tel: