After careful consideration, we’ve signed up to the National Housing Federation and the government’s proposal to voluntarily extend the Right to Buy to our residents.
As well as helping people buy their own home, the new deal, which was confirmed by David Cameron yesterday, will give us the flexibility we need to build much-needed new and affordable homes.
The deal was proposed at the NHF conference last month, where Greg Clark MP and the NHF’s David Orr suggested that associations work with government to implement the Right to Buy on a voluntary rather than a statutory basis.
The NHF had been working hard to avoid the legislation that could have led to housing associations being reclassified as public bodies. In return we retain some control over how we implement the policy in our communities and some flexibility to help us replace those homes quickly.
For example, we can exempt some properties, such as those in rural areas where affordable homes are scarce, while allowing the resident to use the discount to buy another home elsewhere.
We were made aware of the deal a few weeks ago, so had discussed and agreed our approach with the Board. It was a long and challenging discussion, but we believe this is the best solution to a difficult situation.
However what is clear is that strong relationships with local authorities, and with housebuilders, will be absolutely crucial and we’d reiterate our long-term commitments to the areas in which we work.
Based on our experience of the Preserved Right to Buy we expect significant demand. Our challenge will be to build even more new homes to replace those sold, while continuing to meet a growing housing need.
But we’ve built around 3,500 homes since 2011, mostly affordable, and more than 2,000 were without government funding.
We’ll need to reinvest the receipts quickly to build new homes so while it’s true that sales and opportunities don’t always match up, our experience tells us the greater flexibility we have the better the outcome.
We also simply cannot afford to lose income earning assets for too long when our income is already being reduced by an annual 1% rent reduction over the next four years. This could also impact our ability to build.
If government provides the flexibility we need, we’ll use our independence and financial strength to not only help our residents own their own home but continue to meet the need within our communities.