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MHCLG considers second Right to Buy pilot ballot after low take-up
The government is mulling a second ballot of the Right to Buy pilot for housing associations in the Midlands following unexpectedly low take-up, Inside Housing understands.
Sources said the idea has been discussed by the working group for the pilot, which includes representatives from participating housing associations, the National Housing Federation and the Ministry of Housing, Communities and Local Government (MHCLG).
Ministers expected 3,000 sales to be funded through the £200m pilot.
But demand from the 6,000 tenants who were successfully awarded a unique reference number (URN) in a one-month ballot last summer has been low, with many failing to contact their housing association about buying their home at a discount within the required timeframe.
Portability – where tenants whose home is exempt from sale can ‘port’ their discount to purchase another housing association home – is thought to have proved unpopular with tenants. Some homes may be exempt from sale as a result of Section 106 stipulations or other planning conditions.
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Lindsey Williams, chief executive of Futures Housing Group, said: “We have some purchases coming through but we haven’t had the numbers that we initially thought we would.
“We’ve had some people fall by the wayside who got through the initial ballot. Some people didn’t contact us after they got their URN so they’ve run out of time, or people can’t afford to get their mortgage, but the process for us has been pretty straightforward.”
Boris Worrall, chief executive of Rooftop Housing Group, said: “I don’t think it has been logistically problematic, though there has been pretty low demand for the portability aspect.
“I do tend to agree that the evidence I have seen suggests they are not going to hit the 3,000.
“There are two options: one is accept that the amount of successful completions that come through is not going to meet the 3,000 or you have to go back to people for another ballot.”
EMH Group said that nearly half of its 140 tenants who applied to use the Right to Buy either withdrew or did not complete the required paperwork on time.
It said it has completed 10 sales so far and expects to make another 25 in the next couple of months.
One housing association chief executive, who did not want to be named, said they believed there would be a second ballot but that it was not yet clear whether this would only be open to people who applied the first time round.
A manager at another housing association working on the pilot told Inside Housing: “We are waiting to see if there will be a second ballot. We have all recruited people for this pilot and so we need to know.”
MHCLG has not confirmed whether there will be a second ballot.
A spokesperson for MHCLG said: “The Voluntary Right to Buy Midlands pilot is an exciting opportunity which will give thousands of tenants in the Midlands the opportunity to realise their dream of homeownership.
“We are pleased there has been substantial interest in this scheme and that the first sales are currently taking place.
“The government is closely monitoring the progress of the pilot and the spending of the budget.”
The Right to Buy extension: a timeline
David Cameron announced a policy of extending the Right to Buy to housing association tenants on the campaign trail in 2015
April 2015
The Conservatives announce an extension of the Right to Buy to housing association tenants as the flagship policy of their election manifesto launch. To criticism from housing figures, the party says the extension will be funded through the mass sale of high-value council homes, and later wins a surprise majority at the election.
September 2015
Amid reports that the government is planning to nationalise and sell off the housing association sector, associations are asked to vote on a deal developed by the National Housing Federation to adopt the Right to Buy extension policy voluntarily.
October 2015
The sector votes in favour of the deal. Soon after, housing association debt is added to the national accounts by the Office for National Statistics, and the government promises to deregulate to reverse this position rather than the feared nationalisation.
November 2015
A pilot of the policy with five associations is announced in the Autumn Statement, to get under way in April.
June 2016
The EU referendum results in a vote for Brexit, leading to David Cameron’s resignation and the appointment of Theresa May as prime minister. Ms May’s government institutes a less homeownership-focused housing policy.
November 2016
A large-scale Right to Buy pilot is announced. The Midlands later emerges as the location.
August 2018
Large-scale regional pilot due to begin.
