The Prime Minister has confirmed an extension of the popular Right to Buy
scheme, which has made home ownership a reality for two million households
since the 1980s.
Currently, tenants in council homes are eligible to buy their homes at a
discounted price, up to 70% off the market value dependent on how long they
have lived there. However, the scheme is less generous for those in homes owned
by housing associations.
Extending the scheme could benefit up to 2.5 million tenants who would gain
the right to buy, freeing them up to become homeowners, and add value and make
improvements to their home as they wish. The Government will work closely with
the housing association sector on the design of the scheme.
“Just as no generation should be locked out of home ownership because of
when they were born, so nobody should be barred from that same dream simply
because of where they live now,” said Boris Johnson.
“For four decades it has been possible for council home tenants to use a
discount to buy the property they live in.
“Over that time almost two million people have been helped into home
ownership.
“They have switched identities and psychology, from being
dependent on the state for every repair – from damp-proofing to a new front
door – to being in charge of their own family home, able to make improvements
and add value as they please.”
However, the announcement has received a lukewarm response
from the wider industry and key stakeholders with many confused about the direction the Government
is taking.
Kate Henderson, Chief Executive of the National Housing Federation, says: “Housing
associations’ priority is to provide homes for the 4.2 million people currently
in need of social housing in England - this includes 1 in every 5 children,
many of whom are living in overcrowded conditions or homeless in B&Bs and
other temporary accommodation.
“Right to Buy pilots have shown that there is not enough money from sales to
build new social homes to replace those sold, meaning a net loss of social
housing.
“We support measures to help people buy their own home and housing
associations already build thousands of homes for shared ownership every year,
helping people take their first steps onto the housing ladder. However, we are
deeply concerned about the long term impact of Right to Buy and any loss of
social housing will make the challenge of providing homes for those in need
even harder.
“We will, of course, engage with the government and are keen to understand
the detail about the proposed extension of Right to Buy to housing association
homes.”
The Local Government Association points out the number of new council homes
being built is not able to keep pace with those sold under Right to Buy, and
the discounts available, along with the funds that have to be returned to
Treasury, are leaving councils with less and less resources to catch up.
Cllr David Renard, housing spokesperson for the LGA, said: “Owning your own
home is an important step for many people, and an extension of the Right to Buy
scheme to housing associations tenants could enable many more to get on the
housing ladder.
“However, measures that support homeownership should not lead to any
reduction in the overall number of affordable social rented homes. Any houses
sold must be replaced quickly, in the same local authority area and on a like
for like basis. Equally, the cost of discounts must not be funded from the sale
of council housing stock, nor be met from existing government funding
commitments for delivery of additional affordable homes.
“The Right to Buy scheme for council tenants also needs urgent reform and
councils need to be able to keep 100 per cent of receipts and set discounts
locally. The number of new council homes being built is not able to keep pace
with those sold under Right to Buy, and the discounts available, along with the
funds that have to be returned to Treasury, are leaving councils with less and
less resources to catch up.
“With over 1.1 million households currently on social housing waiting lists,
any loss of social rented housing would risk pushing more families into the
private rented sector, as well as driving up housing benefit spending and rents
and exacerbating our homelessness crisis at a time of an escalating cost of
living crisis. We need to be urgently increasing, not reducing the supply of
affordable social homes.”
Clive Betts, Chair of the Levelling Up, Housing and
Communities Committee, said the PM needs to make clear that if the Government
presses ahead with extending the right to buy for those renting housing
association properties, it is vital the money goes back into the system of
social housing so that new homes can be made available for low-cost rent and
purchase.
“The success of
an extended Right to Buy policy will surely depend upon the homes sold being
replaced and the housing supply being maintained,” he continued. “I hope the
Government will explain how this policy will safeguard the provision of
accessible and affordable housing, particularly affordable rented property.
“It’s important the Government comes forward with more
detail on this housing policy to back up the PM’s words. Extending Right to Buy
will not be a cost-free policy, so further detail on how this is to be funded and
how it will provide for the construction costs of new homes is essential. Those
who need low-cost homes should not pay the price of this policy. The Government
should commit to ensuring current social housing is replaced on a like-for-like
basis - a house that is sold should not be replaced by a flat.
“The Government will also need to explain how it will
overcome the legal hurdles of forcing housing associations, who are independent
bodies, to sell their assets. The Government should also indicate whether they
intend to require the agreement of housing associations in implementing this
policy.”
