A bill for buyers: the implications for local authorities of the Housing and Planning Act


By Jo Pitt, Local Government Policy Advisor, CIPFA

The Housing and Planning Act has now received royal assent. It has stretched the parliamentary system, with the House of Lords challenging the Bill throughout its progress. Peers criticised the lack of detail on key areas such as ‘pay to stay’ but the government insisted that this would be provided in the regulations. 

Although often controversial the Act has remained faithful to its original objective which was to support home ownership and give tenants in housing associations the chance to own their own home. The impact on the sector is now being modelled and while the majority of local authorities will be able to restructure their budgets, their ability to provide additional homes will be weakened. Some may not survive.

Key changes at a glance

The Act will bring about key areas of change such as: 

  • the sale of higher value local authority council houses will release income to fund the right to buy scheme now agreed with housing associations
  • social rented sector tenants earning above a set level of income will be required to pay market rent. Local authorities will have to repay the additional rent they receive from these tenants to the Exchequer. Housing associations will be able to keep it to reinvest in new housing 
  • secure tenancies of up to ten years can be granted by local authorities 
  • starter homes will be available to first time buyers at a 20% discount off market value, subject to value caps with restriction on resale to avoid buyers taking advantage of the scheme
  • starter homes are to be included on all ‘reasonably sized’ sites
  • amendments to increase the speed of planning applications will include a new clause which allows the secretary of state to grant planning freedoms to local authorities to facilitate new housing - as well as providing for pilot schemes allowing alternative providers to process (but not determine) planning applications.

Welfare changes

Before the detail in the regulation is agreed it is also worthwhile combining the list above with the list below showing the impact of the Welfare Reform and Work Act 2016 to get a complete picture of the changes that will impact on the social housing sector. The housing benefit changes from the Welfare Reform and Work Act 2016 will mean the introduction over the coming years of a number of smaller but nevertheless significant changes including:

  • removing the family premium from housing benefit from May 2016
  • removing entitlement to housing support in housing benefit and universal credit for those aged 18–21, replacing it with a new ‘youth obligation’ to ‘earn to learn’
  • local housing allowance (LHA) rates to be frozen for four years
  • LHA rates to apply to social housing from 2018.

Across the country local authorities are currently remodelling and readjusting their housing business plans to reflect the changing environment. CIPFA’s forthcoming work with the Chartered Institute of Housing (CIH) is looking to do this on a national scale, so we will be following this story over the next year and exploring the implications for the public sector.     

Discover more

  • Last change to book: get insight, join the debate and network at CIPFA's Social Housing Conference on 9 June in London – see the full programme
  • For ongoing help and insight join CIPFA's Housing Benchmarking and Diagnostic Service – find out more