LGIU Blog | The forced sale of council houses – a legitimate fear of the unknown

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The forced sale of council houses – a legitimate fear of the unknown

As the Housing and Planning Bill moves through Parliament, we’ve lined up a series of posts from experts in the sector to give their opinions on what it might entail. The first contribution comes from John Bibby, Policy Officer at Shelter.

Councils have a right to feel anxious about the sheer number of unknowns contained in the Housing and Planning Bill. So much of the detail is being left to regulation, and the proposed forced sale of high value council homes is a case in point.

Stock owning authorities know there will be a formula dictating the amount councils will be forced to pay. But no one outside Whitehall – not even the parliamentarians debating the bill – has any idea exactly what that formula will be.

As such, councils know that they are likely to be stung for a portion of the £4.5bn that the government intends to raise from the scheme and forced to sell some council homes. But they have very little idea of how much cash they’ll have to hand over or how many homes they’ll have to sell.

Shelter and others have tried to shine a light on how the forced sales policy will impact on different parts of the country, by modelling how the proposals made before last year’s election by the Conservative Party would play out in practice. But we have also been told that, when the formula does emerge, it will not be the same as that initial proposal.

The scheme is likely to be more fragmented, operating in different ways in different parts of the country. The impact will be more distributed and likely to affect some areas that would never have thought of their stock as ‘high value’.

So there are many uncertainties. In fact, all stock-owning councils really know for sure is that at some point this year, they will be sent an invoice by government. The invoice will tell them how much of the £4.5bn they are expected to pay up-front for the coming year’s estimated sales receipts.

And while they will have the option of paying the bill without selling homes, by finding the money from somewhere else, this won’t be realistic for many, particularly if they are rushed into making payments. Many will be forced to sell homes that they would otherwise have been able to allocate to families on their housing waiting lists.

At the time of writing this, the Lords were considering whether to insert a ‘sunrise clause’ into the Housing and Planning Bill, which would require full parliamentary approval for the formula when it is introduced through regulation. This would make sure that parliament has the opportunity to see the detail of the proposal and give it final approval.

Having this clarity may not stop the high value sales policy from happening, but it would at least give councils a bit of extra time to plan for it before they find themselves forced to implement it.

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