[Diggers350] Fwd: National CLT Network, Wessex, newsletter NOT AFFORDABLE

George DiceGeorge dicegeorge at hotmail.com
Fri Sep 4 12:47:00 BST 2015

without quote marks-
the government have defined ‘affordable housing’
to mean something like 80% of the market rent
which is often not affordable in London and where surrounded by holiday seond homes


From: mailto:Diggers350-noreply at yahoogroups.com 
Sent: Friday, 04 September, 2015 12:01
To: Massimo 
Subject: [Diggers350] Fwd: National CLT Network, Wessex, newsletter

  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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