My Lords, this is a modest amendment that requires a report to each House of Parliament to set out the effects of the policy of reducing the qualifying period for eligibility for the right to buy from five to three years. In particular, it seeks information on the impact of this reduction on the numbers of affordable council houses that have replaced those sold. While this amendment focuses on replacement on a like-for-like basis, I acknowledge that the Government’s commitment relates to a one-for-one replacement.
As I made clear on Second Reading, we believe that people should have the right to own a home and have come to support the right-to-buy programme as one mechanism to facilitate this. We are considering these issues when home ownership has declined to its lowest level in 30 years, and when we have a housing crisis in the UK because for decades we have failed to build sufficient homes to meet demand. The consequences of this are now being widely felt by millions of working people who are unable to afford the house that they want, and their children and grandchildren face the prospect of never being able to do so.
As Michael Lyons stressed in his latest report, building more homes is not just about home ownership. There is a need to provide homes for social and affordable rent so that those on the lowest incomes can have a decent home, too. His report specifically identified that local authorities should have a key role in commissioning and building social housing, and acknowledged the continuing commitment of housing associations to this end. Of course, the sale of a council house does not of itself add to or diminish the stock of housing in the UK, but how the proceeds of sale are applied and the extent to which that adds to the housing stock are of crucial importance. These things need to be considered in the near and longer term. Evidence provided to the Lyons commission
suggested that about one-third of the properties sold under the right to buy are now privately rented, many at rent levels above applicable housing benefit levels.
In seeking this report, we are looking to hold the Government to account for the commitment made when their reinvigorated right-to-buy programme was introduced. The Solicitor-General in the other place,
“guaranteed, for the first time ever, that receipts from additional local authority sales—that is, sales above the level forecast prior to the change—would be used to help to fund new homes for affordable rent, on a one-for-one basis”.—[Official Report, 6/3/14; col. 276.]
This commitment applies to the reinvigorated programme generally, not just to changes in this clause, and requires some decoding. It is accepted that it is one-for-one, not like-for-like, and it would appear—perhaps the Minister can confirm this—that it is based on the Government’s analysis at national level that, should it have the relevant proceeds, and with the application of those receipts limited always to 30% of the cost of new provision, a one-for-one test could nationally be satisfied. Can the Minister throw any light on the distributional aspects of this approach and the extent to which the allowance works only because of a mismatch between locations where proceeds arise and where they can be reinvested? What assumptions have the Government made about the type of properties sold and those replaced? Because the right-to-buy proceeds could be applied to only 30% of the cost of replacement provision, local authorities will be expected to borrow the balance and fund from affordable rents. They have to sign agreements with the Government to this effect, so how many councils have entered into such agreements with the Government or the HCA? How many have not? Are the Government aware of any councils that would be precluded from undertaking such an agreement because of their borrowing cap? What is the Government’s definition of affordable rents for this purpose? Has any estimate been made of the additional housing benefit or universal credit cost that will arise from the requirement to charge such rents to benefit from the replacement arrangements?
One of the difficulties in all this is how to be clear about the baseline—the forecast level of sales prior to the reinvigorated programme. Is it correct that the baseline is set in terms of revenues garnered, not units sold, so that the Treasury always gets its money first? Will the Minister provide an analysis, year by year, of the baseline so that there can be some clarity as to the additionality that should provide the Government’s one-for-one commitment? It is understood that the Government’s guarantee does not extend to tenants accessing the preserved right to buy for those council homes that transferred into housing association ownership. The National Housing Federation briefing asserts that because housing associations entered into agreements about the split of proceeds of sale before the reinvigorated programme, they receive only a small proportion of the sale proceeds, with the lion’s share going to local authorities and not always used for housing. It says that 92% of housing associations that it surveyed declared that they would not be able to replace homes sold via the preserved right to buy. What plan do the Government have to facilitate replacement of homes sold by housing associations in that manner?
The National Housing Federation has given us figures for 2012-13, stating that 5,944 local authority homes were sold but that only 3,634 new homes had been started to replace them. For that and the subsequent year, how many homes have been sold and what are the related proceeds? How many of those have been treated as attributable to the reinvigorated process, and therefore how much is available for replacement homes?
Three other amendments focused on resources for social housing are grouped with this one, and I shall outline our position on them when they have been spoken to.
This is an important issue. Given the Government’s change in policy we need at least in these circumstances to review what is happening, hence the requirement for a report. I beg to move.