Housing and Planning Bill

Written evidence submitted by Lincolnshire Rural Housing Association (Lincs Rural) (HPB 75)

Housing and Planning Bill 2015-16

1. Lincs Rural is a specialist housing association, which has provided affordable housing for the last 30-years in Lincolnshire, Rutland and Kings Lynn and West Norfolk. Affordable rented homes by local authorities and housing associations amounts to 8% of the stock in rural communities of less than 3000 verses 19% in urban areas. On average the lower quartile income to lower quartile house prices is 8:1. The lack of protection in the Bill for rural affordable housing will remove future opportunity for low-wage earning people who have strong local connections to remain in their communities. The will undermine social and economic viability and the balance of rural communities. It will exile people from their roots, shared history, support network and each other.

2. The National Housing Federation (NHF) is in the process of negotiating a voluntary agreement on the extension of Right to Buy to housing associations. The proposed terms of the agreement were put to a vote of NHF members. Lincs Rural and 37 other housing associations as NHF members voted against the agreement, because the Association believed it was preferable to subject to parliamentary scrutiny the argument for full rural exemptions from the extension of Right to Buy to housing associations as a means of protecting the viability of fragile and vulnerable rural communities.

3. Lincs Rural as a specialist rural housing provider assures the Committee that unless there are full statutory rural exemptions from the extension of Right to Buy to housing associations, the law of unintended consequences will lead to a decline of the very rural communities the Chancellor of the Exchequer has vowed to support.

4. Lincs Rural considers it appropriate to legislate for the full exemption from the extension of Right to Buy to rural areas to safeguard the viability of smaller communities.

5. This submission provides evidence for full statutory exemptions from ‘Right to Buy’ to affordable housing in rural areas.

6. Lincs Rural feels strongly that full statutory exemptions from Right to Buy should be applied to rural areas to safeguard the viability of smaller communities. We would be grateful if you would support the case for inclusion of the following exemptions in the Housing and Planning Bill 2015-16:

7. Proposed Rural Exemptions:

(a) All affordable housing in areas designated as National Parks and Areas of Outstanding Natural Beauty;

(b) All affordable housing delivered on rural exception sites, or by Community Land Trusts, or similar community led organisations;

(c) All affordable housing in rural communities with under 3,000 population as at 2011 Census; and

(d) All affordable housing in rural communities with under 10,000 population as at 2011 Census as designated by the Secretary of State, taking into account the following criteria - the proportion of second home ownership; the proportion of holiday lets; the level of disparity between lower quartile average earnings and lower quartile house prices; and the extent to which the community operates as a rural ‘hub’ for surrounding settlements.

8. In the rural areas as defined above, we propose the following exemptions should apply:

(a) A full exemption from the proposed new Right to Buy;

(b) A right for the landlord of shared ownership leases to limit stair-casing to 80% of the equity for shared ownership properties, without the risk of the shared ownership leaseholder being able to acquire 100% through enfranchisement or lease extension; and

(c) A full exemption from any requirement for local authorities to sell vacant homes to fund Right to Buy discounts or replacement homes elsewhere.

9. The case for full statutory exemptions from ‘Right to Buy’ to affordable housing in rural areas is:

(a) The restricted nature of the NHF proposed voluntary exemptions for rural housing associations will not in the majority of cases reassure private landowners and local authorities who have made land available for the development of affordable rented homes on the understanding that the status of such homes would remain unchanged in perpetuity. The supply of affordable land available for rural homes is therefore likely to decline unless rural areas are fully exempt from the extension of Right to Buy;

(b) The confidence and trust of local communities with regard to the development of affordable housing will be lost due to suspicion surrounding a voluntary agreement that could be subject to sudden change at the stroke of a ministerial pen. In other words, regulations are easily changed, and discretion to sell under the voluntary NHF agreement can be removed without challenge or scrutiny;

(c) Housing needs surveys consistently evidence the need for affordable rented homes. Homes sold under Right to Buy could be replaced by other ‘affordable housing definition’ of tenures, such as ‘Shared Ownership’;

(d) Small rural communities are finely balanced, and it is unlikely that replacement of houses sold under Right to Buy will be made in the same village;

(e) Properties sold under Right to Buy may be held as security for existing loans. Substitution of this security may not be possible in the absence of unencumbered stock. Replacement of stock held as security will involve expensive revaluation and legal expenses reducing capacity to develop, and potentially to replace on a one for one basis;

(f) The average development time in rural communities is five years resulting in the potential loss of recycled capital grant, which is required to be returned if not used within three years;

(g) Some housing associations may be tempted to sell expensive rural stock and use the proceeds to purchase or develop in urban areas;

(h) A large proportion of Lincs Rural’s affordable rented rural homes are covered by legal agreements which secure the homes as affordable rented properties in perpetuity. Restrictions to the sale of rural affordable homes built on exception sites in accordance with section 106 of the 1990 Town and Country Planning Act can be rescinded after 5-years if no longer relevant, i.e. lifted in the belief that they will be replaced. It is this stipulation that encourages local landowners and community organisations, such as the increasingly important Community Land Trusts, to make available land at below-market rates for affordable rented homes (Lincs Rural has opened two developments in partnership with CLTs this year alone). Leasehold enfranchisement could seriously affect CLT development, as there are only statutory exemptions in areas of less than 3000 population;

(i) Under the terms of the voluntary agreement, it may be possible for housing associations to offer their tenants the opportunity to use their discount to purchase an alternative property from either their own or another association’s stock. It would be at the tenant’s discretion whether or not to take up the portable discount offer. However, the portable discount option is not a realistic one in the rural context, as a housing association is unlikely to have an alternative property in the same invariably small locality in which the tenant wishing to exercise Right to Buy lives. Furthermore, affordable rented properties in rural areas are invariably occupied by tenants who work in the area. So offering an alternative property owned by another housing association is likely to be seen as inappropriate by the tenant in question, as that association is unlikely to have properties in the right locality. The likely outcome of the inability to offer an alternative home will be appeals, and these will not only prove costly to housing associations, but also distract them from their core mission to provide affordable homes.

10. Finally, Lincolnshire Rural Housing Association wishes to draw your attention to a speech given at the 1995 Conservative Party conference by the then Local Government and Housing minister David Curry in which he dealt with the proposal to extend Right to Buy to housing associations. Curry stressed that the Conservative Party did not believe in "identikit" policies that were implemented "without flexibility and imagination". In this connection, being an MP for a rural constituency, he acknowledged how important it was for people to continue to make land available for rural housing. He added that they had the right "to expect that those houses should continue to be available for rent", which is why he said the Conservative Party would exempt rural areas from Right to Buy. Lincolnshire Rural Housing Association recommends this common sense approach be taken into account in the Bill.

November 2015

Prepared 24th November 2015