HRABP - Draft 8 - Flipbook - Page 22
5. Central Government Impact on
the HRA
it. This Business Plan however notes it as a
potential future risk.
In 2016 the Government compelled all social
landlords to reduce rents by 1% each year
from April 2016 to April 2019. Prior to this
our previous Business Plan was modelled on
an annual rent increase of 3.1%. The change
resulted in an effective 4.1% decrease year
on year on the rental income forecast until
2019/20. This reduced our rental income
by £7.7 million over the four year period
as well as having a knock-on effect on
all future years of the Business Plan. We
amended the Business Plan accordingly
and reduced funds available to invest in our
new Housing Development Programme.
The Government has now announced that
from 2020/21 the council can increase rents
by CPI + 1% for 5 years. This improves the
rental income forecast for the business plan
and gives greater certainty of income in the
medium term.
6. Right to buy
The Government has committed itself to the
Right to Buy (RTB) scheme and increased the
maximum discount available with an annual
upward review. In 2012 we entered into an
agreement with the Government to retain a
share of our RTB receipts to reinvest in the
future provision of new affordable homes.
The receipts used can only fund up to 30%
of any investment into new affordable
homes. With the challenging development
programme we have set through the East
Suffolk Housing Strategy we are planning
to make sure these receipts are fully utilised.
The number of properties sold through
the RTB scheme since 2012 has steadily
increased. In 2017/18 30 properties were
sold. Future year estimates for the purposes
of this Business Plan have been projected
at 30 per annum in-line with the increasing
trend. The annual rental income lost through
RTB sales has an impact on the revenue
account and in 2017/18 this amounted to
£115k. Increasing the HRA housing stock
through new development helps off-set the
impact of the loss of rental income.
The Housing and Planning Act 2016 included
provisions to enable the Government to
levy from councils a sum funded by sales
of higher-value empty properties to partfund the extension of Right to Buy to
Housing Association tenants. However,
in late November 2016 the Government
announced that the policy has been formally
postponed. At this point, like most other
local authorities, the Council’s HRA has not
set aside any budget for this eventuality
because of the uncertainties surrounding
Year
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
Total
EOY Count
4613
4551
4537
4540
4512
4492
4467
4439
4456
4462
4506
4533
4560
4587
Change
-11
-62
-14
3
-28
-20
-25
-28
17
6
44
27
27
27
-37
RTB
-4
-8
-9
-12
-28
-20
-27
-30
-30
-30
-30
-30
-30
-30
-318
Disposal
-4
-33
-7
0
-2
0
-8
-2
-5
-11
-5
-5
-5
-5
-92
22 East Suffolk HRA Business Plan 2018 - 2048
The table below highlights the loss of stock
since 2010 through RTB as well as recording
other property losses and gains through
disposals, leases, conversions, purchases
and more recently new build.
Leased Conversion
0
0
0
0
0
0
0
-1
0
0
0
0
0
0
-1
-3
-4
1
3
0
0
1
-3
6
9
2
7
7
7
33
New Build
0
0
0
0
0
0
9
5
44
20
77
50
50
50
305
Purchase
0
0
1
12
2
0
0
3
2
18
0
5
5
5
53
Demolition
0
-17
0
0
0
0
0
0
0
0
0
0
0
0
-17
