Social and Affordable Housing

Wednesday 20th November 2024 Written Statements

[The Secretary of State for Housing, Communities and Local Government (Angela Rayner)]

I am publishing today a consultation on reforms to the right to buy in England.

This Government are committed to the biggest increase in social and affordable house building in a generation and to supporting councils to increase their capacity to build.

After more than a decade of marginalisation, we must once again assert the necessity and the value of social housing. It is a crucial national asset to be proud of, to invest in, to protect and to maintain.

We cannot achieve this while councils are losing homes quicker than they can replace them through the right to buy scheme. Nor can we achieve this while councils risk losing their investment in a newly built social home as soon as three years after completion. Between April 2012 and March 2024 there have been over 124,000 council right to buy sales, and in the same period fewer than 48,000 homes have been replaced.

Reduced access to affordable social rented homes has seen millions of low-income families forced into insecure, poor quality and unaffordable accommodation. Over 150,000 children are now in temporary accommodation and nearly 1.3 million people on social housing waiting lists. The cost of this has been borne not only by those low-income families unable to secure a social home, but by the taxpayer in the form of a rapidly rising housing benefit bill. This is unsustainable and represents a poor use of public money.

This Government remain committed to right to buy, which is why we are not proposing its abolition. It is an integral way for social tenants to get on the property ladder, many of whom may not otherwise be able to access home ownership. But crucially we also need to protect social housing stock to meet future housing need, to support councils to replace homes that are sold and to improve their confidence to scale-up delivery.

The scheme must be reformed so that it better protects the existing stock of social rented homes, provides better value for money for the taxpayer and ensures fairness within the system.

We have already taken significant steps to deliver this reform. In July, we increased the flexibilities on how councils can use the capital receipts generated by a right to buy sale to accelerate the delivery of replacement homes.

The Government, at autumn Budget, confirmed that councils will no longer be required to return a proportion of the capital receipt generated by the sale of the home to HM Treasury, which has totalled c.£183 million a year. This will ensure that councils are better able to build and acquire new council homes to meet local housing need.

The Government also confirmed at the autumn Budget the reduction of maximum right to buy cash discounts to their pre-2012 regional levels—ranging from £16,000 to £38,000—following a review conducted by the Ministry of Housing, Communities and Local Government. Secondary legislation was laid on 30 October and new discounts will come into force tomorrow. This is a crucial step in delivering a fairer, better value and more sustainable scheme. Reducing discounts will protect existing social housing stock, while ensuring long-term tenants can still benefit.

Through the same secondary legislation, we are increasing protections for newly built social homes from being sold under the right to buy, by increasing the “cost floor” period during which discounts can be reduced to account for money spent building or maintaining the property from 15 years to 30 years. This will give councils greater confidence to scale-up delivery of social homes for those who need them most.

But these measures are only part of the reform needed to achieve a fairer and more sustainable right to buy scheme. The eight-week consultation, which I am launching today, proposes the broader reforms necessary to ensure that the right to buy is sustainable and meets the needs of tenants who aspire to own their own homes, while also ensuring that the homes sold can be replaced. We are seeking views on:

Eligibility—we propose to increase the eligibility requirement (currently three years as a secure tenant) to support councils to rebuild the stock of council homes and to better ensure that long-term tenants who have lived in, and paid rent on, their social homes are able to own their home through the scheme.

Discounts as a percentage of the property value—we propose to amend the current percentage discounts to better align with the new cash discounts and propose that the same rules should apply to houses and flats.

Exemptions—we are seeking views on whether the current exemptions to the scheme are fit for purpose and whether new build homes should be exempt from the right to buy, for a given period, to better incentivise councils to invest in new stock. We also welcome views on how to protect council investment in retrofitting and improving homes to a high standard.

Restrictions on properties after sale—once someone has purchased a home under the right to buy, it is theirs to live in and enjoy, the same as any home purchased on the open market. We do not therefore propose to introduce covenants to prevent homes being let out, which we think would be restrictive and too difficult for councils to administer. We are seeking views, however, on whether the time period in which the council has the right to ask for repayment of all or part of the discount received should be increased from five to ten years.

Requirements around the replacement of homes sold under the right to buy—we are seeking views on the benefits of replacement homes being for social rent to support the Government’s ambition to increase the number of social rent homes and whether replacements should be, as far as possible, of the same size and in the same area.

Simplification of the receipts regime—we are seeking views on how the current system can be simplified and strengthened to support the replacement of homes.

Through this consultation, we will better understand what barriers there may be to the introduction of these proposals and to inform their design. Subject to views in response to this consultation, we intend to bring forward legislation to implement any changes when parliamentary time allows.

I can also confirm today that the Government will not be extending the right to buy scheme to housing associations given the substantial costs to the taxpayer and the reduction in social housing stock that is likely to result. Eligible tenants will, however, continue to be able to buy their rented home at a discount, ranging from £9,000 to £16,000 depending on where their rented home is located, through the right to acquire scheme.

Further, I can confirm that the Government will not be taking forward the policy on the sale of higher-value assets proposed under the Housing and Planning Act 2016, which would have required councils to make a payment in respect of their vacant higher-value council homes and return some of the funds to the Government. The Government will repeal the provisions in the 2016 Housing and Planning Act when parliamentary time allows.

I look forward to continuing to work with all those with an interest in improving the system to make sure that these plans for reform are robust and deliverable.

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