A property industry group wants to restrict the private letting of properties bought in the future via the Right To Buy policy.
The Right to Buy gives council tenants the right to purchase the home they are currently renting from a local authority at a discount. Tenants are eligible to purchase after they have been a social tenant for three years, and the discounts go up for each year they are a tenant, to a maximum of 70% of the property value, capped at £96,000 (or £127,900 in London).
Sales were highest during the 1980s, with over 1.4m homes sold between 1980 and 2000. In 1999 discounts were significantly reduced, and sale rates fell sharply after the 2008 financial crash. In 2012, a beefed up version of Right to Buy increased sales to where they are today, at up to 12,000 per year.
Now an industry group - the Housing Forum - wants restrictions on how properties bought in the future via RTB can be let out.
It wants covenants should be placed on sales to either prevent the property from being let out, or alternatively to require them to be offered to the council to let, if they are not being used for owner-occupation.
The Housing Forum also wants a series of other reforms, including discounts on a home to be no more than 20% of its value; the length of residency required to purchase to rise to at least five years; and exemption criteria to be modernised to include larger homes and those designed for specialist needs.
The Housing Forum says there were three principal issues with Right to Buy.
These were that the selling of council homes has increased in the past 10 years, with 113,000 homes sold in this time, and some councils losing as much as 10% of their stock. At the same time, the number of households in temporary accommodation has doubled to over 100,000; unfairness, with some tenants buying with gifts or loans from other family members only to sublet them on the private market; and RTB deterring councils from building new social housing, for fear it would be sold.
Housing Forum director of policy and public affairs Anna Clarke says: “Our members across the housing sector work hard to increase the supply of affordable housing and know how badly this is needed. Forcing councils to sell off their housing at prices much lower than it costs to rebuild it leaves them fighting an uphill battle.
“Many councils are keen to build new council homes – but they’re put off doing so by the risk of having to sell their new homes off as fast as they can build them.
“We hope that the proposals set out here will provide some ideas for ways that the Right to Buy could be reformed to give councils the confidence to invest in new homes, as well as addressing some of the wider concerns around fairness.”:
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.jpg)
Join the conversation
Jump to latest comment and add your reply
Good to see another charity backing the PRS - not. 😠
The thing I don't get is why Council houses are so cheap to rent. Back when I was a Council tenant in the 1980s the rent wasn't significantly cheaper than private sector.
I was working with a bloke who is the same age as me last night. We both left school in the early 1980s. He has worked in the same job for 29 years and lived in the same Council house for 32 years. He earns somewhere around £28K plus overtime. His wife also works. Their rent is £124 a week for a 3 bedroom house. How can the Council maintain the house and pay their admin staff to manage their estate on such ludicrously low rent? LHA for a 3 bed is currently £218 a week? What justification is there for Council rents to be lower than LHA? Surely someone in a long term, stable job, earning somewhat more than minimum wage has broad enough shoulders to pay a realistic rent for a permanent home. Why are other tax payers subsidising people who really don't need subsidising?
When the Right to Buy was first invented it was a means of offloading some maintenance nightmares. They weren't nice, well maintained houses. Very often the cost of remedial works were more than the discount. Things moved on, standards improved, discounts were reduced for a while and then somewhat bizarrely increased again. The concept of RTB is basically good but the price needs to be sensible. It used to be the case that a house couldn't be sold for less than it had cost the Council. That meant newly constructed houses didn't get much discount regardless of how long the occupants had been Council tenants.
It does seem that Council tenants are double dipping. Half price rent and a huge discount. Why does the discount get bigger the longer they have paid cheap rent?
It doesn't make any kind of logical sense. Surely the real point of Social housing should be the security of tenure, not huge subsidies and discounts at other people's expense.
Putting covenants and occupancy restrictions on RTB properties would be hugely problematic. Mortgage lenders already hate Section 106 restrictions.
Agree with you Jo, the exact reason to offload maintenance nightmares on to the public, plus the fact half the maintenance team was always off sick on full pay.
I remember on the Larches Estate in the late seventies early eighties all the people who bought the houses started doing repairs, hedges cut, lawns immaculate and a general pride in their homes.
The scruffy ones stayed with the council. Now the trend is to try and push them into PRS, we do not want their nightmares..!
Why do people who benefit from cheap rent then get the opportunity to buy the house at a reduced price - often funded by other family members, who subsequently sell & make a killing? IMO if you can afford to buy a house you shouldn't be in Council Housing anyway!
If you are a higher rate tax payer you should be evicted from council housing. Council houses should be for the low paid only, it should be for the people in most need, not the well off.
John - in some respects you're right but should people face eviction simply because they've worked hard and got a pay rise? Wouldn't that give even more people a reason to work part time?
Wouldn't a better solution be to charge closer to market rent? Low income tenants would be able to claim LHA so it would have no impact on them. Higher income tenants would simply be paying a fairer rent that would enable Councils to maintain and increase their housing stock. If they don't like the idea of paying a bit more because it's a Council house they have the option to either buy somewhere or move into the private sector.
I have never agreed with RTB. It’s a crazy policy which has gotten us where we are now with zero social housing ( along with mass migration). 🫣🫣
Councils don’t pay income tax, Council don’t need HMO Licences, how many more things…if we are to compare.
And myriad news stories evidence they often don't maintain their housing stock either (as does my own personal experience). Massive saving there.
Sell sell sell! 👍
Please login to comment