The government has announced it will bring forward further reforms to the Right to Buy scheme by tightening eligibility rules and reducing discounts.
This signals their intent to support councils to “better protect and rebuild depleted housing stock while maintaining a responsible route into homeownership for longstanding tenants”.
Right to Buy is a government initiative that allows eligible council tenants in England to buy their homes at a discount. The property must be someone’s main home, be self-contained and have a secure tenancy.
The new reforms that are being brought forward include:
- Increasing the minimum eligibility period from three to 10 years before tenants can apply to buy their home.
- Amending discount rules so that discounts start at 5% of the property value and increase by 1% each year up to the maximum discount of 15% of the property value or the cash cap (whichever is lower).
- A 35-year new-build exemption period, so new social homes cannot be sold under Right to Buy for 35 years after they are built.
Source: GOV.UK
These measures have been designed to ease concerns about the long-term loss of social housing and ensure councils can retain and replace homes sold through the scheme.
Historically, council homes purchased under Right to Buy have outpaced local authorities’ ability to replace them, resulting in social housing shortages.
The government is also undertaking further policy development and analysis to explore more effective fraud prevention. This includes addressing instances in which vulnerable tenants have felt pressured into buying and reviewing how the scheme applies in rural areas.
Councils have also received a further boost in confidence to improve the delivery of new social homes, as the government has reduced maximum cash discounts to £16,000-£38,000, depending on the region. They can also retain all of the receipts from sales and combine them with grant funding to build and buy more homes.
The ‘cost floor’ protection has also been improved, extending the period from 15 to 30 years. This means landlords can limit discounts so homes aren’t sold for less than the amount spent on building, repairing and maintaining them.
However, it’s worth noting that all of these changes will only be brought forward “when Parliamentary time allows”.
Commenting on the announcement, Peter Luck, Managing Director, ROCC, said: “These changes are long overdue, so I’m pleased to see more is being done to better protect and rebuild social housing across the country.
“In the past, council homes have been purchased under Right to Buy at a much faster rate than local authorities have been able to replace them, but these reforms are certainly a step in the right direction to addressing this imbalance.
“By bringing forward these measures, the government is showing a stronger commitment to making the Right to Buy scheme fairer for everyone and preserving affordable housing for future generations.
“The challenge now will be ensuring councils continue to have all the resources and long-term support they need to replace housing stock and meet growing demand.”
