Housing Associations: Right to Buy

Baroness Williams of Trafford Excerpts

Tuesday 9th June 2015 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)]

My Lords, Ministers and senior officials in my department already engage with the housing association sector, local authorities and other key stakeholders, as they do on a continuous basis in relation to key policy issues.

[Baroness Gardner of Parkes (Con)]

Is the Minister aware of the very difficult position of some of those who bought their council flats in the early days, about 30 years ago, for about £10,000 and now find themselves as leaseholders with no income but a small—well, it is not that small—state pension? They now receive bills for more than £12,000 as part of their contribution towards the block. I understand that there are 24 such cases in one estate. How widespread is this situation, and what do the Government intend to do to avoid a similar situation arising if housing-association properties are sold in the same way?

[Baroness Williams of Trafford]

My Lords, I recognise the problem that my noble friend talks about. Recognising the challenges that these leaseholders face, my department introduced a new law in August 2014 that caps the amount that councils can charge leaseholders for repairs to their home. This is called “Flo’s law”. It limits the amount that can be claimed by councils from local-authority leaseholders in a five-year period to £10,000 outside London and £15,000 inside London for government-funded works.

[Baroness Hollis of Heigham (Lab)]

My Lords, I declare an interest as chair of Broadland Housing Association. Housing associations are mostly charities. As the chair of Peabody said:

“Peabody’s assets belong to us. They are not the government’s to sell”.

Does the Minister not agree that the forced sale of charitable assets at knock-down prices damages the housing chances of those desperate and on the waiting list, damages rural communities, damages the stability of housing finance and damages the very concept of a charity, what it does and why it even exists?

[Baroness Williams of Trafford]

My Lords, this is not about seizing the assets of housing associations. The right to acquire currently operates on the basis that receipts from homes sold enable housing associations to reinvest in new affordable housing.

[Lord Best (CB)]

My Lords, in carrying out the consultation that she has mentioned, would the Minister include the Institute for Fiscal Studies, along with commentators in the Economist, the Telegraph, the Times and the Financial Times, which have all pointed out the very grave consequences if this unfortunate policy is pursued?

[Baroness Williams of Trafford]

My Lords, the Government, and in particular my honourable friend in the other place, the Minister, Brandon Lewis, are already leading the engagement with the sector on our housing commitments, as set out in our manifesto, and are happy to meet Members of this House and others.

[Lord Shipley (LD)]

My Lords, what guarantee will the Government give that they will replace houses sold on a one-for-one basis, given that, in the previous sale of council houses, only one house has been built for every 10 sold?

[Baroness Williams of Trafford]

My Lords, the Government can go on their record on this, which is that under the coalition Government more council homes were built than in the previous 13 years. Also, if the new revitalised scheme does not yield that one-for-one replacement within a three-year period—the one-in-10 figure is actually quite misleading, because we are only at the end of the first three-year period of the first council home sold—the HCA will take on those properties and sell them.

[Lord Cormack (Con)]

My Lords, how are we going to increase the supply of affordable housing, which is desperately needed, by selling some of the most affordable houses at very great discounts?

[Baroness Williams of Trafford]

My Lords, when affordable houses are sold, the discount to date is then refunded back to the housing association by the Government. As for replacing affordable with affordable, that capital receipt allows a new similar home to be built.

[Lord Richard (Lab)]

My Lords, the Minister said that the Government are already consulting housing associations on this policy. Has she found any housing association that approves of it?

[Baroness Williams of Trafford]

My Lords, I have said that the Minister in the other place, Brandon Lewis, is engaging with the sector. I have not had any personal engagement with the sector, but I am very happy to report back.

[The Lord Bishop of Rochester]

My Lords, I am grateful to the Minister for confirming that intention to consult the sector. Is she able to offer any indication of how Her Majesty’s Government propose to implement this right to buy in relation to housing-association properties in small and rural communities, where such housing is often built on rural exception sites defined in the National Planning Policy Framework as intended,

“for affordable housing in perpetuity”?

[Baroness Williams of Trafford]

The right reverend Prelate is absolutely correct when he says that rural communities are different. The development of that particular policy is ongoing, and details will be set out in due course.

[Lord Naseby (Con)]

My Lords—

--- Later in debate ---

[Lord Spicer]

How many empty dwellings are there these days? When I was Minister for Housing, there used to be one million. Should not some of those be sold off, if appropriate?

[Baroness Williams of Trafford]

My Lords, we have significantly dealt with the issue of empty properties. I shall get my noble friend the exact figures on the number of empty properties that have been brought back into use, but I can confirm to him that it is significant.

[Baroness Howarth of Breckland (CB)]

My Lords, many of the houses developed through specialist housing associations have very expensive adaptations, many of them paid for by charitable donations and donors. Does the Minister not think that this is an area where there might be some protection to ensure that these houses move on to other severely disabled people when they are vacated?

[Baroness Williams of Trafford]

My Lords, I am sure the intention in this area will be set out in due course.