S.157 HA 1985 is designed to give landlord authorities the opportunity to prevent dwelling-houses in National Parks (NPs), Areas of Outstanding Beauty (AONB) and designated rural areas from being sold as second or holiday homes to people who do not have a connection with such areas. S.126 HA 1988 amended s.157 wef 15 January 1989 by widening the restriction to include lettings and licences of such homes.

Where RTB is exercised in relation to a dwelling-house situated in a National Park, or an Area of Outstanding Natural Beauty, or an area designated as a rural area, the landlord authority may impose a covenant limiting the freedom of the purchaser, and his successors in title and any person deriving title under him or any such successor, to dispose of the dwelling-house. The covenant may take the form of a restriction on future sales and lettings etc (s.157(2) and (3)) or a pre-emption covenant (s.157(4)).

SI 1980 No 1345 - The Housing (Right to Buy) (Designated Regions) Order 1980 defines the designated regions in relation to dwelling-houses in England which are situated in a NP or AONB as:-

a. that Park or that area of outstanding natural beauty as the case may be; and

b. so much of the county in which the dwelling-house is situated as is not within the Park or that area.

The order makes specific mention of the Wye Valley AONB and the Isles of Scilly.

Further designations of AONBs made by the Countryside Commission, where confirmed by the Secretary of State for the Environment, are thereafter to be used to define further designated regions in relation to dwelling-houses for the purposes of s.157 HA 1985 by article 2 SI 1980 No 1345.

The designated rural areas in England were made by SI 1981 No 397 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) Order 1981 which came into force on 14 April 1981. These areas are parts of the following districts:-

Alnwick, Berwick-upon-Tweed, Caradon, Carrick, East Devon, Eden, Kerrier, New Forest, North Cornwall, North Devon, Penwith, Purbeck, Restormel, South Hams, South Lakeland, Torridge, West Dorset and West Somerset.

In addition to designating the rural areas the order also defines the designated regions associated with those areas.

Subsequent designated rural areas have been made as follows:-

a. Part of Mid Devon district by SI 1981 No 940 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) (No 2) Order 1981, coming into force on 31 July 1981.

b. Part of North Norfolk district by SI 1982 No 21 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) Order 1982, coming into force on 15 February 1982.

c. Part of Teignbridge district by SI 1982 No 187 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) (No 2) Order 1982, coming into force on 22 March 1982.

d. Part of the Borough of Scarborough by SI 1986 No 1695 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) Order 1986 coming into force on 29 October 1986.

e. Part of the County of North Yorkshire by SI 1988 No 2057 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) Order 1988 coming into force on 22 December 1988.

f. Part of the Borough of West Devon by SI 1990 No 1282 The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (England) Order 1990 coming into force on 19 July 1990.

SI 1980 No 1375 - The Housing (Right to Buy) (Designated Rural Areas and Designated Regions) (Wales) Order 1980 - specifies parts of the counties of Dyfed and Gwynedd as designated rural areas. Special mention is made of the Wye Valley AONB. Designated regions in relation to dwelling-houses in Wales which are situate in a NP, AONB or designated rural area are defined along the lines of para 53.

DVs should identify those dwelling-houses within their areas that are situated in designated regions whether relating to a NP, AONB or designated rural area, and should ensure that any landlord's request for a valuation clearly indicates which of the two limiting covenants it is intended to impose. If an authority intends to impose neither then their request should so state.

Dwelling-houses in designated regions are often in small attractive groups and could be expected to find a ready free market given continued pressure from "outsiders", whether for retirement, second home, commuting or whatever reasons. Where an authority elects not to impose any resale restrictions the s.127 valuation does not present special problems because matching free market evidence will be directly applicable. There will however be the need to pay the closest attention to the application of analysis of supporting comparables, due to the expected variation of quality and location.

The combined effect of a covenant imposed under s.157(2) and (3) and of the appropriate order under the SI is that consent to a disposal cannot be refused if the prospective purchaser tenant or licensee (sole or if more than one person at least one of them) has, throughout the period of three years immediately preceding the application for consent either:-

a. had his/her place of work in a designated region which, or part of which, is comprised in the NP, AONB or designated rural area; or

b. had his/her only or principal home in such a region.

The three year qualifying period can be made up of a combination of time in residence and work in the designated region. The region need not have been the same throughout the whole of the period (s.157(3)) which it is understood should be interpreted as meaning that the boundaries of the NP, AONB, rural area, or the county could have changed during this three year period.

The owner of a dwelling-house to which this covenant applies will therefore always be subject to the possibility that he/she may have to find a purchaser or tenant etc from a restricted market though the possibility of the authority's abandoning the requirement must not be overlooked (s.157(2)). If the landlord authority were to waive the need for consent on disposal then normal marketing could ensue. However some authorities may not be prepared to decide to do so until a prospective purchaser or tenant etc has been found which could delay the sale or letting. If, bearing in mind s.157(6) which

makes void any disposal in breach of covenant, a prospective purchaser's or tenant's solicitor insists on the vendor's or landlord's obtaining confirmation of acceptance of the prospective purchaser or tenant, even of people's prima facie meeting the criteria, delay may occur with consequent complications. But whether all this amounts to a significant burden or not depends on whether the market is really so restricted as not to provide enough competition to make reasonably sure that the dwelling-house will sell/let for the open market price/rent or alternatively whether it may have to be held on the market longer to do so.

It should be noted that the prohibition on disposal by way of tenancy or licence contained in covenant imposed from 15 January 1989 does not apply if the dwelling has hitherto been the only or principal home of the grantor and so remains throughout the duration of the tenancy or licence ie where the grantor is absent for a period without establishing a home elsewhere.

Despite the limitation imposed by the covenant in certain circumstances the number of potential purchasers or tenants etc can be drawn from a very wide area.

For example, The Peak NP is mainly in the county of Derbyshire but parts of it extend into the neighbouring counties of West Yorkshire, South Yorkshire, Staffordshire, Cheshire, and Greater Manchester. In considering the field of possible purchasers or tenants etc of a dwelling-house situate in that part of the NP which lies, for example, in Staffordshire county the following persons can be included provided they have the necessary three year qualification:-

a. Anyone who has his/her place of work or his only or principal home in The Peak NP;

b. Anyone who lives or works in so much of the Staffordshire county as is not within the area of that part of the NP which lies within the county - for instance this would include the Potteries.

The S of S and the Housing Corporation have agreed to the replacement when required of the s.157(2) and (3) covenant by an alternative covenant under s.157(4). This binds the tenant purchasers and their successors in title or the persons deriving title under them or their successors. For the first ten years following purchase they have to offer to sell back the dwelling-house to the landlord authority at the value agreed between the parties or determined by the DV. If the authority declines the offer, or fails to accept it within a month the dwelling-house may be sold in the open market free of the s.157(4) covenant. Whilst the question as to when the time limit runs from is not free from doubt this is a matter for the authority to decide. Any disposal of a dwelling-house in breach of a covenant to offer it back to the landlord authority shall be void - see s.157(6). In giving their consent to the alternative s.157(4) covenant the S of S and the HC may impose conditions under s.157(5).

Where a dwelling-house is to be offered back to the landlord authority in accordance with s.157(4), the valuation basis set out in s.158(2) is that:-

a. the value is to be made as at the time the offer is made to the authority; and

b. the value is to be the price that would be realised if the interest to be re-conveyed or surrendered were sold on the open market by a willing vendor on the assumption that any liability to repay discount on a disposal within three years of purchase would be discharged by the vendor.

Consequently the valuation will be for the property as it stands including the value of tenant's improvement. Regard must be had in the valuation to any rights or burdens that the interest may have. DVs must ensure that they have details of all relevant matters contained in the conveyance of the freehold or grant of the lease of a dwelling-house being offered back, and any additional conditions that the S of S or HC may have imposed under s.157(5).

DVs are authorised to advise landlord authorities on the valuation consequences of adopting either of the two alternative clauses which may be incorporated ie, a restriction on the future sale or letting etc (s.157(2) and (3)), or a right of pre-emption (s.157(4)). Valuation advice may also be provided to authorities for the purpose of s.157(4), for example to assist them to decide whether or not to exercise the pre-emption or to agree the consideration with the vendor. In order not to prejudice the possible

determination role no negotiations should be carried out on behalf of the authority. Any inspection and valuation for the purposes of giving advice authorised under this para should be carried out by a valuer other than the DV or the deputy.

The procedure for determinations under s.158(1) is under s.128 HA 1985 which applies to any question of value arising under Part V of the Act. For general procedure see paras 33-42. Differences are that a determination may be asked of the "district valuer" by a vendor whose dwelling is subject to an extant pre-emption covenant; an authority with the benefit of the covenant; or jointly by both parties. The parties do not have to attempt to agree the value before the DV is asked to provide a determination. There is no prescribed form for serving notice on the DV, but it must be in writing. The four week time limit for representations runs from the date of service of the notice on the DV.

There are no statutory time limits for agreeing the consideration or for providing determinations. However, these cases must be treated urgently so as to avoid any possible criticism by the vendor or by the authority. S.157(4)(b) refers to one month for acceptance of an offer to sell back the dwelling-house by the vendor but it is for the authority to decide from when the time limit runs.

The matter is not free from doubt but the objective is to avoid delay on a sale by the owner.

See also para 44. Reports to authorities for valuation for s.125 notice purposes in respect of dwelling-houses in designated regions must state which of the s.157 limiting covenants has been taken into account in arriving at the consideration, or else that the landlord authority has informed the DV that no covenant is to be imposed. Reports of determinations under s.158(1) should quote this section and that the value has been arrived at in accordance with s.158(2) HA 1985.