Overdue reforms to Right to Buy to ensure the scheme is fairer and more sustainable.
- Reforms to tackle decline in council housing will ensure scheme is fairer and more sustainable
- Plans will address unprecedented pressure on housing supply and protect council housing stock
- Changes will ensure Right to Buy meets the needs of council tenants who aspire to own their own homes, and allows homes sold to be replaced
Overdue reforms to protect and reverse the decline in much needed council housing have been proposed as part of vital updates to the Right to Buy scheme.
The new changes, published for consultation today by the Deputy Prime Minister, will deliver a fairer and more sustainable scheme by continuing to pave the way for longstanding tenants to buy their own homes while at the same time crucially supporting councils to protect and rebuild their depleted housing stock.
Proposed measures include extending the length of time someone has to be a tenant before they can buy their home and protecting newly built social homes from sale through exemptions under the scheme. The consultation is also seeking views on targets for councils to replace stock sold with homes for social rent of the same size and in the same area.
Deputy Prime Minister and Secretary of State for Housing, Angela Rayner said:
"For millions of people in the position I was once in, that first step into the secure social housing that changed my life has become a distant dream.
"Too many social homes have been sold off before they can be replaced, which has directly contributed to the worst housing crisis in living memory.
"We cannot fix the crisis without addressing this issue - it's like trying to fill a bath when the plug's not in.
"A fairer Right to Buy will help councils protect and increase their housing stock, while also keeping the pathway to home ownership there for those who otherwise might not have the opportunity to get on the housing ladder."
The government remains committed to Right to Buy, which is an integral way for social tenants to get on the property ladder, many of whom may not otherwise be able to access home ownership.
But the reforms will make the scheme more sustainable and better value for taxpayers in light of the unprecedented pressures on housing supply. Fewer than 48,000 social homes have been built or acquired using Right to Buy receipts since 2012, despite over 124,000 council homes sold through the scheme across the same period.
The housing crisis inherited by the government has seen the demand for social housing currently at an all-time high, with over 1.2 million people stuck on housing waiting lists as well as record numbers of households, including over 150,000 children, living in temporary accommodation.
That is why the government took decisive action at the Budget to reduce maximum Right to Buy discounts to £16,000 - £38,000 depending on the area. Councils can also retain all of the receipts from sales, including the share that previously went to the Treasury which totalled around £183 million every year. This means councils can better protect their housing stock as well as scale up delivery to meet future housing need.
The government is now seeking views on the next phase of reforming Right to Buy. Proposals in the consultation include:
- Increasing the three-year minimum tenancy period for tenants to be eligible to apply under the scheme.
- Reviewing the current exemptions to the scheme and whether newly built social homes should be exempt for a given period to encourage council investment in new homes.
- Seeking views on the replacement of homes with an emphasis on more social rent homes and if there should be a target to replace all future sales on a one-for-one basis.
- Increasing the period in which councils have the right to ask for repayment of all or part of the discount received when a property is sold from five to ten years.
The consultation is also proposing changes to the minimum and maximum discounts as a percentage of the property value and applying the same rules to both houses and flats. This is in addition to simplifying the receipts system to make it easier for councils to use this money to buy and build more social homes.
Ahead of wider reforms, the government has already taken steps to give councils more confidence to ramp up the delivery of new social homes. This includes increasing the cost floor protection period from 15 to 30 years under which discounts can be limited to avoid the price falling below what has been spent on building, repairing and maintaining properties.
As announced in July, councils now have greater flexibility to use Right to Buy receipts, including the ability to combine them with section 106 contributions from developers, to build and buy more homes. This is alongside £450 million for councils to secure and create homes for families at risk of homelessness.
On top of that, the Budget recently confirmed that government investment in housing will increase to £5 billion for next year. This includes £500 million in new funding for the Affordable Homes Programme to support efforts in delivering tens of thousands of new affordable and social homes across the country.
The government has also confirmed today that it will not be extending Right to Buy to housing associations because of the substantial costs to the taxpayer and the likely reduction in social housing stock.
The consultation will be open for 8 weeks and the government will publish its response in due course.
