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Hastoe and the voluntary offer

Why Hastoe will be saying ‘no’ to the proposed voluntary offer on the extended Right to Buy (RTB) 
I have been busy over the past few days liaising with Hastoe Board members about this offer. Quite a few themes have emerged, which will sit behind Hastoe’s decision to vote ‘no’. These are as much about the areas of silence in the offer than what it contains.

One Board member has said: “From my own experiences in business, pressurised decisions taken under forced deadlines will almost always be flawed and should be resisted.”

We recognise that it is often necessary to take quick decisions but there has been no explanation put forward about why this decision has to be made within a week.

It is also hard to understand how this assertion can work: “This offer would provide a significant increase to the supply of new homes in England by ensuring that every home sold is replaced with a new property”. To achieve this, replacement homes would have to be instantly available and more homes would have to be built than were sold.

There are five other reasons for our response:

1. The negotiations have been based on the existence of two ‘threats’:
a)  That otherwise the Government will introduce the extended RTB in the forthcoming Housing Bill, possibly with more unattractive terms than in the current offer.  But – the passage of the Bill through parliament provides the opportunity for a full debate on the pros and cons and we can be confident that the rural perspective will be given full consideration, especially by rural MPs and Peers.

Using the Regulatory Framework instead of legislation makes this, to all intents and purposes, obligatory for us but provides the government with more flexibility about changing the rules. For example, next year, the government may change its mind about who funds the discount and all it would have to do is amend the Regulatory Framework.

b) That the risk of Housing Associations being considered to be public bodies is increased if the RTB is included in the Housing Bill.
This threat is the ‘elephant in the room’. It could be argued that our Federation should be prioritising this issue, so that we can know whether the threat is real or not. If not, then it loses its power but, if it is likely, then we should understand the implications and move on to our new future as public bodies.

2. The Rural Exemptions are voluntary

Housing associations that are not rural specialists may prioritise their rural homes for the RTB because they are high value, very saleable and often away from their management bases.
In a village with more than one housing association landlord, some tenants would be eligible for the RTB and others not. This is not only unfair, but there is no doubt that this inconsistent approach and the voluntary nature of the offer would deter landowners and communities from bringing forward new schemes. We are already finding our landowners and communities backing off housing projects that we have been discussing with them for some time.
3. The very low proportion of affordable housing in rural communities

Now (8% compared to 20% in urban areas) this will decrease further. Apart from the small number of rural specialists, it is likely that replacement homes would be built as part of a larger development elsewhere in the country as this is likely to be quicker and cheaper.
The portable discount is an attractive offer – but can only be used to buy another housing association home. So, in a village, this simply serves to deplete further the very limited supply.

4. The retention of the 30% discount will act against new homes being built in rural communities

The offer states: ‘For housing associations who do not build replacements, we want to ensure you receive the full 100% discount over time’. This is clearly unresolved.  What if a housing provider was not able to deliver replacement homes because, for example, landowners and/or the community were nervous about the RTB? There is a real risk that our 30% could be diverted to another association to use to build a home elsewhere in the country.

5. The definition of rural (Section 17 of the Housing Act 1996)

It was precisely to avoid this, and other poor definitions, being used, that we worked with others in the rural sector to submit to Greg Clark a more universally understood and workable definition.

The 1996 definition only covers about 20% of parishes in England. Local authorities have to apply to the Secretary of State to add a community to the list and we have a number of reports of this process being near impossible, with reports of no response from the Secretary of State to repeated requests over many years.

On a lighter note – we think there may be a typo here! The text states that the definition of rural would include areas with fewer than 3,000 inhabitants per hectare (about 2.5 acres). So, about 1,200 people per acre. I don’t know for certain but reckon that this is probably the whole of the UK!

Sue Chalkley
Chief Executive, Hastoe Housing Group