Housing associations will repay government grant from Right to Buy homes if they fail to replace properties sold in three years, under a sector proposal.
Details of the National Housing Federation (NHF) offer to government to escape legislation to implement the Right to Buy reveals measures designed to encourage landlords to replace homes sold under the policy or else face repaying government grant.
Accoring to Inside Housing who have reported well on the deal:
“Further details have also emerged over the deal, including giving landlords greater freedoms over selling stock and converting sub-market rent homes to other tenures.
Under the proposal, all proceeds from the sales would be expected to be spent on building a new home, or in “exceptional” cases buying new property within a maximum of three years.
However, only the grant that was originally provided to build the sold home would be returned to the government if it was unspent within the three-year period.
This differs from the policy for local authorities, which are required to repay the entire part of the receipt retained for new-build if it is unspent.
In a further clause designed to encourage landlords to replace the properties sold, the government would pay 70% of the compensation for the sale when the home was sold, and the remaining 30% would be paid when the replacement was started.
The NHF proposal follows a series of accusations that councils are currently failing to replace homes sold under the Right to Buy on a one-for-one basis.
The document says housing associations would aim to replace homes within two years, but “the default position under the terms of this offer is that housing associations would have flexibility to replace homes within a three-year period”.
Housing associations have until 5pm next Friday to sign up to the proposal, or else face legislation that would enforce the Right to Buy on housing associations across England. “