Ending the right to buy for housing associations

Next week the Northern Ireland Assembly is due to debate the Housing Amendment Bill (NI) 2020. The Bill will go through the Assembly by accelerated passage and will amend existing laws for Housing Associations to facilitate the reversal of the 2016 ONS reclassification which made Housing Associations public bodies. In a briefing to the Assembly’s Communities Committee earlier this month, the Minister and her officials discussed with MLAs the clauses of the Bill and the implications for housing supply in Northern Ireland. Housing Rights’ policy team offers the following analysis on the Bill.

Legislation will allow housing associations to build

The Bill is important and urgently required to allow Housing Associations to continue to build much needed social homes

If reversal to the ONS reclassification does not take place before March, the Minister has estimated that the volume of new social homes being built by Housing Associations will fall by around 50%.

Failure to pass this Bill before March also means that the Co-ownership scheme in particular will be unable to access government loans which would make it difficult to continue to keep the scheme open. Until reclassification is reversed, the Department is supporting the Co-ownership scheme at a cost of £3m per month.

Despite the agreed urgency in progressing the Bill, Housing Rights has noted some areas of the Bill where further clarification would be welcome.

Need to consider future of house sales scheme for Housing Executive tenants

The Bill amends the Right to Buy Scheme (RTB) for Housing Associations, but not for the Northern Ireland Housing Executive (NIHE).

To enable the reversal of the ONS reclassification, the Bill makes the RTB scheme voluntary rather than compulsory for Housing Associations. The Minister has announced her intention to consult separately on the NIHE scheme. Housing Rights notes that this issue was previously consulted on in 2018 with many stakeholders highlighting the difficulty that addressing the scheme for Housing Associations, and not the NIHE, would cause. It is unclear what the outcome of the 2018 consultation was and why a separate consultation is now needed.

Once in operation, the Bill will mean that people on the waiting list for a social home will experience a ‘lottery type’ system with the allocation of one property potentially offering a route to home ownership, whilst another property may not offer the same option. Aside from the inequality this presents, Housing Rights is concerned that this may make the practical operation of the allocation system difficult with some people turning down reasonable offers of housing. Accordingly, we would welcome confirmation that the plans to review the scheme for the NIHE will take place quickly and within the current mandate.

Further explanation of certain clauses required

The Bill contains some clauses which merit further discussion and explanation, particularly around regulation and compensation for Housing Associations operating voluntary schemes.

Clause 5 repeals a previous power to petition for the winding up of a Housing Association. In briefing the Assembly Committee, officials commented that such a power had never been used and it was therefore appropriate to remove it. Ensuring effective regulation of social housing providers is an important element of a functioning housing system, we would therefore welcome more information on why it is necessary to remove this provision.

Clause 8 allows Housing Associations offering a voluntary scheme to receive compensation from the Department in the form of a grant. The effect of this provision may incentivise Housing Associations to continue to operate a RTB scheme, which although allowing some tenants to access a route to home ownership, increases the pressure on social housing by reducing the number of homes available to meet housing need. It is unclear why this provision is necessary or appropriate in the context of the well documented pressures on social housing supply. Housing Rights recommends that if inclusion is necessary, consideration is given to including it at the same time as legislation is brought forward to amend the RTB scheme for the NIHE.