Social Housing Bill [Lords]

Matthew Pennycook Excerpts

2nd reading
Thursday 10th September 2026 Commons Chamber

[The Minister for Housing and Planning (Matthew Pennycook)]

I beg to move, That the Bill be now read a Second time.

Good housing is the foundation of a flourishing life. Decent, safe, secure and affordable homes provide a platform for families to live, grow and build a better life. They make for stronger, healthier and happier communities. Everyone—and I mean everyone—deserves to have one. Yet, as we all know, far too many families in need across the country are languishing on social housing waiting lists, struggling in the private rented sector or in expensive temporary accommodation as a result, and driving up rents and the housing benefit bill in the process. At the same time, the ability and willingness of councils to invest in the building of new social rented homes has been undermined by the steady and significant loss of existing stock through the right to buy scheme.

It was for those reasons that the Government committed in our manifesto to delivering the biggest increase in social and affordable house building in a generation, prioritising the building of new social rented homes, enhancing protections for existing and new build social housing, and supporting councils and housing associations to make a greater contribution to affordable housing supply. In the 26 months we have been in office, we have faithfully sought to honour those commitments, making the biggest long-term investment in social and affordable housing in recent memory, vigorously prioritising social rented housing, rebuilding the capacity of councils and housing associations to borrow and invest in new and existing homes, reinvigorating council house building, and taking initial steps to better protect existing stock.

The Bill supplements those efforts. It builds on the funding and regulatory certainty that we have already given the sector, and it supports the five-step plan we published last summer to deliver a decade of renewal for social and affordable housing.

[Imran Hussain (Bradford East) (Lab)]

The Minister starts strongly by highlighting the real reason behind the Bill. He is absolutely right: for many families, social housing is the only option to achieve dignity, security and stability. In my community, 25,000 adults are waiting for social housing, so I welcome the Government’s ambition for £39 billion to be spent on social and affordable housing over the next 10 years. The Minister alluded to this in his earlier submissions, but will he make it clear that all resources and flexibility will be available to local councils to deliver on that pledge?

[Matthew Pennycook]

My hon. Friend is right: we absolutely need to give local councils flexibility. We have already helped councils to build their capacity. We have, as I will mention later, allowed them to keep 100% of right to buy receipts. We are considering everything we need to do to move the dial when it comes to house building, to build on the steps that we have already taken.

The Bill has three core objectives: first, to protect much-needed housing stock and thereby incentivise the building of more social rented homes; secondly, to create a fairer tenancy system with greater protections for tenants who are victims of domestic abuse; and thirdly, to reduce unnecessary bureaucracy and give providers greater regulatory certainty so that they can invest in new social and affordable homes with confidence. Let me provide further detail on each objective in turn, starting with the measures designed to better protect existing social housing stock and incentivise the building of more social homes.

At the heart of the Bill are comprehensive reforms to the right to buy scheme. In addressing them, I emphasise that we are not abolishing the right to buy—I know and respect the fact that some right hon. and hon. Members object to that decision on principle—but the Government remain firmly of the view that social housing tenants who have lived in and paid rent on their homes for many years should retain the opportunity to purchase them at a reasonable discount. However, we need to radically reform the right to buy in order to reduce the significant outflow of stock that has taken place since discounts were drastically increased by the coalition Government in 2012, to incentivise councils to build, and to attract broader investment in council housing.

As hon. Members will know, we have already acted to reduce maximum right to buy cash discounts, to increase the cost floor protection period, to ensure—as I just said to my hon. Friend the Member for Bradford East (Imran Hussain)—that councils keep 100% of right to buy receipts, and to allow council to combine those receipts with developer contributions and grant funding. The Bill delivers the broader set of reforms necessary to put in place a fair and sustainable right to buy scheme for the future, informed by the feedback we received in the public consultation that ran from November 2024 to January 2025.

Key measures in the Bill include increasing the right to buy eligibility requirement from three to 10 years, amending percentage discounts to better align with new maximum cash discounts so that long-standing tenants benefit from the largest reductions, and exempting newly built social homes from sale under right to buy for 30 years. The Bill also exempts homes from sale under right to buy in areas designated as rural, given that homes in those areas are extremely difficult and expensive to replace. In the other place, peers sought to persuade the Government to set criteria for rural designation in regulations, and we have committed to amending the Bill to enable that.

[Andrew George (St Ives) (LD)]

The Minister will know that clause 12 includes provision restricting housing associations from disposing of stock, including, for example, housing for which it is expensive to achieve an energy performance certificate rating of C. My area is haemorrhaging larger numbers of social homes because of that rather than because of right to buy. Will he ensure that rural communities, where there is a scarcity of social housing, are protected and supported in retaining those properties?

[Matthew Pennycook]

I am sure that we will have ongoing discussions about that and other issues. The hon. Gentleman may wish to hone his private Member’s Bill—the Homes and Planning Bill—so that it focuses on this issue among others. As I said at oral questions on Monday, I recognise the strength of feeling in the House on disposals. I want to ensure that every opportunity is taken to retain homes in the social housing sector.

The new disposal notification requirements in the Bill, which I will address later, will maximise opportunities for social housing providers to buy and retain social homes, but housing associations remain independent organisations, responsible for their own asset management decisions. Yes, we are looking at what more we can do to protect much-needed social housing stock, but there are limits to the extent to which we can go. Further to that point, we are also taking equally important steps to ensure that councils are in a better position to buy any disposals—by raising the gap on grant funding for acquisitions, for example.

Taken together, those measures will fundamentally alter the trajectory of social housing supply. Between April 2012 and March 2024, there were over 124,000 council right to buy sales, with fewer than 48,000 homes replaced in the same period. Under the previous, pre-reform baseline, we could have expected to see an approximate net loss of another 26,000 council homes between 2026 and 2036. Following the implementation of this Government’s right to buy reform package, including the measures in the Bill, we instead expect to realise a net gain of around 18,000 homes in the same 10-year period. To put it more simply, instead of vainly watching the loss of precious social homes massively outpace their building, we will, for the first time in decades, build considerably more than we are losing thanks to this Labour Government and this Bill.

[James Naish (Rushcliffe) (Lab)]

The Bill rightly prioritises the building of social rented homes. Back in 2003, however, Rushcliffe borough council transferred all its council housing stock away and has built none since, yet it has praised itself repeatedly for being debt free, despite being much poorer asset wise as a result of that decision. Does the Minister agree that, if the Bill is to succeed, we cannot treat stock transfer as virtuous and that we have to get to the point where housing revenue accounts are not treated and talked about as being traditional debt for local authorities?

[Matthew Pennycook]

There is lots I agree with in what my hon. Friend said. We want to see councils once again directly delivering homes at scale. We also want councils working in far closer partnership with housing associations to increase the number of homes that are built and managed by local authorities. The point my hon. Friend made about his local authority is on the record for people in his area to see.

In addition to introducing comprehensive reforms to the right to buy, the Bill will require private providers of social housing to notify the relevant local authority and other social housing providers in their area before they sell a social home, which is relevant to the point the hon. Member for St Ives (Andrew George) made. There can be good reasons why private registered providers sometimes choose to dispose of social rented homes, and we do not propose to prevent them from doing so, but when a social home is to be sold, councils and other social housing providers should have the opportunity to consider whether they are interested in purchasing it. Legislation to provide them with that opportunity will prevent homes from being lost to the private market when they do not need to be.

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

Some 27 years ago, my local authority, the London Borough of Bexley, sold all its council housing stock to Orbit and L&Q. L&Q now routinely sells those former council homes at auction. Will the Minister commit to looking further at how we can ensure homes remain social housing, because the council has no intention of buying those homes back?

[Matthew Pennycook]

It is disappointing to hear that my hon. Friend’s local authority is not interested in any way in trying to bring those homes back under local authority control. As I said, there are limits to what we can do. Housing associations remain independent organisations. I am sure that hon. Members will be aware of the risks concerned with the steps the Government might take on reclassification, but we are exploring what more can be done to protect much needed social housing stock. As I said, it is just as important that we ensure that those councils and other providers that do want to buy—there are plenty of them—are in a position to do so.

On the issue of disposals, having listened carefully to the debate in the other place on this matter, we have committed to introducing an amendment to extend the window of time that must pass between notification and the sale of a property to give councils and other providers more time to consider whether homes can be purchased and retained in the social housing sector, which we want to see.

[Andrew George]

Will the Minister also consider extending the option to consult community groups, community land trusts and housing co-ops? They could take on these properties, rather than their leaking out into the private sector. In areas like mine, if properties leak into the private sector, they will most likely become second homes.

[Matthew Pennycook]

Indeed. That is precisely why we are introducing the notification window: we want to give local authorities and other providers the maximum opportunity to bring those homes back under their control. It is just as important that they are able to do so in practice. There are other issues affecting local authorities. A number of my hon. Friends in oral questions at the start of the week spoke about pressures on housing revenue accounts. All those issues are bearing down on the ability of councils to buy homes. We are looking at reforms to this area, not least the cap on acquisitions.

[Luke Murphy (Basingstoke) (Lab)]

Will the Minister give way?

[Matthew Pennycook]

I will make a bit of progress, because there are a lot of Members who want to speak, but I will come back to my hon. Friend later.

I now turn to the Bill’s second core objective: increasing protections for tenants who are victims of domestic abuse. No one should be forced to remain in an unsafe situation because they fear becoming homeless, yet last year about 15,000 households in England had to find a new social home as a result of domestic abuse. Existing legislation provides scant protection for social housing tenants who are victims of domestic abuse and who wish to remain in their current home without their abuser. Landlords can evict perpetrators, but only in cases where the victim has already left. That means that all too often victims are forced to choose between staying in danger or losing their home. This is an utterly unacceptable state of affairs, and through the Bill, we will end it, as part of our Department’s ongoing efforts to deliver the Government’s unprecedented commitment to halve violence against women and girls in a decade.

[Danny Beales (Uxbridge and South Ruislip) (Lab)]

I thank the Minister for giving way; he has been very generous with his time. I strongly support the provisions in the Bill to support victims of violence, who far too often have to be evicted or leave while the perpetrator stays with the tenancy, as the Minister said. Rent arrears also prevent victims from gaining a tenancy or moving out of temporary accommodation into settled accommodation. Requirements that prevent those with rent arrears from getting a new tenancy do not take into account whether someone has been a victim of domestic violence. I know that the Department is looking at consulting and guidance on that. Could the Bill be a key mechanism for changing that across the country?

[Matthew Pennycook]

I know that there is interest in this issue in the Chamber. There is certainly interest in the other place about it. I assure my hon. Friend that we appreciate fully that survivors of domestic abuse with debt can face barriers when applying for social housing. We continue to believe that guidance is the best route to resolving this issue, but we have been clear in the other place, and I am happy to reiterate it in this Chamber, that if that guidance proves insufficient, we do have the option of making regulations to amend the relevant legislation.

[Jess Phillips (Birmingham Yardley) (Lab)]

It is very good to hear the Minister commit to checking whether guidance is enough. Many of us who have tried to rehouse victims of domestic abuse, even after great laws have been written into legislation in this place, will know that getting them the priority need status under the Domestic Abuse Act 2021 still takes a huge amount of advocacy. I therefore really welcome the commitment that, if guidance alone does not work, the Government will look at legislation. I offer to work with the Department to ensure that we assess whether the policy is working not from Whitehall but from the frontline.

[Matthew Pennycook]

My hon. Friend knows that I have the utmost respect for her and all that she has done to make women and girls safe. In response to the points made by my hon. Friends the Members for Uxbridge and South Ruislip (Danny Beales) and for Birmingham Yardley (Jess Phillips), the Government have committed in our national plan to end homelessness to address this issue. There is consensus on that point. I am more than happy to make it clear that, if the guidance is not effective and does not have the intended effects that we all want to see, we will not hesitate to pursue changes through regulations. My hon. Friend has my commitment on that.

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)]

Will the Minister give way?

--- Later in debate ---

[Matthew Pennycook]

I am not going to give way. Madam Deputy Speaker is glaring at me because I am taking too much time. I know that many Members want to speak. I will try to come back to colleagues as I progress through my remarks.

To ensure that victims of domestic abuse can access safe and secure housing, the Bill provides for stronger legal mechanisms to remove a perpetrator from a social housing tenancy and enable victims to stay in their home or move to alternative accommodation as a sole tenant. In response to constructive debate on the subject in the other place, we intend to bolster the discretionary possession ground so that the existence of a relevant protective order can provide the basis for proceedings, rather than evidence that the order has already been breached being required. The new powers will apply where the victim is personally connected to the perpetrator tenant and is a current or former occupant of the property. By aligning the approach with the Domestic Abuse Act 2021, the Bill will cover a broader range of relationships, including partners, former partners and family members.

The Bill’s third core objective is reducing unnecessary bureaucracy and providing regulatory clarity so that providers can invest in new social and affordable homes with confidence. The Housing and Planning Act 2016—incidentally, the Bill Committee of which I happened to serve on as a young Parliamentary Private Secretary to the then shadow Housing Secretary, now Chancellor of the Exchequer, the right hon. Member for Rawmarsh and Conisbrough (John Healey)—contains a series of social housing provisions that have never been brought into force. The Bill will repeal the following measures to clarify the statute book and provide the sector with certainty that they will never be implemented. First, this Government have no intention of implementing provisions that would have required councils to charge higher rents to higher-income social tenants, also known as mandatory pay to stay. The policy could have incentivised tenants to reduce work hours to avoid higher rent, so we are removing it from the statute book.

Secondly, the Bill will repeal provisions that would have required councils to grant fixed-term tenancies of between two years and 10 years generally to all new tenants. This Government will continue to encourage landlords to make the best and most effective use of their homes to meet housing need, but we have no intention of prohibiting lifetime secure tenancies, which provide much-needed security for many households and support social mobility, and so we are removing that policy from the statute book.

Thirdly, the Bill will repeal provisions that would have required councils to sell off higher-value vacant housing stock and make annual payments in respect of expected sales to the Treasury. This Government have no intention of implementing this policy and want to see these assets remain for councils to manage and use as they see fit, so we are removing it from the statute book.

As well as repealing provisions from the 2016 Act, the Bill reforms the outdated housing consents regime, which can be time consuming and resource intensive for councils and often leads to delays in delivering new social and affordable housing. The Bill will streamline the consents process to empower councils and remove bureaucratic impediments that restrict councils’ flexibility in managing their housing stock, while retaining checks and protections where appropriate.

Did my hon. Friend the Member for Basingstoke (Luke Murphy) want to intervene?

[Luke Murphy]

indicated dissent.

[Matthew Pennycook]

Or have I caught him unprepared? I was going to give him a chance there.

To conclude, after years of marginalisation, this Government have emphatically and unashamedly asserted the necessity and value of social rented homes. They are a crucial national asset to be proud of, to invest in, to protect and to maintain. This Bill will protect precious social homes for future generations and incentivise the building of many more of them. It will give social housing providers the confidence they need to invest in new social and affordable homes, and it will support social tenants who are victims and survivors of domestic abuse.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

There is part of the Bill that the Minister has not referred to: part 2 on a review of shared ownership. Shared ownership is a tenure that provides a great opportunity to get into home ownership for many people, yet far too many people find themselves indebted and in a difficult position because of the service charges imposed on them and the quality of shared ownership. I am particularly interested in the different models of shared ownership that come forward. I am interested to know what this review will cover and how its outcomes might be reflected in any future investment in genuinely affordable homes.

[Matthew Pennycook]

I thank my hon. Friend for her question and her passionate advocacy on behalf of her constituents and others around the country on housing issues generally. On shared ownership, I know the pressures that shared owners face; I see them in my own constituency postbag on a daily basis. We have already taken positive steps to improve the shared ownership model such as introducing new expectations for landlords who bid for shared ownership grant funding to improve fairness and transparency. We are supporting shared owners affected by specific challenges, such as building safety issues. Clause 13, which hon. Members might be aware was added to the Bill in the other place, requires a review of the shared ownership model to be carried out within 12 months of the Bill passing. We do not believe a review is necessary as we are already actively considering specific issues that have been raised in debates, including data and long-term affordability for customers, and we will of course consider what more we can do to act on those issues within our wider programme to improve shared ownership.

[Andrew Cooper (Mid Cheshire) (Lab)]

Will the Minister give way?

[Matthew Pennycook]

I will make some progress.

I am immensely grateful to my noble Friend, Baroness Taylor of Stevenage, for the customary skill with which she oversaw the passage of the Bill through the other place and for the extensive engagement she undertook with peers throughout the initial Lords stages. A number of important issues were raised during the debates in the other place and, as a result, my Department is undertaking rapid policy work to determine whether there is a case for strengthening the Bill further in a series of areas.

For example, in response to concerns raised by my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the noble Lord Best, we are giving serious consideration to what more might be done to provide greater security of tenure for social tenants who are fleeing violence, including serious youth violence. We are also considering what more can be done to bolster public control of social housing to ensure that it serves and supports those who need it most.

[Sarah Russell (Congleton) (Lab)]

Will the Minister give way?

[Matthew Pennycook]

I will not; I am just about to conclude—apologies to my hon. Friend.

I look forward to engaging with hon. Members on both sides of the Chamber in relation to these and other matters as we look to improve the Bill further, and I commend it to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.