What is the future for social housing: reflections on the public sector provisions of the Housing Act 1996

Date01 November 1997
Published date01 November 1997
What is the future for social housing: reflections on the
public sector provisions of the Housing Act 1996
James Driscoll*
During the period of Conservative government from 1979 to 1997, scarcely a year
seems to have passed without the enactment of new legislation on housing or
housing related matters. The year 1996 was no exception. With the passage of the
Housing Act 1996, many of that government’s housing proposals which were first
set out in a White Paper published in 1995
came into being. Other proposals made
there were implemented in the Housing Grants, Construction and Regeneration Act
while the Finance Act 1996 contains the ‘housing investment trusts’
provisions which were also foreshadowed in the White Paper.
Despite the change
of government in May 1997, this housing legislation may very well prove to be at
least as significant as the Housing Act 1988.
In some respects it may eventually be
seen as the most important legislation on this subject since the previous
government’s first housing legislation, the Housing Act 1980.
The Housing Act 1996 consists of 233 sections and 19 schedules and this tells
only part of the story since the Act has also spawned a myriad of secondary
legislation and codes of guidance and practice.
Most of the provisions affect
public sector housing, though there are some significant private sector measures,
notably those which affect assured tenancies and long residential leases. This note
considers the public sector provisions of the Act. After examining the background
to the legislation, it then deals in turn with the new provisions governing housing
associations, the revisions to local authority responsibilities over houses in multiple
occupation, and the new local authority powers aimed at combating nuisance
The Modern Law Review Limited 1997 (MLR 60:6, November). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA. 823
* South Bank University (London).
1Our Future Homes Cm 2901.
2 Part I introduced a new scheme for the making of housing grants by local housing authorities.
Renovation grants are no longer mandatory; landlords may be eligible for grants for dwellings in
renewal areas and a new ‘Home Repair Grant’ replaces the minor works grants provisions contained
in the Housing Act 1985. Although the government claimed that these measures would ensure that
publicly funded grants would be targeted more effectively, the main motivation would appear to have
been a cost cutting exercise. This took place at a time when a recent Housing Conditions survey
showed that 1.5 million dwellings were statutorily unfit for habitation, another 3.9 million were in
need of major repairs whilst a further 13.1 per cent of dwellings needed £3,000 or less to be spent on
repairs: English Housing Conditions Survey (London: Department of the Environment, 1993).
3 Finance Act 1996, s 48 and Sched 8. These trusts are companies which are set up to own and manage
dwellings for rent entitling the company to exemption from capital gains tax on the sale of a dwelling
and also entitling the company to pay a reduced rate of corporation tax. Those investing in such trusts
cannot become involved in managing the dwelling. One of the conditions for setting up such trusts is
that they may only let on assured tenancies and not on assured shorthold tenancies.
4 For a general account of this legislation see J. Driscoll, A Guide to the Housing Act 1988 (London:
Format Publishing, 1989).
5 See, for example, the Code of Guidance on Parts VI and VII of the Housing Act 1996 (London:
Department of the Environment, 1996).
behaviour. Attention then turns to the most contentious parts of the Act, those
dealing with the allocation of public sector tenancies and the reductions in the
duties owed by local authorities to the unintentionally homeless. The note
concludes with a summary and critique of the Act’s public sector provisions and an
assessment of the future direction public sector housing may take.
The 1979–1997 Conservative government’s public sector housing legislation and
the policies underlying it have been the subject of previous notes in this journal.
This section of this note, therefore, only briefly traces the main elements of the
previous legislation as it forms the background to the public sector housing
provisions in the Housing Act 1996. Landmark legislation appeared in 1980 with
the passage of the Housing Act of that year. This legislation is probably best
remembered for the creation of a statutory right to buy for council tenants. Another
important feature of that Act was that it introduced a system of statutory security of
tenure and other rights for tenants such as the right to exchange tenancies, the right
to sub-let with the consent of the landlord and the right to have a lodger.
Sale of
council houses under this right to buy has proved to be the most successful priva-
tisation of publicly owned assets, at least in financial terms. Estimates show that
over 1.5 million council dwellings have been sold under the right to buy and that
this has generated some £26 billion in capital receipts, thus eclipsing all the other
major privatisations, including those of British Telecom and other public utilities.
Another measure designed to privatise local authority housing was that which
provided for large-scale voluntary transfer under which local housing authorities
have been encouraged to transfer parts or all of their housing stock to the private
More than 40 local authorities have divested themselves of their entire
stock in this way.
Other ways in which the previous government attempted to
privatise housing were through the so-called housing action trust and change of
landlord provisions which were introduced by the Housing Act 1988.
policy has been particularly productive. For example, only six housing action trusts
have been set up in the years following the Housing Act 1988
whilst the change
of landlord provisions, designed to allow council tenants to opt for a private
landlord, has been an expensive failure. Only 982 tenants have transferred to the
private sector in this way.
It was scarcely surprising, therefore, that the Housing
Act 1996 has repealed the change of landlord provisions in their entirety.
Notwithstanding these policies, local housing authorities remain the largest single
landlord in the country with 22 per cent of households renting their homes from
6 See J. Driscoll, ‘Public Housing after the Local Government and Housing Act 1989’ (1991) 54 MLR
Sector Housing Provisions’ (1994) 57 MLR 788.
7 For a general account see D. Hughes and S. Lowe, ‘Social Housing Law and Policy’ (London:
Butterworths, 1995) ch 3.
8 See S. Wilcox, Housing Review 1996/7 (York: Joseph Rowntree Foundation 1997) 45.
9 Under the powers contained in the Housing Act 1985, ss 32 and 43; see D. Mullins, P. Niner and M.
Riseborough, ‘Large Scale Voluntary Transfers’ in P. Malpass and R. Means, Implementing Housing
Policy (Buckingham: Open University Press, 1993).
10 More choice in the social rented sector (London: Department of the Environment, 1995).
11 Housing Act 1988, Scheds 3 and 4.
12 See Kahn, ‘Remodelling a Hat’ in P. Malpass and N. Means, n 9 above.
13 See J. Driscoll, A Guide to the Housing Act 1996 (London: Butterworths, 1996) 2.
14 Sched 18 para 1.
The Modern Law Review [Vol. 60
824 The Modern Law Review Limited 1997

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