The announcement this week of a dowry to fund financially unviable stock transfers will throw a lifeline to councils and tenants in many inner cities. The new fund is to be used to bridge the funding gap left when the cost of refurbishing transferred homes is more than they are actually worth, making it nigh impossible for a transfer to go ahead (page 11).

It ranks as a successful bit of lobbying for the sector, particularly for Steve Stride, chief executive of 5000-home transfer landlord Poplar Harca, who convinced the government that vast tracts of social housing across London and other areas of the South-east would not meet the decent homes standard if this funding tool was not conjured up. It has to be said that he was pushing at an open door: it was largely ignored, but the ODPM pledged in its Communities Plan to explore ways of funding negative transfers and had asked the sector to come up with ideas.

Stride's proposal was for funding that could be used in areas where demand for housing was high but the quality poor, so that landlords would undertake development and use any profit to pay back the cash. What the ODPM is proposing is actually more straightforward and universally applicable: there are no strings attached.

Stride called for a £1bn fund to be set up. So far, the ODPM has not put a figure on the sums available. Whatever the final headline, the dowry is unlikely to prove a massive up-front burden for the government, and there is a fair chance that the cash will be shunted from other budgets where there is currently some underspend.

The dowry provides the biggest reminder yet that stock transfer is still – in the government’s eyes – the biggest game in town

As well as providing a much-needed replacement for the popular Estates Renewal Challenge Fund, the new initiative provides the biggest reminder yet that stock transfer is still – in the government's eyes – the biggest game in town. The fact that transfer has been hitting the buffers at the same time as arm's-length management organisations have experienced a meteoric rise thanks to the £2bn they got from the Communities Plan may have lulled councils into a false sense of what the government's priorities are.

ALMOs may be a relatively painless way of modernising council services but they are also cash-hungry. The topped-up tank has already been drained dry and we're only at the fourth round. This in itself left a couple of disappointed customers, with 12 of the 14 bidders being given ALMO status. And this week Whitehall delivered a stark reminder that ALMOs are still public bodies as their homes are council-owned (page 7). It is unlikely they will ever get the freedoms they craved to borrow money against rent or to build new homes in the same way as housing associations. These are the first signs that, as far as ALMOs are concerned, the brakes are now on.

Source

Housing Today