Housing Minister Brandon Lewis today (20 March 2015) pledged to protect the Right to Buy of thousands of tenants whose councils are attempting to side-step the scheme.
The government reinvigorated the Right to Buy in 2012 by increasing the discounts to make a real difference to tenants looking to buy their social home.
But some councils are denying their residents the chance to take up this opportunity by creating housing companies to build and manage new homes.
This means those residents are no longer eligible for the scheme because they are not considered to be council tenants - despite the council’s company acting as landlord.
Housing Minister Brandon Lewis said:
I applaud any efforts made by councils to build new affordable homes for their local communities, and with council house building starts at a 23-year high more are doing just that – but this should not be at the expense of their tenants.
The actions of a handful of councils mean the Right to Buy for some tenants is now under threat – I will not support any council setting up a housing company unless their tenants continue to have the chance of having a Right to Buy.
Safeguarding the Right to Buy
House building is an important part of the government’s long-term economic plan – and building by councils is now at a 23-year high.
Since Right to Buy was reinvigorated, nearly £730 million in sales receipts have been reinvested in affordable house building – with another £1.7 billion set to be levered in over the next 2 years.
And council house building starts are at a 23-year high, with almost twice as many council homes built over the last 4 years than from 1997 to 2009.
But some councils are looking to side-step this scheme altogether – by creating a housing company to build and manage new homes, the tenants who move in are not renting their homes from the council and are therefore not eligible for the Right to Buy discounts.
This means people who should be able to benefit from the discounts would not be.
Mr Lewis today warned that he would not support any council that in setting up a housing company denied their new tenants the Right to Buy they should be entitled to.
Ensuring more tenants benefit from Right to Buy – and more homes are built
Since 2010 over 204,000 households have been helped to buy or reserve a new home through government-backed schemes.
That includes nearly 33,000 households who have bought their social home through the reinvigorated Right to Buy scheme, benefiting from discounts of up to £77,000 outside London and £102,700 in the capital.
Measures in the Deregulation Bill currently before Parliament will ensure even more people benefit from the Right to Buy.
Currently a tenant needs to be in social housing for 5 years before qualifying for the scheme – but under proposed changes to the scheme, this will be reduced to 3 years, ensuring thousands more tenants are eligible.
Right to Buy discounts increase by inflation each year, and are due to rise this April from £77,000 outside London and £102,700 inside London to £77,900 inside London and £103,900 outside.
The government is also ensuring more homes can be built using the sales receipts generated – new rules mean councils can now pool the funding they collect so they can build even more affordable homes, and across council boundaries.
Brandon Lewis has today (20 March 2015) issued a written ministerial statement to Parliament on this issue.