27th May 2015
The Government is extending the Right to Buy scheme to give 1.3 million housing association tenants the chance to buy their homes.
The changes come as part of a new Housing Bill introduced in the Queen’s Speech today.
Speaking yesterday, ahead of the Queen’s speech which took place this morning, Housing Minister Brandon Lewis said: “Anyone who works hard and wants to get on the property ladder should have the opportunity to do so, which is why tomorrow’s Queen’s Speech will include measures so a million more people have the chance to do exactly that.
“And with housing starts at their highest since 2007, we’ll take steps that will get workers on sites and keep the country building.”
The Government says that vast majority of people want to own their own home and claims it has helped more than 200,000 households to do so since 2010 through government-backed schemes.
Discounts available under the Right to Buy were significantly increased in 2012, and currently stand at a maximum £77,900 outside London and £103,900 in the capital.
But this only applies to those who live in council housing, or whose homes have transferred from a council to a housing association.
The Housing Bill will enable any social tenant to buy their home would to have the opportunity to do so at the same levels of discount – regardless of whether they live in a council or housing association property.
The Government claims its Right to Buy policy will increase house building and reduce social housing waiting lists, allowing housing associations to use the revenues from sales to invest in more affordable housing.
It says that rather than one rented property there will be two properties, an old one with a new homeowner, and a new one available for those in need on the waiting list.
To fund this policy the Housing Bill will also require councils to sell their most expensive housing when it falls vacant – with the receipts used to provide new affordable homes in the same area, and the surplus used to fund the Right to Buy for housing association tenants.
The Government has also announced plans to deliver 200,000 new Starter Homes across the country.
These new homes will be sold with a 20% discount to first-time buyers under 40, with the Housing Bill paving the way to ensure this process can be completed quickly.
A new register of brownfield land will also help fast-track the construction of new homes on previously-used sites near existing communities.
A Right to Build in the Bill will also help increase housing supply and diversify the housing sector by giving people the right to be allocated land with planning permission for them to self-build or commission a local builder to build a home.
Self-build delivers a majority of homes in many other countries and can act as a boost to smaller and medium sized builders.
The Government says that Right to Build will offer support to aspiring self-builders, by requiring councils to identify, and release “shovel-ready plots” so people don’t have to wait years to get work underway.
It say neighbourhood planning – already benefiting almost 1,500 communities with more joining them each week – will be streamlined and sped up.
The government has already announced plans to extend the Help to Buy: equity loan scheme to 2020.
Shelter’s view: Social housing is not being replaced quickly enough
John Bibby has written a blog for Shelter about what the Government’s Right to Buy extension means for the housing market.
He says: “You could call it selling off two affordable homes for the price of one. And at a time when the country has a massive and recognised shortage of affordable homes, stepping up sales of the existing limited supply, to subsidise further sales, might seem like a strange response.
“But the government has also made a promise that every affordable home sold will be replaced. They’ve said that the money raised from the council home sales will be enough to: pay for the discount, rebuild both homes in the area they were sold, pay off some debt and even leave money for a brownfield decontamination fund.
“So what’s the problem? Housing association tenants get the Right to Buy, and every affordable home gets replaced: surely this a policy that pleases everyone, no?
“Well, when the policy was announced as part of the Conservative manifesto, Shelter and the Institute of Fiscal Studies were among those who pointed to the government’s record on replacing Right to Buy homes under the current scheme – which has been a rank failure.
“Across the country work has only started on 1 in 10 of the council homes that have been sold since the replacement scheme was introduced: work by the Chartered Institute of Housing suggests that only a minority ever will be. And in some parts of the country it looks much worse.
“Probably the hardest hit by the failure to replace Right to Buy homes is the heart of the Northern Powerhouse itself, Greater Manchester, and the conurbation’s experience should set off screaming alarm bells about what may happen under the new scheme.
“863 social rented homes have been sold in Greater Manchester since 2012, when the promise of one-for-one replacements was first made. Yet of those only two have been replaced: two connected semis on a cul-de-sac in a Wigan suburb.”