£60 million rural and coastal community-led housing fund
On the 16th March 2016, in the Spring Budget, the Chancellor announced that £60 million will be made available each year for five years for community-led housing developments, including for CLTs, in communities where the impact of second home ownership is particularly acute. This will be funded through the receipts from the higher rates of Stamp Duty Land Tax on additional homes (i.e. Second Homes) that came into force on 1st April 2016.
We have been liaising closely with Government and Parliamentarians on the design of the programme, working with the wider community-led housing sector. For the latest update see below.
Latest news on the £60 million fund – updated February 2017
On the 23rd December 2016 the Government announced the first year of the fund, allocating £60 million to 148 local authorities to support community-led housing. While the Spring 2016 Budget had suggested the funds would only be for rural and coastal areas, the Government responded to lobbying from organisations including the National CLT Network and opened it up to all areas with second home and affordability problems.
The 148 local authorities received half their allocation up front, without strings attached, and will receive the second half upon providing the Government with plans that meet the fund's objectives.
What this means is that if your local authority has received funding you can make a bid to cover any reasonable costs, from start up grants through loans and grants to get you to planning and capital to subsidise any affordable housing. You can see a full list of the 148 local authorities in this PDF.
We have been supporting an initiative co-ordinated by the Building and Social Housing Foundation to provide advice to those local authorities.
For subsequent years of the programme, the funding will be distributed centrally. We are working with officials on the design of the programme from year 2 onwards.
We will keep this section updated as much as possible. If you have any questions on this fund, please do contact Catherine Harrington, Director of the National CLT Network, on firstname.lastname@example.org or 020 3764 1842.
The Right to Buy
The Government has a manifesto commitment to give tenants in housing association (Registered Provider) homes the Right to Buy their property.
Many CLTs are not registered as a Registered Provider with the Homes and Communities Agency and so they are not at risk of being effected by the Right to Buy. However, eight CLTs are Registered Providers, three are in the process of registering and at least another 45 are working in partnership with housing associations and have granted the association leases over their land.
If the Right to Buy was to be applied to CLTs, it would go against their basic aim of keeping homes affordable in perpetuity, would have a significant impact on the current supply of CLT homes and would have a severely dampening effect on the future growth of the CLT movement.
We have therefore been campaigning hard to make CLTs exempt from the Right to Buy and 70 MPs were engaged by their local CLT on the campaign. For an update on this work see below.
We are also part of the wider community-led housing movement and therefore support the case for an exemption for all forms of rental community-led housing. A statutory definition of community-led housing is needed on the face of the Housing Bill.
The latest news on our Right to Buy campaign - updated November 2016.
In September 2015 the Government and the National Housing Federation, on behalf of housing associations, entered into an agreement to extend the Right to Buy to housing associations on a voluntary basis. An ‘Offer to extend Right to Buy discounts to housing association tenants’ was published on 24th September 2015. This meant that the Right to Buy would not be taken forward through legislation but would be implemented voluntarily.
Following our campaigning efforts, the voluntary agreement sets out that in certain circumstances housing associations can exercise discretion to decline a sale, including:
- Properties held in a Community Land Trust.
- Properties in rural locations as defined by Section 17 of the Housing Act 1996. This would generally mean properties in National Parks, Areas of Outstanding Natural Beauty and places that have been designated as rural by the Government (places with fewer than 3,000 inhabitants per hectare).
The Government subsequently confirmed the discretion for CLTs ‘on record’ when we promoted an amendment to the Housing and Planning Bill. Baroness Williams of Trafford stated the following on 8th March 2016 in Committee Stage of the Bill in the House of Lords: "In giving other examples of where housing associations may exercise discretion over sales....where properties are held in a community land trust..." (Hansard, 8th March 2016, Column 1228). For the full record of the debate click here.
On 5th July 2016 the former Minister of State for Housing and Planning, Brandon Lewis MP, wrote to us confirming that there is an 'expectation' that housing associations will exercise that discretion. Download the letter at the bottom of the page.
However, we are concerned that this still doesn't give the sector the clarity and certainty it needs to plan securely for the future. We are therefore calling on the Minister to make a statement on record that CLTs are excluded from the Voluntary Right to Buy.
In parallel, we have been liaising with the National Housing Federation on the implementation of the voluntary agreement to ensure the strongest possible protection for CLTs.
In addition, Wessex CLT Protect are working on a clause to protect the homes from the Voluntary Right to Buy. Do get in touch with Steve Watson from Wessex CLT Project here if you would like to know more.
Rent reductions - CLTs excluded from 1% rent cut
The Government, in their Budget on 8th July 2015, announced that affordable and social housing rents would be reduced by 1% each year for 4 years from April 2016. This is enshrined in the Welfare Reform and Work Act.
The rent cut would have affected CLTs that are Registered Providers (RPs) themselves and, potentially, CLTs that are currently working with, housing association partners.
There are eight CLTs that are RPs. All these RPs have very small numbers of homes, tight business plans, very prudent running costs (some of which are delivered by volunteers at zero cost) and no other stock to help absorb the loss of income. The proposal would have meant that these CLTs would have faced a very uncertain and, in some cases, disastrous future. For half of the 8 CLTs that are RPs, the rent reductions proposal would have led to severe financial difficulties and, in two cases, insolvency within three years.
We urged Government to make an exception to the rent cut policy and on the 21st December Lord Best tabled an amendment to the Welfare Reform and Work Bill to exempt CLTs from the rent reduction proposal. On 27th January 2016 we received the excellent news that CLTs are to be excluded from the rent cut for one year. A letter confirming this can be downloaded from the bottom of the page.
However, whilst the one-year exemption alleviated the problem in the short-term, many of the same issues identified above for CLTs would have resurfaced should a rent reduction be applied from April 2017. We have therefore been working closely with officials in the Department of Communities and Local Government to make the case for extend the one-year exception for CLTs to a full exemption.
On Thursday 15th September 2016, in a written statement, the Secretary of State for Work and Pensions confirmed that the exception will be extended for the remaining three years, completely exempting the sector from the 1% rent cut.
The Government has also put back the housing benefit cap for Community Land Trusts until at least 2019/20. It had been planning to cap the amount of benefits payable to social tenants in Community Land Trusts at the level of the Local Housing Allowance. This can make it difficult for some people to afford their rent, such as single people under 35 without children who would only have been entitled to the relatively low 'shared accommodation' rate.
For a briefing on this, please contact Catherine Harrington, Director, on email@example.com.
Please note - we will keep this section updated as much as possible. If you have any questions on the policy environment and our lobbying activities in the meantime, please do not hesitate to contact Catherine Harrington, Director of the National CLT Network, on firstname.lastname@example.org or 020 3764 1842.