How registered providers can set themselves up to make the most of VRtB
Social housing tenants in the Midlands will now have the chance to enter a lottery for a unique reference number (URN), which would let them purchase their property at a discounted rate as long as their housing association landlord agrees to sell. The discount deducted from the full open market price of the property will then be paid back to the housing association by Central Government, on the condition that they replace the sold property with new stock, giving registered providers (RPs) an opportunity to renew their portfolios.
This will not be a process without challenges and RPs will certainly find themselves on something of a learning curve. Here are three ways they can ensure that they are fully prepared to make the most out of the scheme:
Prepare for an increased workload
Any RPs taking part in the scheme are likely to experience an increase in workload, especially for those providers who are allocated a large number of URNs. The pilot scheme has set out requirements for extensive checks which must be completed to definitive timescales, and carrying these out will certainly require additional resource.
Additionally, RP’s will need to review/analyse the S106 Agreements which may affect their stock and ensure that the specific planning conditions are assessed ahead of time, to make sure that they allow for sale at an undervalue and the release of properties allocated as rented stock. All of this means that RPs may need to recruit or reorganise staff and acquire additional resources to cope with the immediate workload increase.
Be open to collaboration
RPs will need to have accurate records and documents on hand for all of their properties. If they discover from these that they don’t have sufficient unit stock to service all the URNs they have been allocated, they could then establish a Memorandum of Understanding with other RPs and housing associations. By establishing a framework of cooperation and working collaboratively to address the issue, interested parties can make sure that the most efficient and effective practices are in place to deliver the pilot’s objectives.
Communicate effectively with the buyer
It is important to get the buyer fully involved with the process. RPs should make sure that interested parties are informed of the conveyancing process from the outset and are actively considering how they will fund the purchase. Buyers should also be issued with a comprehensive information sheet, detailing the timescales and requirements of the process, and a Land Registry-compliant plan, showing an accurate representation of the property’s boundaries. One common delay associated with Right to Buy occurs when RPs do not own all of the land they are proposing to sell, so any attempt to ensure accuracy from the outset is essential in preventing holdups.
At this stage the success of the pilot scheme remains uncertain. It will only become clear with time exactly how the scheme will work and whether RPs will be able to build new properties quickly enough to cover their sales. To make sure this isn’t a problem, it is crucial that all RPs prepare thoroughly ahead of time and communicate clearly with all parties. Putting themselves in the best position possible when engaging with the scheme, will help avoid creating an even greater supply shortfall and hopefully give the social housing sector the shot in the arm that it so sorely needs.