No Higher-Value Asset Payments In 2018/19

Under the Housing and Planning Act 2016 local authorities are expected to pay a levy to government which they make up through selling their most valuable homes when they become vacant. The policy was intended to fund an extension of the Right to Buy to housing association tenants.  However, there have been few recent announcements on the levy, leading councils to warn that the resulting uncertainty is making it difficult to form Housing Revenue Account (HRA) business plans. Mr Javid has now revealed that “local authorities will not be expected to make a payment in 2017/18 or in 2018/19”. Read more on Inside Housing.

Council Plans To Build 500,000 Homes Thwarted By Government

A plan with potential to build more than 500,000 new homes over thirty years has been undermined by successive government policies, a report published by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Chartered Institute of Housing (CIH), claims. The report, 'Investing in council housing: The impact on HRA business plans', examines the 2012 'self-financing settlement' that put in place a robust long-term plan for council house building. The settlement encouraged councils to take on £13bn extra debt to finance building against the promise of future rental income. However, successive policy changes have cut rental income so that today, just 45,000 new homes are expected, no more than were planned before the settlement was made. Read more on the CIH website.

Councils Axe Build Programmes After Rent Cut

Councils have axed thousands of homes planned under fledgling development programmes, as they battle to accommodate the 1% rent reduction imposed by the government. An analysis of more than 40 councils’ Housing Revenue Account (HRA) business plans show heavy cuts to capital investment including housebuilding. South Cambridgeshire, Dover, Cambridge and Reading are axing or putting on hold plans to build thousands of homes while Bolsover, Bournemouth and Southampton announced reductions in their capacity. Many others plan to remove millions from capital expenditure, which include building and repairs works, as they seek to cover the £2.5bn hole the rent cut leaves in business plans over four years. Read more on Inside Housing.

Council Housing: Sales – Parliamentary Written Answer

Emma Reynolds: To ask the Secretary of State for Communities and Local Government, what discussions his Department has had with local authorities regarding the effect on their business plans of the sale of high-value homes.

Brandon Lewis: We are holding a series of meetings and discussions with local authorities to seek their views including the potential impact of the sale of high value council homes on their Housing Revenue Account business plans.

Councils in Rent Rebellion

A large number of councils have rebelled against new government guidance about the level at which they should set their rents. Research into 104 English councils revealed one-third planned to raise rents by more than the 2.2% average allowed under the government’s formula in 2015/16. In most cases, they acted to avoid blowing a massive hole in detailed 30-year business plans, agreed with the government only three years previously. 35 councils have ignored the government and set increases of up to 8.6%, after finding that reduced rent increases could result in debt going unpaid and no cash for repairs. Read more on Inside Housing.