Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, whether her Department has considered allowing local authorities to (a) retain and (b) reinvest all proceeds from Right to Buy sales into building new council homes.

Former council tenants who have purchased their home under the Right to Buy scheme but wish to resell or dispose of it within a 10-year period, must first offer the property for sale at the full market value to either the former landlord or to another social landlord in the area. This is known as the right of first refusal and helps to safeguard social housing and keep it within the public sector.

As announced at Autumn Budget, the government is allowing councils to keep 100% of the receipts generated by Right to Buy sales, which coupled with the increased flexibilities in how councils can use the receipts, will help to accelerate and increase the delivery of replacement homes. The majority of the receipts must be spent on replacement social housing within 5 years.

The government’s manifesto committed to better protecting newly built social housing from the Right to Buy since we recognise that the risk of a home being sold soon after completion can disincentivise councils from investing in new housing. To give councils greater confidence to scale-up delivery of social homes for those who need them most, the government increased the “cost floor” period during which Right to Buy discounts can be reduced to account for money spent building or maintaining the property, from 15 years to 30 years.

The government is aware, however, that the cost floor may not always be sufficient to protect new builds, because new homes can still be sold under the scheme, and it may not cover all forms of investment in existing housing stock. We therefore sought views in the recent consultation on reforming the Right to Buy scheme, which can be found on gov.uk here, on an exemption for new builds from the scheme. The consultation has closed and the government is carefully considering all responses received and will announce next steps in due course.