The Government has announced a delay to the introduction of Voluntary Right to Buy (VRTB). It was initially planned to commence by the end of 2016 but resistance from Councils to selling their properties has meant that the funding is not available. The mechanism for repaying housing associations for agreeing to allow VRTB was via Councils selling off their high value properties. However, with no reported sales to date the Government has been left with no funds in place. The intention is to now roll out VRTB in April 2018.
The Housing and Planning Act 2016 provides for Councils to “consider selling” its higher value assets. It’s unclear how many Councils have considered this, but certainly none have gone through with the sale. Hilary Davies of the Department for Communities and Local Government stated at the Smaller Housing Association conference that the Government may look at alternative funding measures if Councils don’t sell higher value properties.
The VRTB was signed up to by housing associations on the basis that the discount was fully funded. There is a currently a pilot VRTB scheme underway with five housing associations reporting on their experiences at regular intervals.
With the change in leadership in the Government, the impact of the vote to leave the EU and a seemingly genuine intent by the government to increase the provision of social housing that VRTB has been allow to fall by the wayside.
This delay means that there is further uncertainty for housing associations who will have to re-appraise their business plans. Further, any systems that have been implemented may have to be put on hold. However, councils are likely to be pleased to see that an unpopular funding mechanism may now be reviewed by the Government. The net loser in this situation are those tenants who had been hoping to buy their home for the first time and there is no clear indication of whether this opportunity will come around again.
Posted on 15/12/2016 in Legal UpdatesBack to Knowledge