Legislation ending HA right to buy passes final stage in assembly

This week the Housing (Amendment) Bill passed its final stage in the NI Assembly. In addition to other changes to the regulation of housing associations, the bill will end the compulsory house sales scheme for housing association tenants.

The bill will amend existing legislation setting out powers the Department for Communities can exert over the management and operation of housing associations. Amending such controls will allow the Office for National Statistics (ONS) to reverse its 2016 decision that housing associations are public bodies.

New legislation will allow housing associations to build

Classifying housing associations as public bodies impacts on Northern Ireland’s ability to build new social homes because associations’ debts accrued to finance building work would be added to the public balance sheet. HM Treasury currently has a derogation in place to ensure that the budgetary effect of the reclassification is not realised, but this derogation will expire in March 2021.

This new legislation is important and urgently required to allow Housing Associations to continue to build much-needed social homes. If the Treasury derogation expires without legislative change, the Minister for Communities estimated that the volume of new social homes being built by Housing Associations will fall by around 50%. The classification decision has also hampered Co-Ownership Housing’s ability to access government loans impeding the operation of Northern Ireland’s leading shared-ownership housing scheme. Until now, the Department had been supporting the Co-ownership scheme at a cost of £3m per month.

Ending right to buy, transition period and grants for voluntary sales schemes

The bill will end the compulsory house sales scheme for housing association tenants. There will be a two-year transition period, during which eligible tenants will still be able to exercise their right to purchase their social tenancy at a discount.

The bill contains provisions allowing housing associations to operate a voluntary house sales scheme, and for the Department for Communities to make grant payments to support such schemes.

The future of the Housing Executive's house sales scheme

This legislation will not affect the Housing Executive’s compulsory house sales scheme. The Minister announced her intention to consult separately on the NIHE scheme. However, Housing Rights notes that this issue was previously consulted on in 2018, with 18 consultees in favour of sending the RTB for all social housing tenants. (One consultee was in favour of ending the housing association sales scheme and retaining NIHE's scheme and six were in favour of retaining both schemes,with the majority of respondents in favour of the status quo were identifed as being existing tenants.)

Since 2002 the social housing waiting list has grown by over 11,600 households. NIHE annual reports and publications by the NI Assembly's research and information service's publications indicate that house sales through the NIHE house sales scheme scheme alone accounted for more than 10,000 social properties being sold since 2002. This figure does not include properties sold by housing associations during that time.  

Given the large number of homeless households in Northern Ireland and the fact that former social homes sold under the house sales scheme can end up in the private rented sector with rents financed by Housing Benefit and Universal Credit, Housing Rights is urgently calling for an end to the house sales scheme for all social landlords.  

We have further concerns that a unilateral end to the house sales scheme, whereby those allocated NIHE properties enjoy a statutory right to buy that is not extended to other social tenants, could impact the operation of the allocations system. Aside from the inequality this presents, Housing Rights is concerned that this may lead to some applicants turning down reasonable offers of housing in the hope that their next offer may be from NIHE and offer an affordable route into home ownership that they would not otherwise enjoy.

Accordingly, Housing Rights welcomes the Minister’s commitment to addressing the future of the NIHE’s house sales scheme and we would welcome confirmation that a review of the NIHE house sales scheme will take place quickly and within the current mandate.