Right to Buy
The Right to buy
Announced a couple of weeks ago and reiterated in the
Government's Housing Strategy is a reinvigoration of the Right to
Buy for Council tenants, with larger discounts proposed. This
currently applies to council tenants and tenants of homes
transferred from local authorities to housing associations who have
a ‘Preserved’ Right to Buy.
As Right to Buy in its earlier manifestations led to a dramatic
reduction in social housing stock, we remain cautious about this
initiative. Our primary focus is to increase the supply of
affordable housing. We therefore welcome the Government’s
pledge that for every home bought through Right to Buy a new
affordable home will be built, but are not sure that the financing
arrangements announced so far will have this result. We would
like to see the scope of the Government’s pledge extended to ensure
that every Right to Buy sale results in a replacement home with a
similar number of bedrooms and that new homes are built
where the need for affordable housing is greatest.
The notion of replacing each sold home with a
new affordable one is a laudable aim and represents an opportunity
unfortunately not exploited the first time Right to Buy was
launched. We anticipate that take up of the scheme is likely
to be lower than previously where lower house prices and greater
mortgage availability made this an attractive offer to many
tenants. We have concerns that there is some risk attached
for the overall housing stock in the short-term as the time lapse
between sale and new homes being completed could be
significant.
The new strategy states that discounts will be
increased to up to 50% of the value of a house and up to 70% of the
value of a flat. For Council Housing the Government has already
said that 75% of receipts from Right to Buy are to be paid directly
to the Treasury. We have separate financial agreements with
Local Authorities concerning proceeds derived from the sale of any
of the properties which were transferred from them. We also
face the significant obstacle of justifying charitable assets being
sold at below their value. We would like to see evidence that
the financial model is both viable and sustainable.
As the proposals currently stand, the Right to
Buy will only apply to those of our homes transferred to us from
local authorities which are subject to the ‘preserved right to
buy’. We would strongly oppose any extension of the Right to
Buy to the remainder of our stock. As an independent, charitable
housing association we do not believe it would be in any way
appropriate to be forced to dispose of our assets at less than
their value, many of which were provided as a result of the
charitable legacy of our founder.