Government could be open to reworking plans for housing association sell-off

The National Housing Federation is consulting on a proposal that would allow housing associations to get the full market value for any home sold to tenants under the government's plans

Housing: government has plans for housing association properties
Housing: government has plans for housing association properties

The government has indicated that it might be open to changing its plans to extend the right to buy to housing associations, making them compatible with charity law.

The housing association umbrella body the National Housing Federation, which has described the proposals as requiring "a fundamental rewriting of the agreement between government and civil society", is consulting members on a proposal it said would "preserve the independence of the sector".

The right to buy offers tenants of local authorities the opportunity to purchase their homes at a reduced rate.

The NHF has been among those to have expressed concern that extending the scheme to housing associations, most of which are exempt charities regulated by the Homes and Communities Agency, would be incompatible with charity law because the landlords would be required to sell charitable assets at less than their market value.

But a spokeswoman for the NHF said its proposal, if accepted by NHF members and then by government, would mean that housing association would receive the full market value for any home sold under the scheme, with the government making up the shortfall.

Associations would also sign up voluntarily to take part in the scheme rather than having it imposed on them.

"Crucially, as the associations would not be compelled to sell stock under legislation, but would be entering an arrangement voluntarily with government, the independence of the sector would be maintained," the NHF said in a statement.

David Orr, chief executive of the NHF, said about the proposal, which has been drawn up after consultation with government: "I am confident that our membership will see that this is a good proposal, one that’s good for housing associations and their tenants.

"Housing association households could get the opportunity to realise their dreams of home-ownership, and housing associations would be able to replace the homes sold, boosting the nation’s housing supply.

"It also means housing associations could retain the independence that has allowed them to channel billions of pounds in private investment into home building over the past 30 years."

The NHF said that it would be talking to members about the proposal this week and if it was accepted by a majority then it would officially be put before government.

Greg Clark, the communities secretary, spoke about the NHF proposal at the umbrella body’s annual conference in Birmingham yesterday.

"There is no reason why signing a tenancy agreement with a housing association should mean signing away your aspirations to be a home-owner," he said.

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