You don’t know what you’re doing

January 5, 2016, sees the Housing and Planning Bill return to the House of Commons for the Report stage (if you want to read about how the Committee stage went, the excellent House of Commons library analysis is here and our comments are here).

Now, as you’ll all remember, the Bill requires local authorities to make payments each year to the Secretary of State, such payments to be calculated by reference to the value of their “high value” stock which falls vacant each year. There is something of a concern (rightly) that this is likely to mean the death of local authorities as landlords in parts of the country, especially London.

So, the PM and Zac Goldsmith MP are (according to the Evening Standard) to put down an amendment to the Bill to “guarantee” that two new “affordable homes” are built for each property which is sold.

The problem is that this is just nonsense.

First, local authorities have already spent the money from rental income and/or sales of these properties. How is that, you might ask. Well, when the government ended the housing revenue account subsidy system (Localism Act 2011) it required local authorities to each take a share of the central housing debt; they need their sale/rental income to pay that debt off. Indeed, authorities have budgeted on having that money.

Secondly, authorities are already suffering from massive shortfalls because of the need to fund the RTB discount (‘tho, as our blog post on the Cttee Stage points out, the Bill as drafted would allow you to avoid the RTB). If you have a property worth “X” and you are forced to sell it for “X less £100,000”, then you are out of pocket to the tune of the £100,000 discount.

Thirdly, where is the money going to come from to build these two new homes? The land might need to be acquired. It will certainly need to be prepared (possibly even cleared and decontaminated if brownfield). And then the house needs to be built. Given that the whole point of this part of the Bill is to take money away from authorities, how are they going to fund this?

But the fun and games don’t stop there. Assuming that the plan is simply to adopt the amendment that Zac tabled at Committee Stage, then (i) there will be no requirement that the property is in the same borough, merely that it be in Greater London; and, (ii) it seems that the ‘duty’ is merely a target duty and probably not enforceable at the suit of an individual.

Target for new affordable housing provision in Greater London

The Secretary of State, the Mayor of London and local housing authorities in Greater London as defined by section 2 of the London Government Act 1963 shall jointly have a duty to achieve the provision of at least two new units of affordable housing to be provided within Greater London in return for the disposal of each unit of high value housing in Greater London as defined under section 62.

As NL has remarked on more than one occasion, this really is a “back of a fag packet” Bill. Perhaps it should just be amended to provide that the Minister shall have a Unicorn. Details of said Unicorn to be set out in Secondary Legislation.

Posted in General topics, Housing law - All, Regulation and planning, right-to-buy.

About J

J is a barrister in London. He loves service charges and all things leasehold law related. He also likes beating rogue landlords and mortgage companies.


  1. The same unicorns were braying this at the 2nd reading and from all political parties…if they were London based unicorns…though of course the upcoming London Unicorn Mayoral election had nothing to do with this…

    That would be the same London that has almost ALL the ‘high value’ LA properties in the UK – average high value price according to DWP is £300k value of which 15,000 per year forced sales make up the £4.5 billion per year pot to pay housing associations (boo hiss!) for the RTB discounts they give to their tenants…

    Of course very few unicorn high value housing units exist in the North West of England (with just 3 of 39 LAs still having housing stock) compared with 40% + of London unicorn council departments in its 33 LA areas…

    This of course cannot be back of a fag packet as once you write ‘unicorn’ onto the average fag packet (and especially since plain paper packaging of them idea was evicted due to the efforts of a recently ennighted antipodean PR blag merchant) there is no room to write anything else…

    Other than that in full agreement with the above…

    • The labour proposed amends on ‘London’ were mostly quite different and more directed at opposing or mitigating London sell-offs.

  2. Pingback: The Housing Bill: From bad to worse | Jules Birch

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