To ask the Secretary of State for the Environment if he has any proposals to introduce legislation to amend the rules in the housing defects legislation, which determine whether eligible owners receive reinstatement grant or repurchase; and if he will make a statement.
We have been consulting local authority associations, home owners groups and other interested bodies on the suggestion that "test d" of section 538(1) of the Housing Act 1985 be dropped. That test requires an authority to repurchase if the direct cost of that is any less than the alternative cost of housing defects grant.In the light of consultees' responses, which generally supported the change, 1 have decided that "test d" should be removed from section 538(1) and we will shortly be laying an appropriate order before Parliament to achieve that. The order must be affirmed by resolution of both Houses, but I hope that it will be possible to have it in operation by June. This change will not affect the Act's other "value for money" test which will continue to require an authority to satisfy itself that reinstatement is justified, having regard to the likely freehold value of the property after repair.Removal of "test d" will give local authorities and home owners some welcome additional flexibility. As things stand, owners have to have their homes repurchased, even where they and the authority would prefer repair, whenever the cost of repair would exceed that of repurchase, even when the margin is very narrow. This change will allow repair where there is agreement this makes sense and is in accordance with the Act's other value-for-money test ("c").Section 538(4) of the Act provides that such an order does not affect an application for assistance made before the order comes into force. However it is open to owners, if they choose, to withdraw their existing applications and then submit fresh ones, if they wish to take advantage of this change. Owners who are interested in this may therefore wish to discuss the position with their local authority.