Housing Monthly Diary Archive

Housing Tenure

July 1998
Right to Buy Changes

Proposals were published which should obtain better value for money for the taxpayer from the Right to Buy scheme, and help the small proportion of buyers who have difficulty in reselling their ex-council home.

The proposals were detailed in two consultation papers:

The Government intended the Right to Buy scheme to continue and that eligible tenants should continue to buy at substantial discounts. Tenants had been receiving up to £50,000 discount. The current annual cost of Right to Buy was around £4,000 million a year. Therefore, it planned to introduce lower limits to discounts, which would take account of local authority property values in each Government Office region. Details were in its consultation paper, Secure Tenants' Right to Buy, proposals to change the maximum discount limit on right to buy and other home ownership incentive schemes in England.

Subject to consultation, it was proposed to substitute a new regulation for the Housing (Right to Buy) (Maximum Discount) Order 1989, SI 1989 513, to bring the discount levels into effect. Around 200,000 people in England had bought a council flat. These were mainly council tenants who bought under the Right to Buy scheme and research shows that the great majority saw this as good value for money. But a small proportion of buyers were in difficulty with high service charges, and some were unable to resell their flat on the open market: either they could not find a buyer, or mortgage lenders refused to give a loan. Local authorities have powers to buy housing, but their resources are limited and they have many other people needing help. Therefore, the Government proposed to offer them a financial incentive. It planned to reduce the amount they had to set aside from their capital receipts from council house sales, by 25p for every £1 spent on buying back an ex-council property. This would effectively cover 25% of the cost of the buy-back. They could use this incentive to buy back houses as well as flats.

In addition to this incentive, the authority would regain a capital asset which, sooner or later, would be available for reletting. Moreover, it would reduce the cost of managing its leasehold property - which, in the case of someone in arrears or unable to resell, could be considerable. And in some cases, eg an elderly or vulnerable person in mortgage arrears, it would be helping someone whom it might otherwise have to re-house. Local authorities would be free to decide whom to help, and on what terms. This could include someone who had bought under a local authority voluntary sale scheme.

The Government proposed to set just two conditions. These were designed to ensure that the concession was only available for buying back properties from individual occupants who wanted to re-sell. The concession would therefore only apply where the repurchase was from an individual, not an organisation; and it would not be done under compulsory purchase powers.

These proposals were made in the consultation paper Buying back ex-council flats and houses. Subject to consultation, it was proposed to implement these changes later this year by substituting a new Regulation for Regulation 104 of the Local Authorities (Capital Finance) Regulations 1997.

November 1998
Low-Cost Ownership Schemes Extended

Housing Minister Hilary Armstrong announced that local authorities would be allowed to continue to fund housing associations to run the existing Do-It-Yourself Shared Ownership (DIYSO) scheme for a further two years. In July the Minister announced plans to replace Do-It-Yourself Shared Ownership (DIYSO) and the Tenants' Incentive Scheme (TIS) with a new Homebuy scheme, which would be based on the scheme that has run successfully in Wales since 1994.

Under the Homebuy scheme, tenants of registered social landlords and local authorities, or those nominated from the waiting list, would be able to apply for an interest-free loan to meet 25% of the cost of buying a home on the open market. A major benefit of the scheme is that it releases a social letting. The scheme is targeted on areas where there is a shortage of socialhousing.

Following the initial announcement of the introduction of the scheme, the Housing Corporation consulted on detailed proposals for it and set rules on eligibility and limits on purchase prices, for the introduction of Homebuy in England in April 1999. In response to the consultation exercise, representation was made by a number of potential DIYSO purchasers who would be unable to afford Homebuy in certain areas. It is to reflect those concerns that the decision was made that councils should continue to have the option to offer DIYSO through the local authority Social Housing Grant mechanism, initially for a further two years, after which the position is to be reviewed.

The Tenants' Incentive Scheme (TIS) and Do-It-Yourself Shared Ownership (DIYSO) scheme assisted tenants to buy a home on the open market. Both schemes were discretionary and, like the new Homebuy scheme, were targeted on areas with a shortage of social housing. TIS offered flat-rate grants of £9,000-£16,000, depending on area. DIYSO allowed a tenant to select a home and buy it on shared ownership terms, part-buying and part-renting it from an RSL, which received a grant from the Housing Corporation.

The timetable for the introduction of the Homebuy scheme is not affected. Funding for Homebuy is provided by the Housing Corporation and RSLs are able to bid for funds from their Approved Development Programme (ADP) for 1999-2000. Local authorities are also able to fund Homebuy, using their own resources, or continue to fund DIYSO.

TIS and DIYSO continued to be funded under the Housing Corporation's ADP for the rest of the financial year. Transitional arrangements protected the position of tenants accepted onto TIS and DIYSO, who had not completed the purchase of their home by 1 April 1999.

November 1999
House of Lords Rules Gay Couple a Family

In a landmark ruling by the House of Lords, the Law Lords held that gay couples can be defined as a family under the provisions of the Rent Act 1977.

The Judges heard how a gay couple lived together in a flat that was rented from Sterling Housing Association for nearly 20 years. One of the partners died in 1994 and an Eviction Notice was served on the other by the Association. The Law Lords ruled that the surviving partner should be considered a member of the household and thus be entitled to inherit the tenancy.

In the public sector, the rules of succession are governed by the Housing Act 1985. This lists those who can be considered members of a household and thus claim succession. The list currently excludes same-sex partners, although this recent ruling is likely to open the door to similar appeals in the social housing sector.

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