Do we have to sell off high-value council houses?

Yet again we have the Policy Exchange to thank for a policy, fully incorporated into the Conservative Party Manifesto, aimed at destroying social housing. But with the plan to sell off high-value council houses they have plunged below even their low standards. What, if anything, can councils do about it?

The policy would require the top third in value of all council houses to be sold when they fall vacant, an estimated 15,000 sales per year. A report from a small group of London boroughs has looked at how this would work in more detail. It estimates they’d need to sell 3,500 houses and flats in the next five years. This gives a real measure of the scale of the disaster that’s about to befall those areas where these more valuable homes are located.

As Colin Wiles points out, the effects will be concentrated in certain areas rather than being pepper-potted, as the government is believed to be planning to define ‘high value’ regionally (so London will be one of the regions). In Westminster this would literally mean all relets – 400 units per year – being sold, with none being available to families on the waiting list (including, presumably, those waiting to downsize because of the bedroom tax).

In 2013/14 the number of council lettings to new tenants across England was already down to half what it was ten years earlier, and with rising right to buy sales, estate regeneration schemes and continuing low levels of council new build we could already expect this number to fall still further. But at least every dwelling that falls vacant currently can be relet. Although we don’t yet know the details of how the new scheme will work, presumably any potential relet of a property that appears on a (yet to be compiled) ‘high value’ list will have to be aborted and the property sold. Imagine the frustration of council staff and nearby tenants as – instead of immediately being let to a new family which has probably been waiting for many years for a home, often stuck in temporary accommodation – the most popular houses and flats are boarded up to await a sale.

Chances are that buyers will have no connection to the local area and will very likely be buy to let landlords who will immediately let the homes at much higher rents, with no pre-letting redecoration or the future maintenance they would have continued to get as council properties. What’s worse, in many cases this will happen to every vacancy that occurs in a particular estate, because all will be classed as high value.

At least with right to buy there is a sitting tenant in place while the sale goes through. With the new policy, houses will sit empty while (presumably) council surveyors try to get the best price. And of course there is nothing to stop the buyer themselves keeping properties empty and just using them as an investment. The waste involved simply through the turnover of stock and potential void periods is unconscionable.

Can anything be done to thwart these plans? Of course, we know that housing associations may well take legal advice on whether the government can really force through the linked policy of right to buy sales in their stock, but unlike councils they aren’t (yet) part of the public sector. Local authorities are creatures of government and much more constrained in how they can resist central direction. Much depends on the extent to which councils are willing to stand up collectively to defend their housing stock, and to look at the minutiae of any regulations to minimise the damage about to be inflicted. But surely, faced with a threat on this scale, they can’t just sit back and do as they are told?

The obvious initial tactics will be to amend the legislation and try to secure protection for certain cases. How about – as starters – rural villages where the social stock is below a certain percentage of the total, homes that have been adapted and those built in the last decade? What chances are there of getting a ceiling on sales on particular estates, to ensure that whole areas don’t lose their social housing? Can the formula for designating the high-value stock be challenged, so that boroughs like Westminster don’t lose every new letting?

Then there are the possibilities for legal challenge. How will councils decide if they have two conflicting statutory duties but can’t comply with both? How does the new obligation square with homelessness duties, for example? Doesn’t the obligation to rehouse trump the sales policy? What loopholes will emerge as the legislation and regulations are issued?

Given that there is no sitting tenant/buyer, what is to stop councils letting the property temporarily, for as long as the sale takes? This will at least alleviate the shortage of temporary accommodation and save some pennies that would otherwise be spent in placing the homeless in private sector lettings. Are there other opportunities to go slow – for example, if there is to be a register of high-value properties might it turn out to be a laborious task to prepare it and might designations be challenged by tenants’ associations so the list has to be reviewed before it can be put into effect? No doubt such practices will be challenged, as they were when RTB was originally introduced, but at least they might slow down the process.

Monitoring of what happens to properties that are sold will be vital. Supposing there is evidence that the initial sales in, say, Islington were predominantly to speculators or private landlords, data will be needed on the subsequent rents and if possible who the tenants are (e.g. does it turn out they might have been housed by the council, at much lower cost to the public purse?).

Finally, there must be scope for challenging the government through individual cases. If a council defies the rules and lets a high-value property to someone from the waiting list, using the argument that they had hundreds of people who needed the letting and they did so in pursuit of their housing act duties, what court would say they were wrong and should have sold the property on the open market instead?

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9 Responses to Do we have to sell off high-value council houses?

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  5. Paul Tinnion says:

    I have been thinking about the effect in the Berwick constituency where the new Tory MP is a keen supporter of the proposals. The only remaining council houses are in the old Alnwick district area, which comprised the towns of Alnwick and Amble and many villages. Berwick and Castle Morpeth transferred to associations. It seems to me that all or almost all vacancies in Alnwick town and nearby villages will have to be sold rather than relet. I hope some sort of stink and local campaign can be raised about this, but I’m not holding my breath, unfortunately. Those stuck on waiting lists are largely invisible and powerless. I would however love to be a fly on the wall when the new MP explains to a constituent why they cannot have the house they have perhaps been waiting years for.

  6. joehalewood says:

    Merseyside – 5 local councils with no council housing. Surrounded by x number of councils..with no council housing.

    We look forward to Islington and Westminster selling off all of theirs and the proceeds coming here. This could even be the first ever housing policy where London actually doesn’t cream off all the funding (eg 17% of social housing yet creams 80% of social grant)

    Now am I being facetious? Hmm!

    Am I interested in what is going to happen to councils such as Merseyside in which well over a million people live and have no council housing? Yes and no one seems to know what the hell is going to happen here – any ideas?

  7. paul calland says:

    Well this all may come as huge surprise to some people in the sector but you see the problem is…err how to put this…the tories actually don’t like social housing….(that includes you too housing associations)…never have and never will. I know, it’s a shock isn’t it…and that nice Mr Green seemed such a lovely reasonable chap.

    You have to see the sell off ( social cleansing of the poor or poorer from “nice” areas) and the extension of the right to buy for HA tenants as part of a wider plan. They did all that in the last parliament and hardly any of it was in the previous manifesto as has been pointed out on here. Let’s look at the list;

    Ending the homeless duty on local authorities
    Ending of lifetime tenancies…(this is quite an amusing one; let’s have fixed term tenancies and have a test to see if you still need that homes in 3 or 5 years time…UNLESS you want to buy it of course with a gift of £77,000)
    Restricting access to housing registers under the guise of localism ( oooh look…there aren’t that many waiting now after all since we took those in private rented off the register….so no need for so many of those section 106’s please Mr Wimpey et al)
    Bedroom tax…..(another hilarious one as you can’t have a spare box room madam or we’ll cut the housing benefit…UNLESS you want to buy it with a gift of £77,000 when we don’t give a stuff how many spare rooms you have….that really is a cracker that one)
    So called “affordable rents” set at 80% of market rents….(another humdinger this one as of course in vast swathes of the country they are not affordable at all) for all new rents (and quite how the sector fell for this one…converting existing social rents to affordable for vacant homes just so we can have a slice of the £20,000 a pop subsidy to build new ones)
    Benefit cap….which isn’t a cap of benefits, it’s a cap on housing benefit, again to cleanse the poor from nicer areas ( I recall an article by Peter Oborne telling the tale of getting to a London dinner party late where a heated and apparently articulate discussion had begun about the north south divide [interesting he though]…it took about 10 minutes in to realise they were talking about Kensington High Street)

    Oh yes, they definitely believe in social housing guys and girls….no doubt whatsoever…you can trust them to the end (of social housing)

  8. Thoughtful piece, as ever. Wonder if mutual exchanges could play a part? As the tenancy technically doesn’t end could be a means by which to undermine this BS policy. Would require lot of organising mind.

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