The consultation paper, announced in February's Communities Plan, aims to save time and money by standardising much of the transfer paperwork (see "Key measures", below).
Inge Kettner, finance director of Whitefriars Housing Group and a member of the ODPM working group that produced the study, said: "Very little of the transfer agreement is not standard, so why are we paying lawyers to do new ones? For a find-and-replace on previous agreements, they're making £50,000 every time."
The review comes as more financially complex transfers in the 2003 programme – such as estate-by-estate transfers in London's Lambeth and Tower Hamlets – get closer to a vote.
The paper suggests that associations meet the cost of bills from lenders, rather than adding them to the transfer costs to be paid by the government.
The change would give associations an incentive to negotiate lower transfer fees, thus saving the government money.
It also recommends that the valuation of a council's stock, which is calculated using a government model, be used as a baseline figure rather than a fixed asking price. The price could then be pushed up by competition.
However, Kettner said some of the plans, such as abolishing the rule that associations must have 30 years of funding in place at transfer, would not make much practical difference.
The consultation closes on 12 January. Any changes will be put in place by April.
key measures: what the working group recommends
- Standard agreements, which could save time and reduce legal fees
- Funding advisers and new finance directors to be involved earlier
- The quality of funding advice to play a bigger part in the Housing Corporation’s decision to register a transfer
- If the options appraisal is signed by the government office and transfer criteria are met, the council gets a place on the programme
- Councils to set up a good-quality central stock database
Source
Housing Today
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