Fwd: National CLT Network, Wessex, newsletter

Tony Gosling tony at cultureshop.org.uk
Fri Sep 4 12:01:24 BST 2015

>Please see below for a update from our CLT 
>colleagues on Right to Buy and the rent reduction policy in relation to CLT’s
>Appledore CLT's site - wonderful views and 
>challenging terrain. Appledore is a typical 
>coastal village where second homes account for over 40% of the stock.
>Dear Colleagues
>This email is to brief you on a recent meeting 
>between the National CLT Network, Wessex and Oliver Letwin MP.
>* As usual could CLT recipients please forward 
>this email to their colleagues *
>In our last briefing, we anticipated a 
>discussion with Oliver Letwin MP about the 
>implications for CLTs of the proposed 
>Right-to-Buy legislation and the effect of the 
>reductions in housing association rents, as 
>announced in the July budget. Oliver Letwin is 
>the MP for West Dorset, a district with 9 CLTs, 
>and a member of the Cabinet. Catherine 
>Harrington of the National CLT Network and Steve 
>Watson of Wessex CLTP met Oliver on the 25th of 
>August and the following is a summary of the discussion.
>Oliver’s overview was that the housing 
>landscape is changing as the Government 
>introduces a range of measures to encourage 
>employment alongside investment in 
>home-ownership as opposed to state-assisted 
>rented housing. The aim is to bring 
>home-ownership within the reach of as many 
>people as possible, even those on low incomes.
>He recognised, though, that such a 
>transformation will take some time and that a 
>base level of affordable rented accommodation 
>will still be required, particularly in rural 
>areas where the stock has been seriously denuded 
>by the first Right to Buy and affordability issues are especially severe.
>The Right to Buy - legislation due to be introduced in the autumn
>Where CLTs have developed homes for rent in 
>rural communities, Oliver expects that they will 
>be exempt from the Right to Buy on the grounds 
>that such communities have few, if any, 
>affordable rented homes and they are inherently 
>difficult to provide. The mechanism by which 
>this exemption will be applied has yet to be 
>devised but he expects it will apply to homes 
>fully owned by CLTs and those where the CLT has 
>the freehold and a HA has a long-lease.
>The Government is aware that such supply 
>problems also apply to small towns subject to 
>housing stresses caused by high property prices, 
>difficult terrain, limited site opportunities, 
>level of second home ownership and so on, and is 
>exploring the scope for a similar exemption for CLT schemes.
>An exemption for CLT schemes in larger towns and 
>cities is not currently supported by the 
>Government on the understanding that there will 
>already be a range of affordable housing options 
>and there will be the opportunities to reinvest 
>Right to Buy proceeds in new affordable homes. 
>In addition, the Government is concerned that, 
>no matter how carefully an exemption for urban 
>CLTs might be defined in the Act, the means 
>might eventually be found to classify large 
>swathes of existing housing association stock as 
>‘urban CLT schemes’, thereby significantly 
>weakening the policy aim of extending the Right 
>to Buy to all housing association tenants. The 
>Government sees this as a far lower risk in 
>rural areas. The National CLT Network will 
>consider a workable definition of an ‘urban 
>CLT’ and prepare evidence on the need for Urban CLTs to be made exempt.
>The July Budget - the effect of rent reductions over 4 years
>The plight of the small number of CLTs that have 
>become housing associations in order to obtain 
>grant funding was discussed. These CLTs are 
>faced with a rent reduction over four years 
>which, in the context of a very small number of 
>homes, a tight business plan and no other stock 
>to help absorb the loss of income, means an 
>uncertain future to say the least. Having taken 
>such time and trouble to develop their own 
>affordable housing projects, such CLTs will not 
>wish to merge with large housing associations – 
>one of the suggested remediies for small HAs 
>struggling with viability – and Oliverr agreed 
>to raise the issue with the Department of 
>Communities and Local Government (DCLG). The 
>National CLT Network will provide a briefing on the CLTs at risk.
>Many CLTs have decided to avoid the regulatory 
>risks of becoming housing associations, 
>preferring instead to work in partnership with 
>established associations using the model 
>developed by the Wessex. Whilst the model’s 
>success has led to a pipeline of future 
>partnerships, most of these, being in rural 
>locations or small towns, are for rented housing 
>– the very form of tenurre made less viable by 
>the policy of rent reductions. Whereas housing 
>associations are generally planning to 
>compensate for rent reductions by providing 
>fewer rented and more shared ownership homes on 
>their traditional sites, there is very limited 
>scope for this on typical CLT schemes due to 
>affordability and mortgagbility issues. (There 
>are very few lenders willing to provide mortgages on exception sites).
>We discussed the danger of those associations 
>which have begun to work so well with CLTs being 
>unable to continue with pipeline projects due to 
>issues with the projects' viability. It was 
>agreed to reconsider this later in the year once 
>the associations had revised their business 
>plans. If necessary, Oliver will facilitate a 
>discussion with Wessex-based associations to 
>consider how to keep them involved; potentially 
>leading to an approach that could be adopted in 
>other regions. Wessex suggested that, if 
>appropriate, consideration should be given to a 
>second phase of the ‘community-led development 
>grant’ which had proved so successful in 
>funding partnerships in the Wessex area and 
>elsewhere between 2011-15 (i.e. a fund of c. £20m).
>Oliver Letwin's expectations of Right to Buy 
>exemptions, particularly if certain small towns 
>can be included, are certainly encouraging for 
>Wessex-supported projects, although we will need 
>to see how the legislation is actually drafted. 
>Similarly, his recognition of the impact of the 
>Budget on CLT schemes and the offer to help 
>achieve their viability is most welcome. In the 
>meantime, Wessex, alongside other support 
>services and individual CLTs, will continue to 
>play an active part in the National CLT 
>Network's excellent campaign. Wessex will be 
>involved in further discussions with officials 
>from the DCLG in early September; this time 
>accompanied by Norton sub Hamdon CLT, the proud 
>owner of a community shop as well as being the 
>freeholder of properties developed and operated by Yarlington Housing Group.
>Norton sub Hamdon CLT's community shop.
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