The Labour party has warned that the current government's housing bill could result in the loss of almost 200,000 council homes. What are the implications for councils if the bill becomes law?
The end of social housing?
In addition to housing losses, Labour are concerned that the housing bill will prioritise homeowners over renters if it is passed. TheShadow Ministerfor Housing and Planning, JohnHealey,warned that the proposal to force local authorities to sell off higher value properties could result in these homes going to foreign investors and buy-to-let landlords rather than those in genuine need of housing.
Elsewhere, the bill further supports home ownership by giving the Communities Secretary the powerto instruct local authoritiesto build 'affordable' starter homes, regardless of whether councils believe this is appropriate for their area. Tenants, on the other hand, will be affected by fixed term council tenancies and 'pay to stay' charges.
The implications of the bill
Voicing the government's position, Communities Secretary Greg Clark said the bill will help over a millionpeople onto the property ladder by allowing housing association tenants to become homeowners. The government also suggests that mandating councils to sell properties, thereby releasing the money locked up in high value stock, will lead to a greater number of affordable homes being built with the proceeds.
Homelessness charity Shelter, however, has described the bill as "robbing Peter to pay Paul", and suggests that almost all the money raised from the sale of council properties will have to go towards funding right-to-buy discounts rather than building more houses. Chief Executive of the Chartered Institute for Housing,TerrieAlafat, agrees that the new bill will make it "incredibly difficult for councils to build new homes – and that vital council housing could be lost." Councils can only sell off their assets once, and risk damaged reputations if buy-to-letlandlords snap up these properties and subsequently charge higher rentsto low-income families.
While councils wait to see whether the housing bill is approved, they can prepare for potential financial effects by securing cash flows and reducing their current liabilities. Ethical enforcement agencies like Dukes Bailiffs can assist by collecting outstanding arrears in a fair and timely manner. Speak to one of our Contact Centre Managers today to find out how we can help.