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The second pilot
The questions you should be asking yourself are:
- What does this mean?
- What should I be thinking about if I want to take part?
- Is the main scheme still going ahead?
What does this mean?
To facilitate the second pilot, the Government has pledged £250m to enable housing association tenants to purchase their homes between 2017 and 2022, which they estimate will result in over 3,000 tenants owning their homes. This second VRTB pilot would test not only demand but also one-for-one replacement, and portability.
Although funding has been set for 2017-2022, there is no funding for this financial year and only £25M for 2017/18 (Autumn Statement Page 22 Table 2.1 line 16) which could equate to many disappointed tenants. The following years do bring £90M and £110M respectively, which may suggest either a slow beginning or a slightly prolonged timescale.
What should I be thinking about if I want to take part?
What to think about if you are, or are thinking of, being part of the extended pilot:
- Like the main VRTB, this is, of course, voluntary, so the removal of the statutory framework means policies and procedures, both legal and practical, need to be thought through carefully and made robust to any potential challenges;
- The eligibility for this is currently uncertain as the criteria for the main VRTB will be set by the Government, whilst the current pilot set their own criteria; and
- For many, preparation for the main VRTB has centred around the property criteria, noting the original NHF offer to Government. The current pilot had a much wider list of exclusions (but then didn’t have the portability aspect to deal with).
If you required further advice or assistance, we are uniquely placed to help you, as we acted as solicitors to the VRTB pilot, which included drafting sale documentation to both “fill in” the blanks and build on the statutory scheme and the contractual funding arrangement that underpins the pilot.
Is the main scheme still going ahead?
Inside Housing has reported that the Government will not be requesting any high-value asset payments from local authorities during 2017/18. Given that those payments will finance VRTB sales, this will delay the start date for the original VRTB scheme until at least April 2018.
We think that it’s key to highlight that the funding for the extended pilot extends through to 2021. Despite this, the Housing Minister, Gavin Barwell, reminded Inside Housing that the national roll-out is a Manifesto pledge and that RPs shouldn’t assume that the main scheme will be delayed until 2022. We will wait to see what happens in the run up to (and the Manifesto for) the 2020 General Election.
It is reasonable that within the many priorities of RPs at the moment, main scheme VRTB should drop down a peg or two. We note the NHF has cancelled the VRTB Conference that was scheduled for February next year.
Given some of the issues we have highlighted in this article, it is easy to question whether the VRTB national roll-out will take place in 2018, or indeed at all. Watch this space.
For more information
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