Could housing associations proactively use the Right to Transfer?

The push for the creation of a statutory Right to Transfer (RTT) undoubtedly came from tenant management organisations (TMOs) stymied by uncooperative local authorities.  It is no surprise therefore that it is TMOs in the vanguard of the first wave of RTTs. However there is nothing in the RTT regulations that requires tenants to be part of a TMO, all council tenants in England have the right.

What do you need to get started?

All you need is a “Tenant Group” with a written constitution and a membership of 20% of the tenants in the area concerned.  The area in question must be “geographically coherent” (no pepper potting allowed) and contain at least 100 secure tenancies.  This is hardly an onerous starting position, particularly as many areas will have a tenants & residents association that may already meet the requirements or be able to do so with a bit of a membership drive.  So there are hundreds of tenant groups who could potentially avail themselves of the RTT.

Fine in theory, but it’s going to cost you

Having the RTT is great, but in practice it requires quite a lot of money to go through the process.  If there are hundreds of homes involved then something as simple as a mail-out to every tenant will cost hundreds of pounds. If professional advice is taken – and it is almost certainly needed then this will cost thousands.  Tenants may be able to obtain Tenant Empowerment Programme funding from DCLG and which is very helpful, but is won’t cover all of the costs.

In Bushbury Hill, being a well established TMO we have a lot more resources in terms of staff, equipment, access to information, office space, and money than a  tenant & residents group would have.  We are in a position to commission a stock condition survey and structural survey, which would be impossible for other tenant groups.  It is very unlikely that a council that is not keen to transfer its stock is going to start paying for anything it is not required to.

So who else will pay?

Who has both the operational expertise and financial clout to be able to help tenants make their vision a reality?  This seems an ideal opportunity for enterprising housing associations to get in on the ground floor and help tenants drive RTT proposals.  There is nothing in the regulations to stop a tenant group making its proposed new landlord choice up front and then using the resources of that landlord to get through the RTT process.  The housing association would be operating at risk, but then that is always the case with stock transfers and the sums involved, whilst out of the question for tenants, are not huge for a housing association.  There are clearly advantages to both tenants and the new landlord in going through the process together – it allows for the building of relationships and trust prior to the all important transfer ballot.

Have we been here before?

Those with long memories will note the similarities with “Tenants Choice” brought in by the Housing Act 1988 which allowed tenants to pick a landlord.  At the time this created a lot of fear amongst local authorities that housing associations were going to cherry pick their best stock.  In reality very few transfers ever took place in the seven years it was active – in England & Wales it amounted to five transfers involving only 1470 homes (Derrick Tulloch, 2000).  However it did indirectly lead to a massive increase in  whole stock voluntary transfers, as well as an increase in tenant activism and the Right to Manage.  The threat of losing their stock to other landlords also acted as an stimulus for some council’s to raise their game and engage with tenants seriously.

Opportunities for enterprising housing associations

Unfortunately, 18 years after Tenants Choice was killed, there are still council landlords who provide rotten service and allow tenants’ homes to remain non-Decent (a scandal in itself).  Not only does this give tenants every reason to look for a better landlord, but surely provides opportunities for enterprising housing associations to offer to partner with tenants to use the Right to Transfer to deliver proper investment in their homes and a high performance housing management service.

No doubt there are housing associations out there with a good reputation with tenants, operating in localities where council tenants are putting up with a third rate service from their council.  RTT opens the way for them to approach tenants direct and proactively make a pitch.  The housing association could offer to support a tenant group to build up membership, campaign for support from their community and support tenants through the RTT process.

The tenants may have everything to gain and the housing association can achieve growth with relatively little risk.  Local authorities may still view it as cherry picking, but they’ve had a couple of decades to get their own house in order, if some have failed tenants in this time then shame on them.

PS this blog is written from a personal perspective and is entirely unofficial, albeit that I work for an organisation that is currently going through the RTT process.  What I write is opinion and I make no apology for having a pro-tenant slant, working directly for tenants will do that. I do however aim to be factually accurate, so if you do come across any mistakes in my posts, please let me know and I’ll check and update as necessary.  All comments and feedback and are welcome.

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5 thoughts on “Could housing associations proactively use the Right to Transfer?

  1. Bob Smoczkiewicz

    Interesting reading, and I wish your EMB all the best. I do however question why you think housing associations are better than council landlords? Lots of them are no better and charge MUCH higher rents than councils. In stafford, then council transferred their stock and now a 3 bed house is a couple of pounds short of £ 100 a week! And a lot of homes didnt have new kitchens bathrooms etc fitted after transfer. Whats the main reason in your EMB wanting to stop having the council as a landlord? 🙂

    Reply
    1. Bill Heywood Post author

      Taking your last point first, we want to transfer because tenants are getting a rotten deal. In the last 5 years their rents are up by 27% but the money they get to spend on their repairs & housing management service is up <2%. Allowances to the EMB are frozen for the next 5 years, meaning real terms cuts whilst rents continue to rise. Planned capital investment is also laughably low for the next 10 years. The tenants view transfer as the only realistic way to ensure their EMB stys financially sound and deliver reasonable investment in their homes in the short and long term.

      It is not a question of preferring HAs to LAs, there are good and bad in both sectors. For Bushbury Hill and other tenant groups pursuing the Right to Transfer, the opportunity is to pick from the best in the HA sector.

      With regards to rents, Gov't guidelines will now restrict councils and HAs to the same CPI+1% rent increase. So tenants will experience the same rent rises whether they stay with the council or transfer.

      It is pretty much a truism that TMOs exist largely where the council landlord has failed in some respect. It needs a strong motivation for tenants to want to set up a TMO in the first place. If your council landlord is doing an excellent job, why would you bother considering the Right to Transfer?

      Sadly some council tenants are stuck in non-decent homes with badly performing landlord services. In such situations the Right to Transfer offers an escape route.

      Reply
      1. Bob

        I wish you best of luck then. Im lucky as cannock council are a very good landlord and with regard to rents they told walsall tenants rents would remain affordable etc, have you seen the extortionate rents whg charge now for ex council stock? But if you’ll get extra investment it might be worth it in the long run

  2. Pingback: Choosing a transfer partner | Right to Transfer

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