With the general election fast approaching, we look at the main parties’ policies on the right to buy and large infrastructure projects.
As election fever mounts, the property industry must look closely at the Conservative proposal to offer 1.3 million families the right to buy housing association homes. Will this manifesto prove that the property-owning democracy is really alive and kicking?
Tenants of local authority properties currently have the right to purchase their own home. The Conservatives will take this further so that tenants of housing associations enjoy a similar right to buy. The extended right would see thousands of housing association tenants take up a discount on buying their home.
For houses, the proposed discount will be 35% for a housing association tenant who has been in the property for three years and the value of the discount will rise every additional year the tenant has been in occupation. For flats, the discount will be 50% after the first three years rising to 2% each year thereafter.
The Tories plan to fund the replacement of these properties by requiring local authorities to manage their housing assets more efficiently. Councils will be required to sell their most valuable 210,000 properties from current housing stock. The most expensive council-owned housing would only be sold once they become vacant and cheaper properties would then be built on a one-for-one basis.
The legal process for buying from a local authority can be complex and time-consuming, and it’s likely that the new right to buy would follow a similar complicated process. The potential legal process would involve the tenant serving notice on the housing association and receiving a response that verifies the right to buy, together with authority to carry out a valuation.
The valuation is often where the transaction gets stuck as individuals may disagree with the housing authority figures for full market value. It can be costly if a dispute gets stuck and it seems likely a court procedure would be involved if no final valuation figure can be agreed.
Then comes the rest of the legal process, which is likely to be set within a certain period of time. After completion and payment of the purchase price (less the discount mentioned above) there is often a right for the housing association to claw back some of the discounted price if the buyer sells their home within five-10 years of the original transaction. How to track these onward sales and claw back monies may well be a logistical nightmare for all involved.
Critics fear that selling off local authority property in high-value areas promotes high profits and increases right-to-buy fraud in London. There are also concerns that housing associations, which are privately owned not-for-profit organisations, are being forced to sell property at a price below market value. Local authorities are angry that mixed-tenancy council housing is being turned into estates for the poor.
The Tories deny that the manifesto will undermine housing associations as they will receive the full market value of the property. The government will pay the discount to the housing association tenant through the income provided by the sale of valuable council-owned properties.
The proposal could release up to £4.5bn a year to build much-needed affordable housing. The Tories would create a £1bn brownfield regeneration fund from these sales which would produce 400,000 new houses over five years.
Jennifer Chappell, senior associate in the real estate team at Westminster-based law firm Bircham Dyson Bell
The five main party manifestos (Conservative, Labour, Lib Dems, Ukip and Green) offer starkly different options on particular large infrastructure projects but only Labour offers a change to the infrastructure project consenting regime.
The attitude to HS2 is black and white – the Conservatives, Labour and Lib Dems would keep it going, while Ukip and the Greens would scrap it. As an aside, it is unusual for a hybrid bill committee to be interrupted by a general election, but only one of the six members is at risk of losing his seat – Mike Thornton, Lib Dem MP for Eastleigh, with a majority of less than 2,000.
The attitude to a new runway in the south-east is more nuanced. Labour gives the strongest likelihood (but no guarantee) that it would support the recommendation of the Airports Commission, whereas the Conservatives will merely ‘respond’ to it. The Lib Dems will use it to inform national airport policy but reject a new runway in the south-east.
One wouldn’t have thought it was those two parties who set the commission up in the first place.
Ukip will ‘consider’ the report, but are then likely to promote Manston Airport, close to the South Thanet seat where Nigel Farage is standing. Finally, the Greens will reject a new runway whatever the commission says.
The Conservatives and Ukip find common cause in discouraging onshore wind farms, which the other three parties support. Indeed the only renewable energy source Ukip likes is hydroelectric, and the party would return to building more coal-fired power stations. Only the Greens oppose fracking, although Labour will introduce a ‘robust environmental and regulatory regime’ before it can take place.
The Greens would also cancel the coalition government’s extensive road-building programme. One road becomes a political football – the A27 on the south coast of England. Its improvement is supported by the Conservatives but would be delayed by Labour to pay for a freeze of rail fares (along with the A358 in Somerset).
On the legal regime for infrastructure consenting, four of the parties are silent, but Labour will create a National Infrastructure Commission. This is not the same as its previous Infrastructure Planning Commission that the coalition government abolished, which took decisions on applications. Actually, it only managed to take one decision before it was abolished. Instead, the NIC will act like a pan-sectoral Airports Commission, making evidence-based recommendations on what it considers the UK’s long-term infrastructure needs to be every few years, and then monitoring the government’s implementation of its proposals.
Its proposals will replace the current suite of ‘National Policy Statements’ that cover energy, transport and other sectors. The Conservatives don’t say so in their manifesto, but have dismissed the proposal in parliament as too ‘mechanistic’.
Given that a new legal regime for infrastructure consenting came into force as recently as 2010, and was largely unchanged by the change of government parties later that year, it is not surprising that nothing radical is proposed or is indeed remotely likely to happen after 7 May.
Individual projects, though, which unlike policies and processes have specific locations, are much more likely to suffer from changes in political control, as political heartlands are also locationally specific.
Angus Walker, head of government and infrastructure at Bircham Dyson Bell